Chico’s is targeting total revenues of at least $2.5 billion by 2025.
Chico’s FAS is confident that its turnaround strategy has taken hold.
The women’s apparel, accessories and lingerie retailer on Friday released financial targets it expects to reach by fiscal 2024 (fiscal year ending February 1, 2025). These include total revenues in excess of $2.5 billion, and digital revenues in excess of $1.0 billion (included in the $2.5 billion).
Other targets include:
Gross margin rate of 40%, equating to 330 basis points of expansion from fiscal 2021;
Operating margin of 7.5%, a 380-basis point improvement from fiscal 2021;
Earnings per share growth representing a CAGR of 15+% from fiscal 2021; and
Generation of approximately $400 million of cumulative cash flow from operations in the next three years.
Chico’s reported net sales for fiscal 2021 of $1.809 billion, up from $1. 324 billion in fiscal 2020.
"We have aggressively pursued our turnaround strategy which began in 2019,” said Molly Langenstein, CEO and president, Chico's FAS. “Today, we are well ahead of our plan and positioned to build on our momentum and further accelerate our growth. We have three powerful brands – Chico's, White House Black Marketand Soma– each growing faster than the market average and with tremendous future market share opportunities. Our unique brands, paired with our proven business model, experienced leadership team, values-centered culture and strong balance sheet are a winning formula for driving long-term shareholder value."
Langenstein added that the retailer has been guided by “four clearly-defined strategic pillars since our turnaround began in 2019.” These include a focus on community engagement, creating exceptional experiences, and increasing customer lifetime value. The other pillars are:
Product-obsessed, delivering distinctive, premium, best-in-class items that provide solutions for our customers;
Digital-first, strengthening our core platform, modernizing our merchandise and store systems, and elevating our data-driven insights; and
Operationally excellent, focused on expense, inventory, supply chain, and real estate management.
Chico’s also affirmed its previously announced outlook for the fiscal 2022 first quarter and full year. The company expects first-quarter consolidated net sales of $485 million to $500 million and earnings per share of $0.07 to $0.11.
For the full fiscal 2022 full year, Chico’s expects consolidated net sales of $2.085 billion to $2.115 billion and earnings per share of $0.40 to $0.50. It also expects capital and cloud-based expenditures of approximately $65 million to $70 million.
As of January 29, 2022, the company operated 1,266 stores under its banners in the U.S. and sold merchandise through 59 international franchise locations in Mexico and two domestic franchise airport locations.