Cache Reports Fourth Quarter and Fiscal 2007 Results.Reports 7% Increase in January 2008 Comparable Store Sales Introduces First Quarter Fiscal 2008 Guidance of $0.03 - $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Cache Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CACH CACH Canyon de Chelly National Monument (US National Park Service) CACH Carolina Chickadee CACH Canadian Adult Congenital Heart Network CACH Chicago Area Consolidation Hub (United Parcel Service) ), a specialty chain of women's apparel stores with 293 stores currently open, reported results for the 13 and 52 week periods ended December 29, 2007. For the thirteen week period ended December 29, 2007: * Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight decreased by 6% to $78.5 million compared to $83.6 million for the same period last year and comparable store sales declined 7%. Fourth quarter fiscal 2006 net sales included $0.6 million in sales for the former Lillie Rubin business; * Net income totaled $4.9 million or $0.32 per diluted share compared to net income of $4.2 million, or $0.26 per diluted share for the same period last year. Net income in the fourth quarter of fiscal 2006 included costs of $159,000 or $0.01 per diluted share related to the exit of Lillie Rubin and $422,000 or $0.03 per diluted share related to Lillie Rubin losses. "The fourth quarter proved difficult for the Company, as the soft consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. environment led to increased promotional activity, compared to the prior year," stated Thomas Reinckens, Cache Chairman and Chief Executive Officer. "On a positive note, we managed expenses and inventory well, which enabled us to report fourth quarter earnings above last year despite lower sales." "Strategically, fiscal 2007 included many noteworthy accomplishments. We acquired Adrienne Victoria Designs, paving the way for our vertical integration and adding significant design, merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. and production talent to our organization. We launched our loyalty program and began to optimize optimize - optimisation our expanded marketing platform. In addition, we expanded the range of products offered in our stores, to meet more of our customers lifestyle needs. Finally, we initiated a stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program, demonstrating the conviction in our strategies and confidence in our long-term outlook. As we begin fiscal 2008, we believe we are implementing the initiatives that will lead to increased sales productivity, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and profitability for our Company." For the fifty-two week period ended December 29, 2007: * Net sales decreased by 2% to $274.5 million compared to $279.0 million for the same period last year and comparable store sales declined 1%. Fiscal 2006 net sales included $13.1 million in sales for the former Lillie Rubin business; * Net income totaled $6.5 million or $0.40 per diluted share including $78,000 or $0.00 per diluted share reversal of Lillie Rubin exit costs and $1.0 million, or $0.04 per share related to legal settlement costs. This compares to net income of $8.3 million or $0.51 per diluted share last year, which included costs of $5.7 million or $0.20 per diluted share related to the exit of Lillie Rubin and $3.2 million or $0.20 per diluted share in Lillie Rubin losses, in fiscal 2006. Additionally in Fiscal 2007, the Company: * Acquired Adrienne Victoria Designs, its largest supplier, which significantly advanced the Company's direct sourcing and manufacturing efforts as well as expanded its talent in design, production and merchandising; and * Initiated a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program, with a current total authorization The right or permission to use a system resource; the process of granting access. See access control. to buy back up to 3.5 million shares, representing a reduction of 21% of the common stock outstanding at the commencement of the program. Fourth Quarter and Full Year Operating Highlights Gross profit in the fourth quarter of fiscal 2007 was $36.4 million, or 46.4% of net sales, compared to $40.4 million, or 48.3% of net sales, in the fourth quarter of fiscal 2006. For the fiscal year, gross profit was $127.0 million, or 46.3% of net sales, compared to $133.1 million, or 47.7% of net sales, in the prior year period. The decline in gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the fourth quarter and fiscal year can be attributed to increased markdowns and lower leverage on buying and occupancy costs Occupancy costs are the whole life costs of buildings and their associated land from occupancy until disposal. These costs may be incurred on a regular or irregular basis. Occupancy costs are those costs related to occupying a space including; rent, real estate taxes, personal , partially offset by lower sourcing costs. In total, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of fiscal 2007 were $29.6 million, or 37.8% of net sales, as compared to $33.6 million, or 40.2% of net sales in the fourth quarter of 2006. For