U.S. News

Coldwater Creek Raises 2007 Outlook, Shares Surge


Shares of Coldwater Creek surged on Wednesday after the company posted a higher quarterly profit late Tuesday, which topped its own forecast, and raised its fiscal 2007 earnings outlook.

The company' stock was also buoyed by a positive response from Wall Street: Lehman raised its price target on shares of the company to $27 from $19, while Brean Murray increased its price target to $27 from $25.

In a conference call, the company said it now expects fiscal 2007 earnings of 61 cents to 67 cents a share on net sales of $1.26 billion to $1.28 billion. The company had previously forecast earnings of 55 cents to 63 cents a share on net sales of $1.24 billion to $1.27 billion.

For the fiscal year, analysts expect earnings of 62 cents a share before exceptional items, on revenue of about $1.28 billion, according to Reuters Estimates.

Coldwater Creek reported first-quarter net income of $12.0 million, or 13 cents a share, compared with $11.6 million, or 12 cents a share, a year earlier. Results were driven by a solid response to its spring merchandise and cost-control measures.

Net sales rose 30.7 percent to $281.3 million.

In February, Coldwater Creek had forecast first-quarter earnings of 7 cents to 9 cents a share on net sales of $260  million to $265 million.

Analysts on average expected earnings of 9 cents a share,  before exceptional items, on revenue of $264.5 million, for the latest first quarter, according to Reuters Estimates.

"We added new stores and gained additional market share during the period, despite the challenging traffic-related environment which continues to impact the women's specialty apparel sector," Chief Executive Dennis Pence said in a statement.

Sales at stores open at least a year rose 7.3 percent for the three-month period ended May 5.

The company said it opened 12 premium retail stores during  the first quarter.