Coldwater beats expectations in 3Q

Coldwater Creek Inc., the Sandpoint-based retailer of women’s clothing and accessories, reported a net loss of $1.3 million, or 1 cent per share, for the Nov. 1 quarter. That result marked an improvement from the $6.2 million, 7-cent-per-share loss a year earlier. Net sales dropped to $228.5 million, from $271.2 million a year earlier, “primarily as a result of a decrease in retail store traffic and lower direct-channel sales,” the company said in a release.

Sales from the retail segment, which includes Coldwater’s premium retail stores, outlet stores and day spas, dropped to $175.4 million from $186.3 million in the year-earlier quarter. Comparable-store sales dropped 20.5 percent. Phone and Internet sales dropped to $53 million, from $84.9 million a year earlier. Gross profit dropped to 37.7 percent of net sales, from 39.8 percent, partly because of the drop in comparable-store sales, the company said. But selling, general and administrative expenses also dropped.

Analysts on average expected the company to report at 8-cent-per-share loss on $225.53 million in sales

Coldwater said its cash position increased from $62.5 million at the end of fiscal 2007 to $72.4 million at the end of the third quarter. The company generated cash from operating activities of $6.2 million in the third quarter.

President and CEO Daniel Griesemer said the company is not satisfied with its third quarter results.

“And while the external environment remains challenging, our business benefited from better-than-anticipated cost saving measures across a number of areas, resulting in third quarter financial performance that exceeded our revised guidance,” he said.

Coldwater is confident that its holiday product line will “resonate with consumers in today’s economic climate.”

He said despite the impact of the consumer environment, “we are confident that our strong balance sheet will enable us to weather a prolonged downturn in consumer spending.”