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2011 Was Cruel to Coldwater Creek

As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.

Today, let's take a look at Coldwater Creek (Nasdaq: CWTR  ) . The entire retail industry has struggled mightily through years of recession and the subpar recovery that followed it, and while some retailers have bounced back, Coldwater Creek has largely gotten left behind. Below, I'll take a closer look at the events that moved shares of Coldwater Creek this year.

Stats on Coldwater Creek

Year-to-Date Stock Return (65.6%)
Market Cap $133 million
Total Revenue, Trailing 12 Months $801 million
Net Loss, Trailing 12 Months ($124 million)
1-Year Revenue Growth (23.5%)
CAPS Rating **

Source: S&P Capital IQ.

Why did Coldwater Creek get wet this year?
The big challenge for all retailers these days is that consumers are responding to two different messages. On one hand, consumers don't have a lot of money, so they want bargain prices. Yet at the same time, they're still willing to pay up for quality -- and fashion-conscious upper-class consumers are still opening their pocketbooks for the latest styles.

That puts both Coldwater Creek and Talbots (NYSE: TLB  ) , which has had a similarly miserable year, in a bind. The retailers face competition not only from upscale department stores like Nordstrom (NYSE: JWN  ) and Saks (NYSE: SKS  ) , but also from more successful fellow specialty retailers including ANN (NYSE: ANN  ) and Chico's (NYSE: CHS  ) .

So far, Coldwater Creek hasn't been able to meet the challenge. In September, the company announced a 28% drop in sales, reversing a prior-year profit with a $0.30 per share loss and falling well below analysts' earnings expectations. The company said it would close underperforming stores and continued to burn huge amounts of cash while seeing gross margins fall again. Things didn't get any better in the most recent quarter, with Coldwater Creek seeing a whopping 20% drop in same-store sales and the company having to do a big dilutive secondary offering at just $0.85 per share in October -- well below where it was trading at the time.

It's clear that Coldwater Creek is far from solving its problems. But you shouldn't count out retail entirely. In fact, the Motley Fool's pick for the top stock of 2012 is in the retail business. Find out what it's doing differently in the Fool's new special free report. Don't wait; click here and read it today.

Click here to add Coldwater Creek to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.

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Related Tickers

12/31/1969 7:00 PM
CWTRQ $0.00 Down +0.00 +0.00%
Coldwater Creek, I… CAPS Rating: *
ANN.DL $0.00 Down +0.00 +0.00%
ANN CAPS Rating: **
CHS $12.13 Up +0.17 +1.42%
Chico's FAS CAPS Rating: **
JWN $54.79 Up +0.66 +1.22%
Nordstrom CAPS Rating: ****
SKS.DL2 $0.00 Down +0.00 +0.00%
Saks, Inc. CAPS Rating: *
TLB.DL $0.00 Down +0.00 +0.00%
The Talbots, Inc. CAPS Rating: *