Coldwater Creek posts wider 3Q loss on tax charge

AP News
Posted: Nov 24, 2009 5:07 PM

Women's apparel retailer Coldwater Creek Inc. said Tuesday its loss widened in the third quarter, largely because of a hefty tax charge and higher promotional costs.

The performance missed Wall Street expectations, and shares fell 34 cents, or 6 percent, to $5.35 in after-hours trading, after gaining 12 cents during the regular session.

For the three months ended Oct. 31, the company lost $34 million, or 37 cents per share. That compared with a loss of $1.3 million, or a penny a share in the year-ago period.

The results included a non-cash income tax charge of $26.3 million, or 29 cents per share. The company also recorded $3.8 million in severance charges for its former CEO.

Quarterly sales were $266.7 million, compared with $228.5 million in the same quarter of 2008.

Excluding one-time charges, the company said its quarterly loss was $3.9 million, or 4 cents per share.

On average, analysts surveyed by Thomson Reuters expected a loss of 3 cents per share on sales of $232.2 million. Analysts do not include one-time charges in their forecasts.

Coldwater said its drop in gross profit, from 37.7 percent to 36.4 percent of sales, was primarily the result of higher promotional costs and lower markups.

Dennis Pence, Coldwater's chairman and CEO, said changes in "pricing and sourcing" should improve the company's margins.