Cache Righting Itself for Rebound

Cache Inc. (CACH - Snapshot Report) is a specialty retailer, which operates stores selling women's apparel and accessories under the names Cache and Cache Luxe.

The company reported disappointing December sales, and management lowered its EPS guidance for the fourth quarter from a gain of $0.28-$0.33 per share to a loss of $0.36-$0.38 per share. We are reducing our estimates for 2008 and 2009 accordingly. Macro headwinds continue to pressure consumer spending, and Cache’s sales trends remain weak.

Still, the company’s balance sheet is solid, its inventories are lean and it continues to cut costs -- all of which position the company for the eventual rebound for retailers. We maintain our Hold rating. Cache should report fourth quarter earnings during the week of February 2.

Read the full analyst report on CACH