Chico’s Q1 sales, profits fall
On the heels of a disappointing first quarter, Chico’s FAS is betting on its partnerships with Amazon and QVC to help drive traffic and sales going forward.
Chico’s net income totaled $29.0 million, or 23 cents per share, in the period ended April 29, down from $33.6 million, or 26 cents per share, in the year-ago period. Analysts had expected earnings of 25 cents a share.
Sales totaled $561.8 million, down from $583.7 million last year, but better than expected. Same-store sales fell 5.9%, a bigger decline than expected. By brand, same-store sales were down 5.5% at Chico’s, 6.6% at White House Black Market and 5.8% at Soma.
“While we are pleased with the launch of our new sales-driving initiatives, first quarter customer traffic was challenging," said Shelley Broader, CEO and president. "We leveraged strong inventory management and targeted promotions, which resulted in an improvement in trends."
Chico’s announced several initiatives during the first quarter to increase brand awareness and drive sale, including that it will offer a select assortment of its namesake brand’s merchandise on Amazon. The company’s intimate apparel brand, Soma, debuted on QVC in early May.
In addition, Chico’s launched a partnership with ShopRunner, the free two-day shipping and seamless payment e-commerce network, with all three of the retailer’s brands available to ShopRunner's several million active members.
"We are seeing initial success with our recently-launched ShopRunner partnership and we look forward to the ramp up of our brand offerings on Amazon.com and QVC," Broader said. "Over the long-term, we expect these new channels will drive stronger customer traffic and sales. We remain confident in our future and our ability to deliver sustainable growth and value creation for shareholders."
Chico’s net income totaled $29.0 million, or 23 cents per share, in the period ended April 29, down from $33.6 million, or 26 cents per share, in the year-ago period. Analysts had expected earnings of 25 cents a share.
Sales totaled $561.8 million, down from $583.7 million last year, but better than expected. Same-store sales fell 5.9%, a bigger decline than expected. By brand, same-store sales were down 5.5% at Chico’s, 6.6% at White House Black Market and 5.8% at Soma.
“While we are pleased with the launch of our new sales-driving initiatives, first quarter customer traffic was challenging," said Shelley Broader, CEO and president. "We leveraged strong inventory management and targeted promotions, which resulted in an improvement in trends."
Chico’s announced several initiatives during the first quarter to increase brand awareness and drive sale, including that it will offer a select assortment of its namesake brand’s merchandise on Amazon. The company’s intimate apparel brand, Soma, debuted on QVC in early May.
In addition, Chico’s launched a partnership with ShopRunner, the free two-day shipping and seamless payment e-commerce network, with all three of the retailer’s brands available to ShopRunner's several million active members.
"We are seeing initial success with our recently-launched ShopRunner partnership and we look forward to the ramp up of our brand offerings on Amazon.com and QVC," Broader said. "Over the long-term, we expect these new channels will drive stronger customer traffic and sales. We remain confident in our future and our ability to deliver sustainable growth and value creation for shareholders."