Coldwater Creek losses increase

Sandpoint retailer Coldwater Creek reported Wednesday a net loss of $56.1 million, or 61 cents per share, compared with a net loss of $26 million, or 29 cents per share, in fiscal 2008.

Net sales were $1.04 billion, compared with $1.02 billion in the 12 months ended Jan. 31, 2009. Sales from the retail segment, which includes the Company's premium retail stores, outlet stores, and day spa locations, were $782.4 million versus $751.4 million last year. Direct sales (phone and Internet) were $256.2 million, compared with $272.9 million in the same period last year.

Net sales for the fourth quarter were $318.4 million, compared with $283.2 million in the fiscal 2008 fourth quarter. Sales from the retail segment, which includes the Company's premium retail stores, outlet stores, and day spa locations, were $221 million versus $199.7 million in the fiscal 2008 fourth quarter. Comparable premium store sales increased 8.9 percent in the fourth quarter versus the fourth quarter of fiscal 2008. Direct sales were $97.3 million, compared with $83.5 million in the same period last year.

Net loss for the fourth quarter was $9.7 million, or 11 cents per share, compared with net loss of $18.6 million, or 20 cents per share, for the fiscal 2008 fourth quarter. Net loss for fourth quarter 2009 included a $600,000 non-cash charge related to certain premium retail store asset impairments, or about 1 cent per share.

"Our fourth quarter results were significantly ahead of the prior year as we began to see an improvement in our comparable store sales and direct revenue, as well as a modest expansion in merchandise margin," Dennis Pence, chairman and chief executive officer of Coldwater Creek, said in a news release "In addition, we continued to focus on expense discipline and ended the quarter with a strong balance sheet. While we are disappointed to report a loss in fiscal 2009, we are confident that we are taking the right steps to position the company for profitability and growth."

Pence anticipates improvements in financial performance.

"For fiscal 2010, we expect to improve merchandise margin as we re-balance our assortments, align our pricing with the high quality and fashion inherent in our product lines, and continue to modify our quarterly sale events," Mr. Pence continued. "In addition, we have a renewed discipline towards inventory management that is focused on ensuring that our inventory investments are aligned with the current economic conditions. At the same time, we will continue to tightly manage expense and capital investments. We expect these efforts to result in a consistent improvement in our operating results in fiscal year 2010."

The company expects to report a loss in the first quarter of fiscal 2010, but expects an improvement over the 8 cent loss per share in the first quarter of fiscal 2009. This assumes a mid-single digit year-over-year increase in total net sales.

For fiscal 2010, the company expects to report earnings per share of between 8 cents and 12 cents, with the majority of the earnings growth coming in the second half of the year.