Shares of Coldwater Creek Inc. jumped more than 40 percent Wednesday after the women’s retailer posted a surprise second-quarter profit, due in part to an improvement in fashion and marketing efforts.
The Sandpoint, Idaho-based firm said for the quarter ended July 31, it swung to a profit of $1.5 million, or 2 cents a diluted share, from a net loss of $4.9 million, or 5 cents, a year earlier. An increase in “fashion-forward” apparel sold at full price helped boost net sales 12.6 percent to $253.5 million, from year-ago sales of $225.2 million, according to the company.
Analysts polled by Yahoo were looking for a net loss of 4 cents a share on sales of $233.4 million.
Same-store sales edged up 4.8 percent, while gross margin dipped to 33.4 percent of sales from 33.6 percent.
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“During the first two quarters of 2010, we’ve demonstrated our ability to manage the business more consistently and predictably, regardless of the macroeconomic environment,” co-founder, chairman and chief executive officer Dennis Pence said on the conference call. “The changes we have implemented to our pricing and sales strategies have enabled us to generate significant increases in IMU [initial markup], which, along with tighter inventory buys for the upcoming fall and holiday seasons, positions us to more fully realize gross margin improvements in the second half of the year.”
During the first half, Coldwater turned a profit of $3.8 million, or 4 cents a diluted share, compared with a loss of $12.5 million, or 14 cents a share, in the prior-year period. Sales expanded 9.5 percent to $496.6 million versus $453.6 million.
The company said it anticipates reporting third-quarter EPS of between 1 cent and 4 cents, which would be in range of analysts’ projections of 3 cents a share.
Shares ended the day at $4.75, up $1.40, or 41.8 percent.