Cache Reports Second Quarter Fiscal 2013 Results

Before you go, we thought you'd like these...
Before you go close icon

Cache Reports Second Quarter Fiscal 2013 Results

NEW YORK--(BUSINESS WIRE)-- Cache, Inc., (NAS: CACH) , a specialty chain of women's apparel stores, reported results for the thirteen ("second quarter") and twenty-six week periods ("first six months") ended June 29, 2013.

For the 13-week period ended June 29, 2013:

  • Net sales decreased 2.5% to $60.1 million from $61.6 million in the second quarter of fiscal 2012. Comparable store sales increased 0.5%, which compares to an increase of 4.7% in the second quarter of fiscal 2012;
  • Gross profit decreased to $20.9 million, or 34.7% of net sales, from $26.4 million, or 42.8% of net sales, in the second quarter of fiscal 2012;
  • Operating loss totaled $3.1 million, which included costs of $956,000 associated with employee separation charges incurred, in connection with severance for corporate employees. This compares to operating income of $1.7 million in the second quarter of fiscal 2012, which included $152,000 of employee separation charges;
  • Net loss totaled $3.2 million, or ($0.17) per diluted share, as compared to net income of $1.0 million or $0.08 per diluted share in the second quarter of fiscal 2012; and
  • Adjusted net loss totaled $2.2 million, or ($0.12) per share, as compared to adjusted net income of $1.1 million or $0.09 per diluted share in the second quarter of fiscal 2012. (See reconciliation of adjusted net income/(loss) to net income/(loss).)

Jay Margolis, Chairman and Chief Executive Officer, commented: "We are pleased with the progress made toward our strategic objectives during the second quarter. 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. While our turnaround efforts negatively impacted profitability in the quarter, this activity allowed us to begin the third quarter in an improved position. Following quarter end, we announced a new credit facility which enhances our financial flexibility to pursue our initiatives. I am pleased to welcome our new Chief Financial Officer, Tony DiPippa to Cache and believe he will make a significant contribution to the company."

"In the first six weeks of the third quarter, our comparable store sales are positive, driven by increased traffic and regular price selling, reflecting the success of our new deliveries, especially in dresses, accessories and targeted promotions," Mr. Margolis, continued. "I expect our sales performance to continue to strengthen, as a greater percentage of our assortments are impacted by our moves, and we see the initial benefits from our process and marketing changes. I remain confident in our strategies and our ability to achieve improved operating performance in the near term and put us on a path to achieve sustained profitable long term growth in the future."

For the 26-week period ended June 29, 2013:

  • Net sales decreased 3.4% to $113.6 million from $117.6 million in the first six months of fiscal 2012. Comparable store sales decreased 0.4%, as compared to a increase of 6.9% in the first six months of fiscal 2012;
  • Gross profit decreased to $37.3 million, or 32.8% of net sales from $48.6 million, or 41.3% of net sales, in the first six months of fiscal 2012;
  • Operating loss totaled $11.4 million, which included costs of $2.5 million associated with employee separation charges incurred, in connection with the separation agreement with the former CEO, as well as severance for other corporate employees. This compares to operating loss of $346,000 in the first six months of fiscal 2012, which included $277,000 of employee separation costs;
  • Net loss was $21.7 million or ($1.37) per diluted share, as compared to a net loss of $177,000, or ($0.01) per diluted share in the first six months of fiscal 2012; and
  • Adjusted net loss was $9.0 million, or ($0.57) per share, as compared to adjusted net loss of $16,000 or ($0.00) per diluted share in the first six months of fiscal 2012. (See reconciliation of adjusted net income/(loss) to net income/(loss).)

Gross profit for the second quarter of fiscal 2013 was $20.9 million, or 34.7% of net sales, compared to $26.4 million, or 42.8% of net sales, in the second quarter of fiscal 2012. For the first six months of fiscal 2013, gross profit was $37.3 million, or 32.8% of net sales, compared to $48.6 million, or 41.3% of net sales in the first six months of fiscal 2012. The decrease in gross margin for the second quarter and first six months of fiscal 2013 was primarily driven by an increase in markdowns on prior season assortments, as compared to the prior year.

In total, operating expenses for the second quarter of fiscal 2013 were $24.0 million, or 40.0% of net sales, as compared to $24.7 million, or 40.1% of net sales, in the second quarter of fiscal 2012. For the first six months of fiscal 2013, operating expenses were $48.7 million, or 42.9% of net sales, compared to $48.9 million, or 41.6% of net sales, in the first six months of fiscal 2012. The decrease in operating expenses for the second quarter of fiscal 2013 was driven by decreases in marketing, as well as payroll and payroll-related expenses. The decrease in operating expense for the first six months of fiscal 2013 was driven by decreases in marketing, payroll and payroll-related expenses, and depreciation expense.

At June 29, 2013, cash and marketable securities totaled $15.1 million, as compared to $24.4 million in cash and marketable securities at June 30, 2012. Total inventory at cost decreased 13.2% at quarter end from the prior year period.

