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.