Has Coldwater Creek
Last night, the company warned that profits for the holiday quarter will come in between $0.16 and $0.17 a share. That is sharply off the $0.26 to $0.27 per share the company had been projecting back in November.
The company had singled out a sluggish start to its critical holiday shopping season even as it made its initial projection. It dismissed the notion that the malaise would continue, even predicting that Christmas falling on a Monday would give shoppers an extra holiday to stock up on their Coldwater Creek goodies.
Well, the shoppers didn't come in the large numbers that were expected. That's a problem when you're a company like Coldwater Creek, with seasonal garb like knit sweaters and suede riding jackets that need to be cleared out over the holidays to begin making room for spring fashions. That forced the company to mark down more of its merchandise than it would have liked when it began its clearance sale the day before Christmas. That's a margin-killer right there.
Coldwater Creek is getting pummeled over the shortcoming, but let's dig a little deeper. The company was strictly a catalog-mailing retailer until it launched its online store in 1999. A year later, it hired a retail executive with experience at Federated
Retailing comes with its hiccups. Strong concepts will bounce back. The key here will be Coldwater Creek's commitment to focus. I've seen promising concepts like Hot Topic
Focus, Coldwater Creek, focus. You've paddled too far upstream only to find that you've been paddling with a spatula.
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Longtime Fool contributor Rick Munarriz loves shopping by catalog -- as long as he can find a parking space. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.