the fiscal year, total operating expenses were $119.7 million, or 43.6% of net sales, as compared to $121.5 million, or 43.5% of net sales, in the prior year period. For the fourth quarter, reduced marketing expenses was the primary driver of the decline in total operating expenses and improvement in operating expenses, as a percent of sales, as compared to the prior year period. Operating expenses for fiscal 2007 included $0.7 million of increased marketing expenses, $0.9 million of increased professional fees and legal settlement costs and $1.1 million in increased depreciation expense, as compared to the prior year period. Operating expenses for fiscal 2006 included $5.7 million in Lillie Rubin exit costs. At December 29, 2007, cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $50.1 million, with $24.2 million utilized to fund the purchase of 1.7 million shares during the year, as compared to $61.5 million at December 30, 2006. Inventory was below the year ago period at $30.5 million, as compared to $34.8 million at December 30, 2006, reflecting a 12% decline. Average inventory per store, at cost decreased 23% at quarter end from the prior year period. Working capital decreased $23.7 million to $59.7 million from $83.4 million, reflecting the use of cash to fund the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of shares, during the year. A table summarizing financial results follows: [TABLE OMITTED] Guidance The Company is introducing guidance for the first quarter of fiscal 2008. The Company estimates net sales in the range of $65 to $66 million, compared to actual net sales of $64.4 million in fiscal 2007. This guidance assumes comparable store sales of flat to an increase in the low-single-digit range. First quarter 2008 earnings are estimated in the range of $0.03 to $0.04 per diluted share, as compared to actual first quarter fiscal 2007 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.01. Store Opening Plans The Company also noted that it plans to open between 10 and 12 new stores, while closing approximately 5 stores in fiscal 2008. The Company plans to end the year with approximately 303 locations, increasing square footage by approximately 2% to approximately 613,000 square feet. The Company also indicated that it expects to open approximately 8 new stores during the first half of the year. January 2008 Comparable Store Sales Separately, the Company announced January 2008 comparable store sales. Comparable store sales (sales for stores open at least one year or more) increased 7% during the four-week January 2008 period, following a 10% increase in the prior-year period. Total revenues for the four-week period ended January 26, 2008 increased $1.2 million, or 8% to $16.6 million. "We started fiscal 2008 solidly, as evidenced by our 7% increase in January comparable store sales," Mr. Reinckens stated further. "This performance was driven by the continued favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. acceptance of our contour contour or contour line, line on a topographic map connecting points of equal elevation above or below mean sea level. It is thus a kind of isopleth, or line of equal quantity. offerings. We also received a favorable benefit of one additional day's sales in the pre-New Year's Eve period in early January, as compared to last year. We were also pleased to achieve increases in all categories of our business, further indicating that our merchandising initiatives are working and generating excitement in our stores." Conference Call The Company also announced that it will conduct a conference call to discuss its fourth quarter and fiscal 2007 results today, Wednesday, February 6, 2008 at 9:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial (800) 762-8795, approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.cache.com. A replay of this call will be available until February 13, 2008 and can be accessed by dialing (800) 406-7325 and entering code 3839342. Certain matters discussed within this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. Although Cache, Inc. believes the statements are based on reasonable assumptions, there can be no assurance that these expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, ability to successfully open new stores, introduction of the Cache Luxe luxe n. 1. The condition of being elegantly sumptuous. 2. Something luxurious; a luxury. [French, luxury, from Latin luxus. concept, dependence on management, dependence on vendors and distributors, reliance on foreign manufacturers, material weakness in our internal controls, industry trends, merchandise and fashion trends, competition, seasonality and changes in general economic conditions and consumer spending patterns, as well as other risks outlined from time to time in the filings of Cache, Inc. with the Securities and Exchange Commission. For further information contact Maggie Feeney Executive Vice President and Chief Financial Officer, Cache, Inc., 1440 Broadway, New York, New York 10018, (212) 575-3206. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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