Shares of women's apparel retailer Cache (NASDAQ:CACH) moved ahead 3% this morning on news of fourth-quarter and full-year 2003 results that seem to be the product of a company that's getting an awful lot of things right at the moment.
For the year, revenues rose 8% to $215 million on same-store sales growth of 3% and an increase of 24 stores (to a total of 255 in 42 states). Gross, operating, and net profit all rose more quickly than did sales. Net income grew 24% over last year's number. Inventory, not counting merchandise in new stores, closed the year up 10% -- slightly higher than sales growth, but not terribly out of whack.
Cache management can't complain with the way things are going. January same-store sales rose 10% as total revenues improved 15% to $14.3 million for the month. The company is accelerating its expansion this year, with 35 Cache and 10 Lillie Rubin stores -- most planned for the second half -- slated to open. While it's obviously somewhat early to call 2004 numbers, management is directing investors toward top-line growth of at least 16% and earnings-per-share growth of 13% or better.
Those low-end projections have the stock trading at about 20 times next year's earnings. That seems fully valued at the moment -- unsurprising given the shares' remarkable, market-smacking run over the last year. But with a solid balance sheet, a history of free cash flow in recent years and the trailing 12 months, and plans to grow, the company appears to be one worth watching.
Should Cache continue to impress as it has, and turn in numbers on the high side of its projections, investors will likely be enjoying 2004 as much as they did 2003.
Talk about Cache's place in the women's apparel business on our Retail discussion board.
Dave Marino-Nachison can be reached via email.
