Shares of Cache Inc. shot up more than 15 percent in morning trading Thursday after the women’s specialty retailer posted better-than-expected second-quarter profit and sales results.
Buoyed by fewer promotions and improved merchandise, Cache’s net income for the period ended July 3 grew to $60.3 million, or 22 cents a diluted share. This compared with income of $56.6 million, or 7 cents a share, in the year-ago quarter.
Net sales increased 6.5 percent to $60.3 million, from $56.6 million, a year earlier.
Analysts anticipated earnings of 18 cents a share on sales of $59.4 million, Yahoo said.
Quarterly same-store sales rose 6 percent, and gross margin improved to 45.7 percent of sales versus year-ago margin of 44.1 percent.
On a conference call, chairman, president and chief executive officer Thomas Reinckens credited the company’s transition to a “traditional” eight- to nine-month planning calendar for the creation of a “differentiated cohesive collection” that utilizes “higher-quality fabrication.”
“Our fall offerings are very distinctive and modest, to capitalize on current fashion, which we believe will allow us to differentiate up from more peers,” he said. “We are now and currently focused on maintaining our positive momentum and refining our strategies to drive greater process going forward.”
For the first half, Cache swung to a profit of $2 million, or 16 cents a diluted share, compared with a year-ago net loss of $3.2 million, or 25 cents a share. Net sales expanded 6.9 percent to $112.4 million, from $105.1 million, a year earlier.
The retailer said it foresees a third-quarter net loss of between 6 cents and 8 cents a share, which is better than Wall Street’s expectation of a 12-cent loss.
As of 1 p.m., shares were up 79 cents, or 15.8 percent, to $5.80.