Cache Lowers Guidance

Cache Inc (CACH - Snapshot Report) lost more than a quarter of its value this morning, a day after the company warned of a third-quarter loss and said business trends would remain gloomy through the rest of the year. The women's apparel retailer now sees a quarterly loss of 12 cents to 14 cents per share compared with its prior profit view of 1 cent to 2 cents.

The company said its sales, which have suffered due to the ongoing credit crisis, worsened further as its stores in Florida, Texas and Louisiana had to be closed after hurricane Ike. The analyst community believes that conditions are not likely to ease for Cache in the near term, and recommend shareholders remain on the sidelines. Currently the stock trades at a premium to the overall market, with a P/E of 19.8X.