UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JULY 24, 2008
CACHE, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 0 -10345 59 -1588181
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(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION
INCORPORATION) NUMBER)
1440 BROADWAY, NEW YORK, NEW YORK 10018
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 575-3200
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 24, 2008, the Company issued a press release (the "Press
Release") announcing its results for the thirteen- and twenty-six week periods
ended June 28, 2008, confirming it will maintain its previous guidance for the
third and fourth fiscal quarters of 2008, increasing the low end of its fiscal
2008 guidance, and continuing its planned store openings and closings for the
remainder of the fiscal year. The Press Release is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
ITEM 9.01 EXHIBITS
99.1 Press release regarding results for the thirteen- and twenty-six week
periods ended June 28, 2008, guidance for the third and fourth fiscal
quarters of 2008, guidance for fiscal 2008, and continuing plans for
store openings and closings.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
DATED: JULY 24, 2008 CACHE, INC.
By: /s/ MARGARET FEENEY
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MARGARET FEENEY
EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER
Exhibit 99.1
[GRAPHIC OMITTED]
COMPANY CONTACT: MAGGIE FEENEY
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
CACHE INC.
(212) 575-3206
INVESTOR RELATIONS: ALLISON MALKIN/SHAUN SMOLARZ
INTEGRATED CORPORATE RELATIONS
(203) 682-8225/8346
CACHE REPORTS SECOND QUARTER FISCAL 2008 RESULTS
REPORTS DILUTED EPS OF $0.16, EXCEEDING GUIDANCE
MAINTAINS THIRD AND FOURTH QUARTER OUTLOOK
New York, New York - July 24, 2008 - Cache Inc., (NASDAQ: CACH), a
specialty chain of women's apparel stores, reported results for the thirteen
("second quarter") and twenty-six week periods ("first six months") ended June
28, 2008.
For the 13-week period ended June 28, 2008:
o Net sales increased 4.1% to $74.0 million compared to $71.0 million
in the second quarter of 2007. Comparable store sales increased 3%
following a 1% increase in the second quarter of fiscal 2007;
o Net income rose 63.9% to $2.1 million or $0.16 per diluted share from
net income of $1.3 million or $0.08 per diluted share. Net income in
the second quarter of fiscal 2007 included $627,000, or $0.04 per
diluted share in legal settlement costs.
Thomas Reinckens, Chairman and Chief Executive Officer, commented: "We
are pleased to report second quarter results that surpassed our recently raised
guidance. Our strength in an ongoing difficult consumer spending environment
validates the success of our merchandising and marketing strategies, including
our emphasis on collection dressing, as a result of the Adrienne Victoria
Designs acquisition and our improved pricing. These efforts are expected to
raise sales productivity and operating margins going forward as we benefit from
increases in shopping frequency, expansion of our customer base and greater
leverage of expenses."
"During the quarter, we also continued to emphasize expense and inventory
management discipline with average inventory per store at cost down 17% at
quarter end," Mr. Reinckens continued. "As we look ahead,
we remain positive about our near and long term outlook. July month-to-date
comparable store sales are tracking to our plan and we are optimistic regarding
the fall season. We believe the continuation of our strategies has us poised to
gain market share and increase value for all Cache stakeholders."
For the 26-week period ended June 28, 2008:
o Net sales increased 4.7% to $141.7 million compared to $135.4 million
in the first six months of fiscal 2007. Comparable store sales
increased 3% following a 1% gain in the first six months of fiscal
2007;
o Net income was $52,000 or breakeven on a per share basis and included
charges of: $1.5 million or $0.11 per diluted share related to store
closures and $388,000 or $0.03 per diluted share related to the
previously announced management change. This compares to net income
of $1.4 million or $0.09 per diluted share, including $0.04 per
diluted share in legal settlement costs, in the first six months of
fiscal 2007; and
o Adjusted net income for the first six months of fiscal 2008 was $1.9
million or $0.14 per diluted share and excludes store closure and
management change costs. This compares to adjusted net income for the
first six months of fiscal 2007 of $2.1 million or $0.12 per diluted
share, which excludes costs related to the legal settlement.
Gross profit in the second quarter of fiscal 2008 was $34.2 million, or
46.2% of net sales, compared to $33.9 million, or 47.8% of net sales, in the
second quarter of fiscal 2007. For the first six months of fiscal 2008, gross
profit was $62.6 million, or 44.2% of net sales, compared to $62.9 million, or
46.5% of net sales, in the first six months of fiscal 2007. The decline in gross
profit margin for the second quarter was primarily driven by additional costs
associated with the in-house design team acquired in connection with the July
2007 acquisition of Adrienne Victoria Designs and the effect of the new pricing
strategy. For the first six months of fiscal 2008 the decline in gross profit
margin was primarily driven by additional costs associated with the in-house
design team acquired in connection with the July 2007 acquisition of Adrienne
Victoria Designs and the effect of the new pricing strategy, as well as by
increased markdowns.
In total, operating expenses for the second quarter of fiscal 2008 were
$31.0 million, or 41.9% of net sales, as compared to $32.6 million, or 46.0% of
net sales, in the second quarter of fiscal 2007. Operating expenses in the
second quarter of fiscal 2007 included $1.0 million in legal settlement costs.
