Fort Myers, FL–Chico’s FAS Inc. today reported a turnaround into third quarter profit after its year-ago quarter’s results were impacted by one-time charges. Earnings per share for the latest quarter matched analysts’ expectations, but revenues missed their estimates.
Net income was $26.46 million, or 17 cents a share, compared to net loss of $28.48 million, or 18 cents a share, last year. Excluding charges of $64.27 million ,or 40 cents a share related to Boston Proper non-cash goodwill and trade name impairment, adjusted net income for the year-ago quarter was $35.79 million or 22 cents a share.
On average, analysts expected the company to report earnings of 17 cents a share for the latest quarter.
New Stores Help Sales
Net sales for quarter rose 2% to $665.57 million from $655.58 million in the year-ago period. Analysts’ consensus was for $673.41 million in sales.
The sale increases primarily reflects 87 net new stores for a square footage increase of 5.4%, offset by a decrease in comparable sales, the company said.
Comparable store decreased 1.6% and follows a 1.4% decrease in the year-ago quarter. The decline in comparable sales reflected a decrease in average dollar sale partially offset by an increase in transaction count.
Gross margin declined 80 basis points from last year to 54.7%, primarily reflecting increased promotional activity to sell through seasonal merchandise.
Selling, general, and administrative costs increased 120 basis points to 48.3% of net sales, reflecting sales deleverage of store expenses, and the impact of about $5 million in investment spending on strategic initiatives and cycling the reversal of incentive compensation in fiscal 2013.
Chico’s operates 1,557 women’s boutiques and related websites under the brands Chico’s, White House/Black Market, Soma Intimates and Boston Proper.