July 23 (Reuters) - Women's apparel retailer Coldwater Creek Inc (CWTR.O) said it continue to expect a second-quarter loss but sees a sequential improvement in business trends, helped by positive customer response to its summer collection.

Coldwater Creek Summer 2009

"However, the strong sell through of our summer collection resulted in very lean inventory levels that limited our ability to drive sales during our quarterly sale event," Chief Executive Daniel Griesemer said in a statement.

The retailer said it expects inventory at the end of the second quarter to decline in the mid-single digit range per square foot.

The company now expects second-quarter loss of 5 cents to 7 cents per share, in line with its earlier estimate of a loss less than 8 cents per share.

Coldwater Creek, whose rivals include Anntaylor Stores Corp (ANN.N) and Chico's FAS Inc (CHS.N), said it expected net sales of $215 million to $220 million, down from $241.4 million it reported a year ago.

This reflects a same-store sales decline in the low double-digit range and a direct sales decline in the high teens to low 20s range, Coldwater Creek said.

Analysts on average were expecting a second-quarter loss of 2 cents per share, before items, on revenue of $225.8 million, according to Reuters estimates.

Shares of the Sandpoint, Idaho-based company, which shot up 97 percent in the last six months, were down 7 percent in trading before the bell. (Reporting by Vidya Lakshmi in Bangalore; Editing by Gopakumar Warrier)