Coldwater Creek Inc. (NASDAQ: CWTR) has issued an earnings warning after the close of trading. Its preliminary third quarter results show sales of approximately $225 million. But that is only the start of it. On a same store sales basis, this represents a decline expected to be in the "low-twenties" on a percentage basis.
The womens’ retail outlet now expects a loss of between $0.07 per share and $0.09 per share for the quarter. Thomson Reuters (First Call) has estimates of profit of $0.03 and $264.9 million in sales.
It also expects to end the quarter with a cashequivalent basis of roughly $70 million and retail store inventory persquare foot to decrease approximately 19% over the third quarter of2007. The company now plans to only open approximately 15 new storesin 2009, down from our previous plan of approximately 40 new stores.
The company is noting the same issues as other retailers, although theresults sound far worse. Dan Griesemer,president/CEO said, "Following the recent economic events, weexperienced a significant deterioration in our traffic and salesbeginning the second weekend in October…"
The company anticipates that 2009 capital expenditures will beapproximately half of the amount expected in 2008, and it anticipatesSG&A expenses to be down about $50 million from the prior year.
Coldwater Creek sounds like it is up a creek. It is also without a paddle.
Jon C. Ogg
November 3, 2008