Chico’s reports record Q2 earnings per share; revenue up 18%

Chico’s reports record Q2 earnings per share; revenue up 18%

Chico's FAS reported a strong second quarter and raised its full-year outlook at a time when many  retailers are doing the opposite.

The women’s apparel and intimates retailer posted net income of $42 million, or $0.34   per share, for the quarter ended July 30, compared to income of $26.2 million, or $0.21 per share, in the year-earlier period. The company said its performance — its highest-ever second quarter net income per share — was driven by strong comparable sales growth and meaningful gross margin expansion.

Net sales grew 18.4%, and comparable sales increased 19.5%, fueled by an increase in transaction count and higher average dollar sale.

By brand, comp sales at  Chico's and White House Black Market grew 29.7% and 31.9%, respectively.

Comp sales at Soma fell 9%, which the retailer credited largely to the continued slowdown of the lounge and cozy categories.It noted that Soma comparable sales have grown nearly 24% compared to 2019, “demonstrating the overall strength and long-term power of the brand.”

Year-over-year, Chico’s said it “significantly”  reduced promotional activity and achieved more full-priced sales, higher average unit retail and better productivity for all three brands.

"Our strong performance and continued momentum show that our strategy is working," stated Chico’s CEO Molly Langenstein. "We are a customer-led, product-obsessed, digital-first, operationally-excellent company with a compelling portfolio of three unique brands, each with their own market share opportunities. Six months into our three-year strategic growth plan, we are pleased with the considerable progress to date and are confident in our ability to achieve our long-term goals."

In March, Chico’s said it expects to reach total revenues in excess of $2.5 billion, and digital revenues in excess of $1.0 billion (included in the $2.5 billion) by fiscal 2024 (fiscal year ending February 1, 2025).

During the second quarter, Chico's FAS launched its new loyalty programs at Chico's and White House Black Market.  Customer sentiment and redemption rates are exceeding expectations, the company said, and the newly-launched programs are increasing shopper frequency.

For the full-year, Chico’s expects consolidated net sales of between $2.14 billion and $2.17 billion,up from its previous guidance of between $2.13 billion   and $2.16 billion.

It expects earnings per share of between $0.79 and $0.87, up from its previous estimate of between $0.64 and $0.74.

As of July 30, 2022, the retailer operated 1,258 stores in the U.S. and sold merchandise through 58 international franchise locations in Mexico and two domestic franchise airport locations.