Coldwater Creek Inc. (Nasdaq: CWTR) said it made a profit on stronger revenue for the first quarter, as the women’s specialty apparel retailer benefited from a rebound in consumer spending as well as its strategic merchandising shift.
For the fiscal first quarter ended May 2, net income reached $2.3 million, or 3 cents per share, compared with a net loss of $7.6 million, or a loss of 8 cents per share, quarter-over-quarter.
Revenue climbed to $243.1 million for the quarter from $228.4 million posted for the equivalent quarter of fiscal 2009, an 8% increase primarily driven by revenue derived from eight additional stores, year-over-year.
The company said gross margin improved to 37.4% for the first quarter from 31.1% for the equivalent quarter last year, citing a realignment of price points and greater leverage of occupancy costs for the widening of gross margin.
“We believe that the changes to our merchandise strategy, rebalancing of our pricing strategy, adjustment of our promotional cadence and sale events, and restoration of our direct segment business will position the company for improved long term performance and growth,” the company said in its SEC filing.
Selling, general and administration (SG&A) costs for the first quarter totaled $86.5 million, up from $82.7 million for the first quarter last year. The company cited increased advertising and promotion as well as higher employee-related costs for the increase in SG&A costs.
During the fiscal fourth quarter, the company embarked on initiatives to improve performance, including improving merchandise mix, adjusting pricing points, growing its direct online sales business, and executing a modified sales events approach.
The company didn’t offer guidance for the second quarter and beyond, but did say that management remains cautious for fiscal 2010.
“Although macroeconomic conditions have improved to some extent, weak consumer spending has been prolonged with persisting concerns about high unemployment, income and deterioration in household net worth,” the company stated in its 10Q.
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