New York—Caché Inc. reported today that it swung into a wider third quarter loss as increased operating expenses and an income tax benefit last year cut into its profit.
For the quarter ended Sept. 28, Caché posted a net loss of $8 million, 38 cents a share, compared with a net loss of $6.4 million, or 49 cents a share, in the prior year period.
Excluding a tax allowance and costs related to employee reductions, Caché’s adjusted loss was 35 cents a share. Analysts’ average estimate expected a loss of 23 cents a share.
Net sales increased 3.1% to $47.22 million. Comparable store sales were up 6% compared to a decrease of 2.9% in the year-ago quarter.
Gross margin improved 150 basis points to 33.5% due to lower design, production and sourcing costs as well as lower markdowns and higher sales than a year ago.
Total operating expenses rose 4% to $23.77 million.
“During the quarter, we saw a favorable consumer response to our initial efforts to differentiate Caché from peers with unique event dresses, tops, sportswear and accessories,” said Jay Margolis, chairman/ceo. “This positive performance was partially offset by our actions to clear product that was not consistent with our go-forward strategy. We also continued to significantly reduce promotional activity in our e-commerce channel to enhance our profitability and importantly create brand integrity as we present a clear pricing message to our customers.”
The retailer ended the quarter with 250 stores compared to 262 stores last year.