New York—Costs of its turnaround efforts cut into Cache Inc.’s latest earnings, pushing the specialty retailer into a second quarter loss.
For the quarter ended June 29, Cache posted Tuesday a loss of $3.16 million, or 17 cents a share, compared with a profit of $1 million, or 8 cents a share, a year ago. Included in the figures were incurred costs of $956,000 associated with employee separation charges.
Excluding those costs, the adjusted earnings resulted in a loss of 12 cents a share. That was in line with analysts’ average estimate.
‘Improved Position’ for Q3
Net revenue declined 2.5% to $60.1 million. Comparable store sales edged down 0.5% percent compared with 4.7% growth in the same quarter 2012.
Gross margin narrowed to 34.7%, down from 42.8% a year ago driven by an increase in markdowns on prior season assortments.
“During the quarter, we focused on clearing assortments that were not consistent with our go-forward merchandising plan and significantly reducing promotional activity on the web while continuing to make strategic hires to allow us to drive our business forward,” said Jay Margolis, chairman/ceo. “While our turnaround efforts negatively impacted profitability in the quarter, this activity allowed us to begin the third quarter in an improved position.”
In addition to recently announcing a new, five year, $25 million credit facility through Wells Fargo Capital Finance, Cache also named Tony DiPippa as chief financial officer.