Cache Reports Flat March Comparable Store Sales; Company Revises Guidance

Business Wire, April 7, 2005

NEW YORK -- Cache, Inc. (NASDAQ: CACH) today announced comparable store sales (sales for stores open at least one year or more) were flat during the five week March 2005 period, as compared to a 12% increase in March 2004. Total sales for the five week period ended April 2, 2005 increased $1.9 million or 7.3% to $28.0 million, as compared to the five week period ended April 3, 2004. Comparable store sales increased 1% during the 13 week period ended April 2, 2005, as compared to the same period in 2004. Total sales for the 13 week period increased $5.4 million or 9.4% to $62.9 million.

Brian Woolf, Cache Chairman, commented: "Our March sales results were below our expectations for a mid-single digit increase, which we originally expected due to the Easter shift to March this year versus April last year and positive momentum in our February sales. Sales gains did not materialize to the extent we expected, which we attribute mainly to consumers favoring casual woven and cut and sew tops versus our emphasis on sweaters. Denim sales exceeded expectations, as our customer has shifted to a more casual lifestyle."

Mr. Woolf continued: "March represents approximately 45% of our net sales for the first quarter. Given the sales shortfall coupled with increased promotional activity to maintain conservative inventory levels and a mix shift favoring lower margin dress sales, we have revised our first quarter expectations. Looking ahead, we expect our short lead times will enable us to capitalize on current fashion trends during the second quarter. However, we expect our sales and margins in April will be negatively impacted as we reallocate our assortments to that casual lifestyle, and we are therefore reducing our expectations for the second quarter."

Revised Outlook

The Company noted that it is revising its outlook for net sales and diluted earnings per share for the first and second quarter of fiscal 2005 and full year fiscal 2005. The Company currently estimates first quarter fiscal 2005 diluted earnings per share in the range of $0.10 to $0.11, as compared to its previous guidance range for diluted earnings per share of $0.21 to $0.23. This compares to actual first quarter fiscal 2004 diluted earnings of $0.20 per share. Net sales for the first quarter of fiscal 2005 were $62.9 million, as compared to our previous guidance range of $65.0 million to $67.0 million and actual first quarter fiscal 2004 net sales of $57.2 million.

The Company currently estimates second quarter fiscal 2005 diluted earnings per share in the range of $0.20 to $0.22. This compares to actual second quarter fiscal 2004 diluted earnings of $0.27 per share. Net sales for the second quarter of fiscal 2005 are currently estimated in the range of $65.0 million to $67.0 million, as compared to actual second quarter fiscal 2004 net sales of $62.1 million.

For fiscal 2005, the Company currently estimates net sales in the range of $270 million to $275 million, as compared to its previous range of $275 million to $280 million and versus actual fiscal 2004 net sales of $247.3 million. Fiscal 2005 diluted earnings per share are currently estimated in the range of $0.79 to $0.82, as compared to the Company's previous guidance range of $0.99 to $1.02 and fiscal 2004 actual diluted earnings per share of $0.83. The Company also noted its current guidance excludes the adoption of SFAS 123R, which requires the expensing of stock options and is expected to approximate $0.03 per share in fiscal 2005.

About Cache, Inc.

Cache is a nationwide, mall-based specialty retailer of sophisticated, social occasion sportswear and dresses targeting style-conscious women. We own and operate two separate store concepts, Cache and Lillie Rubin, each of which carries its own distinctive branded merchandise. Cache targets women between the ages of 25 and 45 who have a youthful attitude, are self-confident and fashion-conscious, and require a missy fit. Lillie Rubin stores offer a more sophisticated line of social occasion apparel targeting women between the ages of 35 and 55. We operate 257 Cache and 37 Lillie Rubin stores primarily situated in central locations in high traffic, upscale malls in 43 states and Puerto Rico.

Safe Harbor

Certain matters discussed within this press release may constitute forward-looking statements within the meaning of the federal securities laws. Although Cache, Inc. believes the statements are based on reasonable assumptions, there can be no assurance that these expectations will be attained. Actual results and timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation, industry trends, merchandise and fashion trends, competition, changes in general economic conditions and consumer spending patterns, vendor procurement issues and the ability to obtain financing, as well as other risks outlined from time to time in the filings of Cache, Inc., with the Securities and Exchange Commission.