CWTR's management said, "We expect the challenges we experienced with our fall assortment to continue during the fourth quarter." It continued: "In addition, weakness in consumer spending persists as a result of continued uncertain macroeconomic conditions reflected in reduced incomes, high unemployment and deterioration in household net worth. We believe these conditions continue to have a negative impact on our sales, gross margin and operating performance."
What a lame excuse! The other retailers (Macy's, JCPenney, Sears, Nordstrom, and most of the teen retailers) did not blame "the economy" or "macroeconomic conditions" because they turned profits. When companies are doing things right, they don't have to make excuses. To top it off, they are reporting that the 4th quarter will be as poor as this one and may lose 25-35 cents per share this quarter, worse than Wall Street expects. That means this stock could crash again when they report their next quarter.
"To top it off, they are reporting that the 4th quarter will be as poor as this one and may lose 25-35 cents per share this quarter, worse than Wall Street expects. That means this stock could crash again when they report their next quarter."
Not to toot my own horn... but... As you can see from my 9 Dec. 2010 post, I called it almost to the penny!
Wow, so not only was the 3rd and 4th quarters both big disappointments, the first quarter is going to be a loss worse than the previous two quarters. It looks like their trying to break a Wall St. record of most consecutive quarters with 25-35 cent losses by a small/mid-cap company.
Well, you can rest assured that Management is on top of this turnaround. There is nothing to fear. The cause of all the bad performance was clearly due to (fill in the blank with whatever you want, but don't blame Management, to explain the fall of this company).
How many people in Management positions and memebers of the Board of Directors have the last name Pence? Not even Books-A-Million, where the Anderson family has their hands in every element of the supply chain and cost structure by inventing in and creating side businesses that deal directly with Books-A-Million smells as fishy as what the Pence family has going on.
For those whom are very upset about losing money in this stock, you can sleep better at night resting assured that Dennis Pence and his family have really enjoyed wining-and-dining on your hard-earned money for so long.
Yes, it was actually a good article from top to bottom. I do agree with the premise that CWTR is poorly run and should only maintain any price support whatsoever simply because it is getting all the way down to book value and buyout value.
However, I would also point out that retail is one of the simplest things to turnaround... If you know what you're doing.
The biggest problem with Coldwater Creek is simply that their clothing is high-end-high-priced clothing targeting a more mature audience. There are too many other retailers who sell similar clothing cheaper all while targeting a more youthful look. I recently went into a Coldwater Creek (Christmas shopping for my mother) and the store manager was standing at the entrance begging people to come in and look at the sales. It's always easy to see how a retailer is doing: Is the store manager running around like a chicken with his head cut off trying to restock the store that is getting sold out from under him, or is the store manager ringing at the register helping the associates trying to
get the long line at the register down, or rather is the store manager just standing at the door begging people to come in to take a look?
But if the company's stock can hold support down here at these prices, and the company can start getting closer to breaking even and the economy doesn't have another downturn over the next 6 months, there might be a chance for a speculative investor to make some money off of it.
These are the same statements that CWTR has been making for the last 3 years. Could it be that the problem is that their inventory is literally the same for the past 5 years? Investers wise up-- this ship has sailed down the creek.
I think if you look at other similiars CWTR had a lot of company. TLB, CBK, CHRS, CACH, NWY all struggled this year or this quarter and have forecasted poor numbers.
That doesnt let mgm off the hook. But they are not alone.
Pence always gives pessimistic guidance. Christmas will be better than he expects. Not all of the bad in last quarter was the fashion. Consumers took a breather. All the women's apparel stores were off. The winter fashions are different, they might go over better.
That said, this stock could be driven down to pennies. There is no fighting a trend. Either only buy above the 50 dma, or have a lot of patience.
all i can say is i feel for longs. this is in a strong downward trend, but i honestly don't expect it to last. could it be shorted or sold down to pennies, yes! but will it is a different matter. i would definitely recommend averaging in on this one. don't be a hero and buy your whole position all at once. their balance sheet is too strong for this thing to go very much lower. fyi, if had any extra money and this thing went to the low $2s I would be buying this thing aggressively. with the tax cuts extended recently there are a lot of rich housewives that will go to the store on a monthly basis and drop like thousands of dollars.