New York—Caché Inc. today reported a narrowed first quarter loss and sales decline described as “a disappointing start with the year.”
For the quarter ended March 29, the women’s specialty retailer posted a net loss of $10.8 million or 51 cents a share, including a 1 cent a share charge in employee separation charges. That was compared with a net loss of $17.8 million, or $1.33 a share, a year ago which also included a $10.1 million charge, as well as a $1.5 million charge in employee separation charges. Analysts’ average estimate, which excludes special items, expected a loss per share of 42 cents.
Expanded Dress Offerings
Net sales decreased to $47.4 million from $53.5 million, just missing analysts’ estimate for $49.58 in sales. Comparable store sales dropped 8.9% reflecting the “difficult selling season with the decrease in mall traffic, adverse weather conditions and the shift of Easter to the second quarter.”
Gross profit was $13 million, compared to $17.0 million, prior year. The company said the decrease in gross profit margin was primarily due to the leverage impact of occupancy costs on reduced sales, as compared to the prior year.
“We had a disappointing start to the year with strength across our dress assortments more than offset by too narrow of an assortment in key casual bottoms, and the decision not to move forward with certain casual and accessories offerings that were inconsistent with our brand positioning,” said CEO Jay Margolis.
He added that while not yet evident in the bottom line, Caché’s turnaround strategy and new merchandising direction were progressing.
“To this end, we were pleased with the response to our dress assortments in long, short, day and evening categories,” Margolis said. “At quarter end, dresses represented 55% of our total sales compared to 44% a year ago. On the process side, we reduced lead times to allow us to be more nimble and react faster to fashion trends.”