Coldwater Creek Inc. today reported financial results for the quarter and fiscal year ended January 28, 2012.
Fourth Quarter 2011 Operating Results: Consolidated net sales were $224.4 million, compared with $252.1 million in the fiscal 2010 fourth quarter. During the fourth quarter of fiscal 2011, the Company recorded net sales of $11.8 million as a result of a favorable cumulative one-time adjustment reflecting an updated estimate of gift card breakage (see "Gift Card Breakage Income" below). Net sales from the retail segment, which includes the Company's premium retail stores, outlet stores and day spa locations, declined 7.1 percent to $173.5 million, from $186.7 million in the same period last year, primarily reflecting a decrease in comparable premium retail store sales of 11.4 percent. The segment's 2011 results benefited from a $10.7 million cumulative one-time adjustment to net sales representing the retail segment's portion of the gift card breakage income. Fourth quarter net sales from the direct segment, which includes internet, phone and mail orders, were $50.8 million versus $65.4 million in the same period last year, representing a 22.3 percent decline in net sales primarily due to lower on-line clearance activity. Direct segment net sales included $1.1 million of the cumulative one-time adjustment for gift card breakage income.
Consolidated gross profit was $73.1 million, or 32.6 percent of net sales, compared with $60.7 million, or 24.1 percent of net sales, for the fiscal 2010 fourth quarter. Gross profit margin increased 850 basis points, which included a 370 basis point benefit resulting from the cumulative one-time adjustment for gift card breakage income. The remaining 480 basis point improvement is primarily due to higher merchandise margins reflecting improved product performance and lower overall inventory levels throughout the holiday season, which was partially offset by deleveraging of buying and occupancy expense.
Full Year Fiscal 2011 Operating Results: Consolidated net sales for fiscal 2011 were $773.0 million, compared with $981.1 million in fiscal 2010. Net sales from the retail segment were $595.2 million, versus $732.4 million last fiscal year. Direct segment net sales were $177.8 million, compared with $248.7 million in the last fiscal year.
Consolidated gross profit for fiscal 2011 was $229.3 million, or 29.7 percent of net sales, compared with $307.3 million, or 31.3 percent of net sales, in fiscal 2010. The decline in gross profit margin was primarily due to deleveraging of occupancy expenses, partially offset by a slight improvement in merchandise margins and a 110 basis point benefit from the cumulative one-time adjustment for gift card breakage income.