Cache Swings into Larger Q2 Loss, Sales Slow

cacheNew York—Cache Inc. reported Monday evening that its second quarter swung into a wider loss as sales slowed but company executives still looked at it optimistically.

Cache posted a net loss of $ 7.9 million, or 33 cents a share, compared with $1.6 million, 9 cents, a share, in the prior year quarter. That missed analysts’ consensus for $26 cents a share.Equally dissatisfying, Cache’s net revenue was down to $54.1 million compared to $60.1 million in the same quarter last year. The sales results just missed analysts’ forecast too. Comparable store sales were down 8.8%

‘More Powerful Assortments’

Gross profit for the Q2 was $17.1 million or 31.6% of net sales. However, in 2013′s second quarter the gross profit was $22.4 million or 37.3% of net sales. Similarly, the gross profit for the six-month period dropped from $39.4 million in 2013 to $30.0 million in 2014.

“In the second quarter we made significant progress on our strategic initiatives, which have contributed positively to our business at the end of the second quarter, and even more significantly in the beginning of the third quarter,” said Chairman/CEO Jay Margolis. “Our comparable store sales are positive in the first 6 weeks of the third quarter following a 6% increase in the third quarter last year, driven by a positive response to our recent collections, the launch of our new loyalty program, Treasured, the merging of our planning and allocation teams and the consolidation of our store and online fulfillment operations to create one multi-channel distribution center. As a result of these initiatives, we are delivering more powerful assortments, in the right quantities, in the right locations and at the right time, positioning us to achieve our objective to be a top shopping destination for all the events in a woman’s life. While disappointed in our second quarter financial performance, I am encouraged about our business at the start of the second half of the year and expect our actions to result in increased sales productivity.”

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com