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Coldwater Creek Announces Results For Second Quarter Of Fiscal 2013

Stock quotes in this article: CWTR

SANDPOINT, Idaho, Sept. 10, 2013 (GLOBE NEWSWIRE) -- Coldwater Creek Inc. (Nasdaq:CWTR) today reported financial results for the three-month period ended August 3, 2013.

Second Quarter of Fiscal 2013 Operating Results

  • Consolidated net sales were $149.7 million, compared with $163.7 million in second quarter 2012. Net sales from the retail segment were $118.6 million, compared with $129.9 million in the same period last year. Comparable premium retail sales declined 7.3 percent for the quarter. Net sales from the direct segment were $31.1 million, compared with $33.8 million in the same period last year.  
  • Consolidated gross profit was $44.0 million, or 29.4 percent of net sales, compared with $48.5 million, or 29.6 percent of net sales, for second quarter 2012. The 20 basis point decline in gross profit margin was a result of improved occupancy leverage, offset by lower merchandise margins reflecting increased promotional activity.  
  • Selling, general and administrative expenses (SG&A) were $62.6 million, or 41.8 percent of net sales, compared with $65.7 million, or 40.1 percent of net sales, for second quarter 2012. The improvement in SG&A was driven by lower marketing and employee-related expenses.   
  • Net loss was $16.4 million, or $0.54 per share, and included other gain, net, of $5.6 million, or $0.18 per share, due to the change in the fair value of the derivative liability related to the Series A Preferred Stock issued in July 2012. This compares to second quarter 2012 net loss of $17.6 million, or $0.58 per share, which included other gain, net, of $1.3 million, or $0.04 per share, due to the change in the fair value of the derivative liability net of related issuance costs.   
  • On an adjusted basis, excluding the gain on the derivative liability, net loss was $22.1 million, or $0.72 per share, compared with $18.8 million or $0.62 per share for second quarter 2012. (Please see the table of GAAP to Non-GAAP Reconciliation of Selected Measures at the end of this press release.) As compared to previous guidance, second quarter 2013 net loss was negatively impacted by a change in the timing of revenue recognition related to the extension of the term under our current credit card agreement. The extension was put in place to better facilitate the upcoming transition of the Company's credit card program from Chase to Alliance Data Systems. The result was $1.7 million, or $0.06 per share, of revenue shifted out of the quarter and will instead be recognized over the next four quarters. 

"Sales were lower than planned in the second quarter, largely due to a deceleration in traffic during the month of July. Despite a challenging environment, we delivered bottom-line results that were in line with our guidance," said Jill Dean, President and Chief Executive Officer of Coldwater Creek. "Our return to more consistent comparable store sales has been slower than expected; however, we know that customer engagement and driving traffic are critical to our long-term success and two recent announcements represent progress against these objectives. First, we have further strengthened our management team with the addition of Deb Cavanagh as Chief Marketing Officer. In addition, our partnership with Alliance Data Systems provides us with an enhanced platform to drive sales and customer loyalty. We believe that these steps, combined with the extensive work we are continuing to do to align our merchandise assortment with our brand strategy, as well as our disciplined management of expenses and inventory, remain the right focus for our business." 

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