Women’s apparel retailer Coldwater Creek Inc. swung to an unexpected first-quarter profit, but said Wednesday that second-quarter results would be below analysts’ estimates.
This story first appeared in the June 3, 2010 issue of WWD. Subscribe Today.
The Sandpoint, Idaho-based retailer also said Georgia Shonk-Simmons, president and chief merchandising officer, will retire on May 1, 2011, and will be succeeded by Jerome Jessup, executive vice president of creative services.
Realigned price points and an improved sales strategy helped Coldwater post net income of $2.3 million, or 3 cents a diluted share, during the three months ended May 1, compared with a net loss of $7.6 million, or 8 cents, in the year-ago quarter. Revenue for the period expanded 6.4 percent to $243.1 million from $228.4 million in the 2009 period. Analysts polled by Yahoo Finance were looking for a loss of 4 cents a share on sales of $246.2 million.
The company said same-store sales for the period increased 1 percent and that gross margin improved to 37.4 percent of sales versus 31.1 percent a year earlier.
Despite the progress, the firm said it currently has too much inventory, which will need to be cleared out during the current second quarter.
The summer collection “lacked” colors and a “point of view,” president and chief executive officer Dennis Pence said on the company call.
Shonk-Simmons added the retailer is working to “refine” the collection by adding more “novelty and fashion relevance.” By the fall, Coldwater should have a “new look and feel,” as well a cleaner, well-edited assortment, she said.
For the second quarter, Coldwater forecast a loss no greater than the 5 cents a share lost in the comparable 2009 period. The company anticipates full-year earnings per share of between 8 cents and 12 cents. Analysts expect the company to break even in the second quarter and to earn 6 cents for the year.