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--First Quarter Loss Per Share of $0.09, In Line with Guidance
Cache, Inc., (CACH), a specialty chain of women’s apparel
stores, reported results for the thirteen week period ("first quarter")
ended March 31, 2012.
For the 13-week period ended March 31, 2012:
--
Net sales increased 7.5% to $56.0 million from $52.1 million in the
first quarter of fiscal 2011. Comparable store sales increased 9.4%,
which compares to an increase of 7.7% in the first quarter of fiscal
2011;
--
Gross profit increased 1.3% to $22.2 million, or 39.6% of net sales
from $21.9 million, or 42.1% of net sales, in the first quarter of
fiscal 2011;
--
Operating loss totaled $2.0 million, as compared to $1.3 million in
the first quarter of fiscal 2011 primarily driven by higher marketing
and e-commerce costs; and
--
Net loss totaled $1.2 million, or $0.09 per share, as compared to a
net loss of $772,000 or $0.06 per share, in the first quarter of
fiscal 2011.
Thomas Reinckens, Chairman and Chief Executive Officer, commented: "Our
positive momentum from 2011 continued into the first quarter as
reflected by our 9.4% increase in first quarter comparable store sales.
However, increased expenses related to our brand building and ecommerce
growth initiatives contributed to the increase in our operating loss as
compared to the prior year."
"We have seen a slow start to the second quarter with April comparable
store sales increasing 3%, which has caused us to moderate our first
half outlook," Mr. Reinckens continued. "That said we remain optimistic
about our business given the very strong response to our dress
assortments, which increase in percentage of our overall business in the
quarter. We were also delighted to announce the hire of Jane Inman as
Senior Vice President of Stores, who joined us in April and has already
made considerable contributions to our Company. We remain confident in
our strategies, which we expect to position us for profitability in the
first half of fiscal 2012 and result in a sustained platform for growth
longer term."
First Quarter Operating Results
Gross profit for the first quarter of fiscal 2012 was $22.2 million, or
39.6% of net sales, compared to $21.9 million, or 42.1% of net sales, in
the first quarter of fiscal 2011. The 243 basis point decrease in gross
profit margin was primarily driven by an increase in markdowns as a
percentage of sales, due to an earlier transition to spring merchandise,
which was partially offset by an increase in our initial mark-up as
compared to the prior year.
In total, operating expenses were $24.2 million, or 43.3% of net sales,
as compared to $23.2 million, or 44.5% of net sales, in the first
quarter of fiscal 2011. The increase in operating expenses was primarily
due to increases in advertising, e-commerce related expenses and payroll
expenses, which were partially offset by a decrease in depreciation
expense.
At March 31, 2012, cash and marketable securities totaled $20.7 million,
as compared to $21.2 million in cash and marketable securities at April
2, 2011. Total inventory at cost increased 19.0%. The growth in
inventory reflects an increase to accommodate sales growth and
merchandise to support the establishment of the Company’s new e-commerce
fulfillment center, as well as the timing of inventory receipts given
the earlier product development schedule.
A table summarizing financial results follows:
Thirteen Weeks Ended
---------------------------------
March 31, April 2,
2012 2011
---------------- ----------------
($ thousands, except for per share data)
Net sales $ 55,995 $ 52,099
Operating loss $ (2,023 ) $ (1,260 )
Net loss $ (1,208 ) $ (772 )
Diluted loss per share $ (0.09 ) $ (0.06 )
Basic and diluted weighted average
shares outstanding 12,873,000 12,817,000
Number of stores open at end of period 268 280
Store Opening Plans
During the first quarter, the Company opened one new store and closed 12
locations, ending the quarter with 268 stores in operation. To date
during fiscal 2012, the Company closed 14 stores and expects to close
approximately three more stores, while opening one new store, ending the
year with approximately 264 stores and approximately 530,000 square feet
in operation. The closed stores had negative profitability in fiscal
2011 and their closure is expected to have a positive impact on fiscal
2012 earnings.
Second Quarter 2012 Outlook
For the second quarter of fiscal 2012, the Company expects comparable
store sales to increase in the low- to mid-single digit range following
a 6.0% increase in the second quarter of fiscal 2011. The Company
currently expects second quarter fiscal 2012 net income of $0.19 to
$0.22 per diluted share. This compares to net income of $0.22 per
diluted share in the second quarter of fiscal 2011.
