Cache Estimates Reduced

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. Each of these store concepts carries its own distinctive brand merchandise, which includes sportswear, dresses and accessories (jewelry, belts, and handbags meant to complement the sportswear and dress categories). Cache targets women between the ages 25 and 45.

Cache reported a 4th quarter loss of $0.32 per share, which was in line with its guidance and $0.03 narrower than our estimate. Management's 1st quarter guidance was slightly worse than our forecast. We are reducing our estimates for 2009 and 2010. 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.