Cost Plus hits new 52-week low as Q2 loss widens
Shares of Cost Plus Inc. (Nasdaq: CPWM) have fallen to a new 52-week low after the specialty retailer of casual home living and entertaining products reported after Thursday’s close that its second-quarter net loss widened.
The net loss for the three months ended August 4 was $18.0 million, or $0.81 per share, compared with a loss of $14.2 million, or $0.64 per share, a year earlier. Sixteen analysts polled by Thomson Financial were expecting the Oakland, Calif.-based company to report a smaller net loss of $0.65 per share.
Net sales of $215.2 million also missed Wall Street’s projections. Analysts were calling for net sales of $217.28 million. Cost Plus booked sales of $215.3 million during the same period of 2006.
The company, which operated a total of 296 stores in 34 states as of early August, reported that same-store sales for the quarter decreased 7.6%, compared with a 3.2% decrease last year.
Cost Plus attributed the wider loss to stolen or missing inventory.
“The company has absorbed significant expense associated with inventory adjustments that are now behind us,” said president and CEO Barry Feld. “We have implemented the discipline necessary to exit seasonal and discontinued product on a timely basis, and added tight controls over inventory investments.”
Looking ahead to the third quarter, Cost Plus said it plans to open one more store and projects net sales in the range of $217 million to $223 million, in line with analysts’ forecast of $219.44.
The company also anticipates a third-quarter net loss of between $16 million and $18 million, or between $0.73 per share and $0.80 per share. Analysts were calling for a narrowed net loss of $0.70 per share.
Unlike last year, during this third quarter Cost Plus said that is not planning aggressive promotional and coupon activities.
Cost Plus also announced that CFO Thomas D. Willardson left the company, to be replaced by Jane L. Baughman, former senior vice president of financial operations.
At 1:02 p.m. ET shares had fallen $0.86, or 17%, to $4.14.
