Cache, Inc., the specialty chain of women’s apparel stores, reported results for the thirteen (“fourth quarter”) and fifty-two week (“fiscal 2012”) periods ended December 29, 2012.
For the 13-week period ended December 29, 2012:
Net sales decreased 3.3% to $60.8 million from $62.9 million in the fourth quarter of fiscal 2011. Comparable store sales decreased 0.7%, compared to an increase of 12.4% in the fourth quarter of fiscal 2011.
Operating loss totaled $5.0 million, inclusive of $1.1 million in non-cash asset impairment charges. This compares to operating income of $2.4 million in the fourth quarter of 2011, inclusive of $719,000 in non-cash asset impairment charges partially offset by a $345,000 benefit from a gain on note payable settlement.
Net loss totaled $5.5 million, or $0.41 per diluted share, which included the following costs: (i) a $2.5 million or, $0.18 per diluted share, tax valuation allowance charge; and (ii) a $682,000, or $0.05 per diluted share, non-cash asset impairment charge.
This compares to net income of $1.9 million, or $0.14 per diluted share, in the prior year period, which included the following benefits and costs: (i) a $562,000, or $0.04 per diluted share, benefit from the reversal of the tax valuation allowance against net deferred tax assets; (ii) a $396,000, or $0.03 per diluted share, non-cash store impairment charge; and (iii) a $190,000, or $0.02 per diluted share, benefit from a gain on note payable settlement.
Adjusted net loss, which excludes the costs and benefits referenced above, was $2.4 million, or $0.18 per diluted share, as compared to adjusted net income of $1.5 million, or $0.11 per diluted share, in the fourth quarter of fiscal 2011. (See the table on page 3 for a reconciliation of net income (loss) to adjusted net income (loss).)
For the 52-week period ended December 29, 2012:
Net sales increased 0.1% to $224.2 million from $223.9 million in fiscal 2011. Comparable store sales increased 2.7%, compared to an increase of 8.1% in fiscal 2011.
Operating loss totaled $13.4 million, inclusive of $1.1 million in non-cash asset impairment charges. This compares to operating income of $2.2 million in the prior year period, inclusive of: (i) a $719,000 non-cash asset impairment charge; (ii) a $450,000 legal expense reimbursement; and (iii) a $345,000 benefit from a gain on note payable settlement.
Net loss was $12.1 million, or $0.90 per diluted share, inclusive of the following costs: (i) a $3.8 million, or $0.28 per diluted share, tax valuation allowance charge; and (ii) a $693,000, or $0.05 per diluted share, non-cash asset impairment charge.
This compares to net income of $2.1 million, or $0.16 per diluted share, in fiscal 2011, inclusive of the following benefits and costs: (i) a $833,000 benefit, or $0.06 per diluted share, from the reversal of the tax valuation allowance against net deferred tax assets; (ii) a $396,000, or $0.03 per diluted share, non-cash store impairment charge; (iii) a $248,000, or $0.02 per diluted share, legal expense reimbursement; and (iv) a $190,000, or $0.02 per diluted share, benefit from a gain on note payable settlement.
Adjusted net loss, which excludes the costs and benefits referenced above, was $7.6 million, or $0.57 per diluted share, compared to fiscal 2011 adjusted net income of $1.2 million or $0.09 per diluted share. (See the table on page 3 for a reconciliation of net income (loss) to adjusted net income (loss).)
Fourth Quarter and Full Year Operating Results
Gross profit for the fourth quarter of fiscal 2012 was $20.7 million, or 34.0% of net sales, compared to $27.2 million, or 43.3% of net sales, in the fourth quarter of fiscal 2011. For fiscal 2012, gross profit was $83.9 million, or 37.4% of net sales, compared to $96.4 million, or 43.1% of net sales, in fiscal 2011. The gross profit decrease in the fourth quarter and fiscal year was primarily driven by increases in markdowns and an increase in e-commerce related costs relating to significantly higher e-commerce sales.
In total, operating expenses for the fourth quarter of fiscal 2012 were $25.7 million, or 42.2% of net sales, as compared to $24.8 million, or 39.5% of net sales, in the fourth quarter of fiscal 2011. For fiscal 2012, total operating expenses were $97.3 million, or 43.4% of net sales, compared to $94.2 million, or 42.1% of net sales, in fiscal 2011.
The increase in operating expenses for the fourth quarter and fiscal year 2012 was primarily driven by increases in impairment charges, professional fees, marketing, as well as e-commerce costs and were partially offset by savings in payroll and related expenses.
At December 29, 2012, cash and marketable securities totaled $18.4 million, as compared to $29.5 million at December 31, 2011. Total inventory at cost decreased 3.8% to $21.2 million at year-end from the prior-year period.