A table summarizing financial results follows:

      

Twenty-Six Weeks Ended

Thirteen Weeks Ended

June 29,  June 30,June 29,  June 30,

2013

2012

2013

2012

 

 

($ thousands, except for per share data, share numbers and store count)

 
Net sales$113,632$117,628$60,122$61,633
Operating income (loss)(11,433)(346)(3,147)1,677
Net income (loss)$(21,663)$(177)$(3,158)$1,031
 
Diluted earnings (loss) per share$(1.37)$(0.01)$(0.17)$0.08
Adjusted earnings (loss) per share$(0.57)$-$(0.12)$0.09
 

Basic weighted average shares outstanding

15,769,00012,877,00018,378,00012,880,000

Diluted weighted average shares outstanding

15,769,00012,877,00018,378,00012,928,000
 

Number of stores open at end of period

250

264250264
 

Store Count Information

During the second quarter, the Company opened two stores and closed one existing location, ending the period with 250 stores in operation. During the balance of fiscal 2013, the Company expects to open no new stores and close one additional store, ending the year with 249 stores and approximately 500,000 square feet in operation.

Conference Call Information

The Company announced that it will conduct a conference call to discuss its second quarter fiscal 2013 results today, August 13, 2013, at 9:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 705-6003 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.cache.com. A replay of this call will be available at 12:00 p.m. ET on August 13, 2013 and remain active until 11:59 p.m. ET on August 20, 2013. The replay can be accessed by dialing (877) 870-5176 and entering confirmation code 418816.

About Cache, Inc.

Cache is a nationwide, mall-based specialty retailer of sophisticated sportswear and social occasion dresses targeting style-conscious women who have a youthful attitude and are self-confident. The Company currently operates 250 stores, primarily situated in central locations in high traffic, upscale malls in 41 states, the Virgin Islands and Puerto Rico.

Certain matters discussed within this press release may constitute forward-looking statements within the meaning of the federal securities laws. Although Cache, Inc. believes the statements are based on reasonable assumptions, there can be no assurance that these expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, our ability to successfully implement our business strategy and to integrate new members of management, industry trends, merchandise and fashion trends, competition, seasonality, changes in general economic conditions and consumer spending patterns, factors specific to our Company and merchandise, such as demand for our merchandise and markdowns, well as other risks outlined from time to time in the filings of Cache, Inc. with the Securities and Exchange Commission.

 
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
      
 
June 29,December 29,June 30,
ASSETS 2013  2012  2012 
 
Current assets:
Cash and equivalents$12,853,000$12,360,000$14,334,000
Marketable securities-3,013,0007,019,000
Certificate of deposits - restricted2,250,0003,000,0003,000,000
Receivables, net2,299,0002,200,0002,359,000
Income tax receivable59,000184,000267,000
Inventories, net19,321,00021,246,00022,267,000
Prepaid expenses and other current assets 1,679,000  2,224,000  2,516,000 
Total current assets38,461,00044,227,00051,762,000
 
 
Equipment and leasehold improvements, net19,933,00020,177,00020,166,000
Intangible assets, net102,000102,000102,000
Other assets 636,000  10,119,000  9,040,000 
 
Total assets$59,132,000 $74,625,000 $81,070,000 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable$6,671,000$12,397,000$7,957,000
Accrued compensation3,802,0002,615,0002,560,000
Accrued liabilities 10,068,000  11,795,000  9,338,000 
Total current liabilities20,541,00026,807,00019,855,000
 
 
Other liabilities9,508,0008,777,00010,387,000
 
 
Commitments and contingencies
 
 
STOCKHOLDERS' EQUITY
 
 
Common stock253,000171,000171,000
Additional paid-in capital60,358,00048,735,00048,621,000
Retained earnings8,267,00029,930,00041,831,000
Treasury stock, at cost (39,795,000) (39,795,000) (39,795,000)
Total stockholders' equity 29,083,000  39,041,000  50,828,000 
 
Total liabilities and stockholders' equity$59,132,000 $74,625,000 $81,070,000 
 
    
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
26 Weeks Ended26 Weeks Ended
June 29,June 30,
2013

2012

 
Net sales

$

113,632,000$117,628,000
 
Cost of sales, including buying and occupancy 76,361,000  69,048,000 
 
Gross profit 37,271,000  48,580,000 
 
Expenses
Store operating expenses36,835,00039,459,000
General and administrative expenses9,415,0009,190,000
Employee separation charge 2,454,000  277,000 
Total expenses 48,704,000  48,926,000 
 
Operating loss (11,433,000) (346,000)
 
 
Other income (expense):
Interest income 17,000  42,000 
Total other income, net 17,000  42,000 
 
Loss before income taxes(11,416,000)(304,000)
 
Income tax provision (benefit) 10,247,000  (127,000)
 
 
Net loss$(21,663,000)

$

(177,000)
 
 
 
Basic loss per share$(1.37)$(0.01)
 
Diluted loss per share$(1.37)$(0.01)
 
 
 
Basic weighted average shares outstan
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going Man Suspects His Wife Is Cheating On Him - Then His Daughter Reveals What's Really Going
Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts Don't Get Too Close To a Newborn Giraffe Unless You Want to Get Kicked in the Nuts
Rescuer Sees Bumps All Over This Dog's Skin - Then X-Rays Reveal The Tragic Story Rescuer Sees Bumps All Over This Dog's Skin - Then X-Rays Reveal The Tragic Story
More to Explore
Sat, Apr 29
Set Your Location
City, State, or Zip