Sandpoint, ID—Coldwater Creek Inc. reported Wednesday afternoon that its third quarter loss widened as the women’s specialty retailer’s total sales and comp sales dropped in the double digits.
For the quarter ended Nov. 2, Coldwater Creek posted a loss of $23.8 million, or 78 a share, compared with a loss of $20.5 million, or 67 a share, a year ago. Excluding severance charges, asset impairments and a derivative liability gain, adjusted loss widened to 79 cents a share from 45 cents. It was the company’s 13th consecutive quarters of losses although it still beat analysts’ estimate of 89 cents a share loss.
Net revenue dropped 18% to $154.5 million, missing the $160 million expected by analysts. Comp store sales fell 17%. And gross margin narrowed to 31.2% from 44.9% last year.
Coldwater Creek had warned earlier about its third quarter earnings and initiated a cost-cutting plan that includes cutting its workforce by about 20% and expected to generate some $20 million to $25 million in savings next year. There also is investigation into strategic alternatives including a possible sale.
According to Jill Dean, president/ceo, after a “disappointing performance” of its fall merchandise, the retailer adjusted its holiday assortment, which has performed well improving full-price sales in mid-October.
“While we are encouraged by the favorable customer response to recent deliveries, the holiday selling season is still underway and the environment remains highly competitive,” Dean added. “Moving ahead, we believe the essential steps to accelerate our turnaround and to deliver stability to our top-line involve successful execution of our strategic merchandising and marketing initiatives, aggressive cost cutting measures and disciplined inventory management.”