Cache, Inc.'s (NASDAQ:CACH) stock tumbled over 17 per cent one day after saying it sees a wider net loss in third-quarter, as less people shopped at its stores and spent more on ads to clear out its summer inventory.
Shares fell 17.23 per cent crashing to $2.69 each on the Nasdaq on Friday.
The New York-based specialty retailer, which sells everything from dresses to necklaces and earrings, expects third-quarter revenue of $45.8 million.
Cache also foresees a wider net loss of 39 to 41 cents per share. This compares with a loss of 14 cents a share in 2011.
"While we expected our third quarter performance to be negatively impacted by increased promotional activity to clear our summer sportswear assortment, sales of our early fall offerings were equally challenging, lacking the fashion that our customers expect from Cache," Cache chief executive Thomas Reinckens said in a statement.
Same-store sales are forecast to drop three per cent. That compares to a same-store sales increase of 5.7 per cent seen last year.
Comparable store sales are a key metric used to gauge a retailer's financial health because it excludes results from shops recently opened or closed during the year.
Inventory, at quarter's end, is expected to be flat with last year. It also expects to have cash as well as marketable securities of $17 million with no funded debt.
Cache is a mall-based retailer with 262 stores in 42 states as well as the U.S. Virgin Islands and Puerto Rico.