By
Reuters
Published
May 13, 2010
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Cache's first quarter dismal; second quarter trends push shares up

By
Reuters
Published
May 13, 2010


Photo: www.cache.com

May 12 (Reuters) -Women's apparel retailer Cache Inc (CACH.O) posted a much bigger-than-expected quarterly loss due to heavy discounting, but said trends so far in the second quarter were looking up, sending shares up 10 percent in morning trade.

The New York-based company said so far in the second quarter, comparable sales were up in the low-single digits, as it sees good response to the fresh merchandise that has been rolled out in stores.

Cache, which caters chiefly to 25-to-45 year-old women, also expects to return to profitability in the second quarter.

"We have strengthened the quality of our offerings and are introducing cohesive collections," Chief Executive Thomas Reinckens said.

"We also expect our higher impact marketing to drive store traffic, as we improve store visuals, marketing mailers and introduce strategic promotions," he added.

However, during the first quarter ended April 3, the company took to big discounting to sell off older merchandise. This, coupled with a very tight inventory, hurt profit and sales, the CEO said.

Cache posted a loss of $4.1 million or 32 cents a share in the quarter, while analysts were expecting a loss of 18 cents a share, according to Thomson Reuters I/B/E/S.

Revenue fell 8 percent to $48.6 million.

Shares of the company were up 10 percent to $6.91 Wednesday 12 May on Nasdaq. (Reporting by Nivedita Bhattacharjee in Bangalore)

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