Conference Call Information
The Company announced that it will conduct a conference call to discuss
its first quarter fiscal 2012 results today, May 11, 2012 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 May 11, 2012
and remain active until 11:59 p.m. ET on May 18, 2012. The replay can be
accessed by dialing (877) 870-5176 and entering replay pin number 393890.
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 266 stores, primarily situated in central locations
in high traffic, upscale malls in 43 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, industry trends, merchandise and fashion trends,
competition, seasonality, changes in general economic conditions and
consumer spending patterns, the ability to successfully open new stores,
reliance on foreign manufacturers and dependence on management and
vendors and distributors, as 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
March 31, December 31, April 2,
ASSETS 2012 2011 2011
-------------------- ---------------------- ------------------
Current assets:
Cash and equivalents $ 10,710,000 $ 22,509,000 $ 1,896,000
Marketable securities 7,014,000 4,008,000 16,850,000
Certificate of deposits - restricted 3,000,000 3,000,000 2,500,000
Receivables, net 3,346,000 3,403,000 3,345,000
Income tax receivable 131,000 162,000 50,000
Inventories, net 27,326,000 22,075,000 22,961,000
Prepaid expenses and other current assets 2,347,000 1,572,000 5,328,000
----------- ----------- -----------
Total current assets 53,874,000 56,729,000 52,930,000
Equipment and leasehold improvements, net 19,367,000 18,937,000 23,260,000
Intangible assets, net 102,000 102,000 102,000
Other assets 9,726,000 8,877,000 9,833,000
----------- ----------- -----------
Total assets $ 83,069,000 $ 84,645,000 $ 86,125,000
=== =========== ==== =========== == ===========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 10,502,000 $ 9,565,000 $ 12,269,000
Note payable - - 1,282,000
Accrued compensation 1,372,000 2,579,000 1,328,000
Accrued liabilities 10,188,000 10,217,000 10,020,000
----------- ----------- -----------
Total current liabilities 22,062,000 22,361,000 24,899,000
Note payable - - 160,000
Other liabilities 11,267,000 11,487,000 13,361,000
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common stock 166,000 165,000 165,000
Additional paid-in capital 48,569,000 48,419,000 48,180,000
Retained earnings 40,800,000 42,008,000 39,155,000
Treasury stock, at cost (39,795,000 ) (39,795,000 ) (39,795,000 )
----------- --- ----------- ---- ----------- --
Total stockholders’ equity 49,740,000 50,797,000 47,705,000
----------- ----------- -----------
Total liabilities and stockholders’ equity $ 83,069,000 $ 84,645,000 $ 86,125,000
=== =========== ==== =========== == ===========
CACHE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
13 Weeks Ended 13 Weeks Ended
March 31, April 2,
2012 2011
--------------------- ---------------------
Net sales $ 55,995,000 $ 52,099,000
Cost of sales, including buying and occupancy 33,798,000 30,178,000
---------- ----------
Gross profit 22,197,000 21,921,000
---------- ----------
Expenses
Store operating expenses 19,342,000 18,137,000
General and administrative expenses 4,878,000 5,044,000
---------- ----------
Total expenses 24,220,000 23,181,000
---------- ----------
Operating loss (2,023,000 ) (1,260,000 )
---------- ---- ---------- ----
Other income (expense):
Interest expense - (18,000 )
Interest income 18,000 21,000
---------- ----------
Loss before income taxes (2,005,000 ) (1,257,000 )
Income tax benefit (797,000 ) (485,000 )
---------- ---- ---------- ----
Net loss $ (1,208,000 ) $ (772,000 )
==== ========== ==== ==== ========== ====
Basic loss per share $ (0.09 ) $ (0.06 )
==== ========== ==== ==== ========== ====
Diluted loss per share $ (0.09 ) $ (0.06 )
==== ========== ==== ==== ========== ====
Basic weighted average shares outstanding 12,873,000 12,817,000
========== ==========
Diluted weighted average shares outstanding 12,873,000 12,817,000
========== ==========
SOURCE: Cache, Inc.
Cache Inc.
Maggie Feeney, 212-575-3206
Executive Vice President and
Chief Financial Officer
or
Investor Relations:
ICR, Inc.
Allison Malkin/Rachel Schacter
203-682-8225 / 646-277-1243
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