NEW YORK — Weak response to its early spring merchandise drove down Coldwater Creek’s fourth quarter income by 87.1 percent.
The Sandpoint, Idaho-based multi-channel women’s apparel retailer reported profits fell to $772,000, or 7 cents a diluted share for the three months ended March 3. That compares with profits of $6 million, or 56 cents in the year ago period.
Sales rose 23.4 percent to $139 million from $112.7 million.
“Lower-than-expected customer response to our full-price, early spring merchandise, on higher catalog circulation, clearly affected the strong top and bottom line results we delivered in the preceding three fiscal quarter,” Georgia Shonk-Simmons, chief executive, said in a statement. “We also ramped up clearance activity to ensure that year-end inventories would be in line with our revised plans, but that increased activity, combined with increased mailings, negatively impacted our gross margins and selling, general and administrative expenses.”
The company said it implemented company wide cost control measures and lowered its inventory to $66 million, originally slated to be $72 to $74 million, to combat the slower sales trends, a highly promotional selling environment and decreased consumer confidence.
Sales from its direct channels, including its traditional catalog business and its e-commerce division, increased 17.8 percent to $128.1 million. Sales from the Internet channel were up 182.9 percent to $41.3 million, and represented 29.7 percent of the company’s net sales.
Sales at its 10 retail stores increased 179.5 percent to $10.9 million.
For the year, income fell 3.6 percent to $13.2 million, or $1.22 a diluted share, compared with $13.7 million, or $1.29. Sales were up 26.8 percent to $458.4 million from $361.6 million.