Cost Plus, Inc. (CPWM)

Second quarter net sales for Cost Plus, Inc. (CPWM - Analyst Report) declined 13.0% compared to the second quarter of last year, while same-store sales decreased 10.9%. The specialty retailer also 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 third quarter cautioned investors to prepare for more of the same.

Cost Plus expects same-store sales to decrease 6%- 11% and a pre-tax loss from continuing operations of $19-$24 million. We have an Underperform rating on CPWM shares. Our six-month target price is $0.50.