Cost Plus, Inc. (CPWM)

First quarter sales and earnings per share for Cost Plus Inc. (CPWM - Analyst Report) were slightly above our estimates. Even so, the company's sales declined 9% year-on-year and it reported a net loss of $20 million.

The company is closing stores, cutting costs, and trying to preserve cash, but those moves will do little reverse its weak sales trends and merchandise margins. In addition, management's guidance for the second quarter cautioned investors to prepare for more of the same.

Cost Plus expects same-store sales to decrease 9.5%-14.5% and a pre-tax loss from continuing operations of $14-$21 million. We have an Underperform rating on CPWM shares. Our six-month target price is 50 cents per share.