For the first six months of fiscal 2008, total operating expenses were $62.9
million, or 44.4% of net sales, compared to $62.1 million, or 45.9% of net
sales, in the prior-year period. Operating expenses for the first six months of
fiscal 2008 included a $2.3 million charge related to store closures and
$616,000 in costs related to the previously announced management change.
Operating expenses for the first six months of fiscal 2007 included $2.2 million
in legal fees and settlement costs.
At June 28, 2008, cash and marketable securities totaled $27.4 million,
after utilizing $38.9 million to fund the repurchase of 3.2 million shares since
second quarter end last year. This compares to $66.0 million in cash and
marketable securities at June 30, 2007. Average inventory per store, at cost
decreased 17% at quarter end from the prior-year period.
A table summarizing financial results follows:
TWENTY-SIX WEEKS ENDED THIRTEEN WEEKS Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
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($ thousands, except for per share data, share numbers and store count)
Net sales $ 141,681 $ 135,381 $ 73,973 $ 71,027
Operating income (loss) (273) 801 3,207 1,291
Store exit and management change costs 2,924 - - -
Legal settlement costs - 1,015 - 1,000
Operating income before
one-time costs 2,651 1,816 3,207 2,291
Net income 52 1,428 2,105 1,284
Net income before one-time costs 1,894 2,062 2,105 1,909
Basic earnings per share $ 0.00 $ 0.09 $ 0.16 $ 0.08
Diluted earnings per share $ 0.00 $ 0.09 $ 0.16 $ 0.08
Per share - Store exit and management
change costs $ 0.14 $ - $ - $ -
Per share - Legal settlement costs $ - $ 0.04 $ - $ 0.04
Diluted earnings per share - excluding
one-time costs $ 0.14 $ 0.12 $ 0.16 $ 0.11
Basic weighted average
shares outstanding 13,443,000 16,289,000 13,320,000 16,296,000
Diluted weighted average
shares outstanding 13,462,000 16,719,000 13,357,000 16,672,000
Number of stores open at end of period 297 294 297 294
GUIDANCE
The Company is maintaining its previous guidance for the third and
fourth quarters of fiscal 2008 and increasing the low end of its 2008 fiscal
year guidance.
For the third quarter of fiscal 2008, the Company is maintaining its
guidance for net sales in the range of $62 million to $64 million and diluted
earnings per share in the range of $0.01 to $0.02. The Company continues to
expect third quarter fiscal 2008 comparable store sales to increase in the low
to mid-single digit range. This compares to actual third quarter fiscal 2007 net
sales of $60.6 million and diluted earnings per share of $0.01.
For the fourth quarter of fiscal 2008, the Company is maintaining its
guidance for net sales in the range of $82 million to $84 million and diluted
earnings per share in the range of $0.38 to $0.40. The Company continues to
expect fourth quarter comparable store sales to increase in the low to
mid-single digit range. This compares to actual fourth quarter fiscal 2007 net
sales of $78.5 million and diluted earnings per share of $0.32.
For the full fiscal 2008 year, the Company currently estimates net
sales in the range of $286 million to $290 million and diluted earnings per
share on a GAAP basis in the range of $0.39 to $0.42. This guidance includes
costs of $0.14 per diluted share, which were incurred during the first quarter
of fiscal 2008 and related to the store closures and costs associated with a
previous management change. On an adjusted basis, excluding store closing and
management change costs, the Company currently expects fiscal 2008 diluted
earnings per share in the range of $0.53 to $0.56. This guidance compares to
actual fiscal 2007 net sales of $274.5 million and diluted earnings per share of
$0.40, inclusive of $0.04 per diluted share in legal settlement costs. Adjusted
diluted earnings per share for fiscal 2007 were $0.44.
STORE OPENING PLANS
During the second quarter the Company opened 5 stores and closed 2
locations as part of its plan to improve store productivity. At quarter-end, the
Company operated 297 locations. The Company expects to open approximately 8 new
Cache stores during the second half of fiscal 2008 and close approximately 13
stores, thereby essentially completing its store closure plan. For the fiscal
year, the Company continues to expect to open approximately 16 new Cache stores
and close approximately 21 locations, ending the year with approximately 292
locations and 590,000 square feet in operation.
CONFERENCE CALL INFORMATION
The Company also announced that it will conduct a conference call to
discuss its second quarter fiscal 2008 results today, July 24, 2008 at 9:00 a.m.
Eastern Daylight Time. Investors and analysts interested in participating in the
call are invited to dial (877) 407-0789 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 July 31, 2008 and
can be accessed by dialing (877) 660-6853 and enter account number 3055 and
reference conference code 291549.
ABOUT CACHE, INC.
Cache is a nationwide, mall-based specialty retailer of sophisticated
sportswear and social occasion dresses targeting style-conscious women. Cache
targets women between the ages of 25 and 45 who have a youthful attitude, are
self-confident and fashion-conscious, and require a missy fit. We operate 296
Cache and Cache Luxe stores, primarily situated in central locations in high
traffic, upscale malls in 43 states, the Virgin Islands and Puerto Rico.