Chico’s Swings into Q4 Loss on Lower Sales

Spring style at Chico's

Spring style at Chico’s

Fort Myers, FL—Chico’s FAS Inc. today reported a swing into a fourth quarter loss as sales declined, promotional costs increased and traffic was down.

For the quarter ended Feb. 1, the women’s specialty retailers posted a loss of $300,000, or break even per share, compared with a profit of $31.5 million, or 19 cents a share, last year. (Results included a $6.2 million income tax charge related to the Boston Proper impairment charge from the previous quarter.) Adjusted earnings dropped to 4 cents a share much below the 15 cents a share analysts’ predicted.

Comp Sales Down

Net revenue declined 6.5% to $610.2 million, missing analysts’ estimates for $653.4 million in sales.

Comparable store sales fell 3.4%, “primarily as a result of the impact of a highly promotional environment in response to lower traffic.”

At its Chico’s/Soma Intimates brands’ comparable sales decreased 1.5% following a 2.3% increase in last year’s fourth quarter.

“The Chico’s brand experienced a low-single digit comparable sales decrease in the fourth quarter compared to flat comparable sales in last year’s fourth quarter and the Soma Intimates brand experienced a mid-single digit comparable sales increase in the fourth quarter compared to a double-digit increase in last year’s fourth quarter.”

Meanwhile, the White House|Black Market brand’s comparable sales decreased 6.6%, and Boston Proper net sales decreased $9.7 million, “primarily reflecting decreased customer demand.”

Gross margin slipped 250 basis points to 50.7%. Selling, general, and administrative costs increased to 410 basis points to 49.5% of net sales.

In other news, Chico’s FAS declined a quarterly dividend of 0.0075 a share payable on March 31 to shareholders as of March 17.

 

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com