Fort Myers, FL—Shares of Chico’s FAS hit a 52-week high today after the women’s specialty retailer posted stronger than expected second quarter earnings and sales increases.
For the quarter ended July 28, Chico’s reported a 23% increase in its net income to $53.4 million, or 32 cents a share, compared wit $43.4 million, or 25 cents, a year ago. The earnings edged past analysts’ average estimate by 2 cents.
Total revenue was up 16.4% to $641.7 million, barely outpacing analysts’ estimate for $641.3 million in sales. Comparable store sales climbed 5.6%.
The company said its comparable store sales store gains were attributed to the effectiveness of its marketing plans and a “positive customer response to the company’s merchandise offering and new product launches.”
The Chico’s/Soma Intimates brands comparable sales increased by 7.2%, while those at the White House | Black Market increased by 2.3%.
“Our unique trend right merchandise and innovative marketing drove significant achievements in the second quarter, including a double-digit increase in new customers, a higher penetration of full-price sales, and increases in both average dollar sales and transactions,” said David Dyer, president/ceo. “These results demonstrate superb team execution. We delivered another quarter of strong growth in 2012 against our toughest quarterly comparison from last year in a much more challenging economic environment.”
Gross margin as a percentage of sales grew by 30 points to 56.4% helped by tighter spending and improved sales driven by full-price selling and promotional activities.
Looking ahead, Chico’s forecast sales of $2.55 billion to $2.6 billion, which brackets the consensus of $2.58 billion. The retailer also forecasts selling, general and administrative expenses falling by 50 points.