Rough quarter for Chico's
Women's specialty apparel retailer Chico's FAS reported declines in sales and profit for its third quarter as hurricanes took a toll on earnings.
The company reported net income of $16.7 million, or $0.13 per diluted share, in the quarter ended Oct. 28, down from net income of $23.6 million, or $0.18 per diluted share, in the year-ago period. Results for the third quarter include the unfavorable impact of hurricanes Harvey, Irma and Maria of approximately $5.0 million after-tax, or $0.04 per diluted share. Chico's said the hurricanes resulted in reduced operating hours or the temporary closure of more than 300 stores, as well as a decline in direct-to-customer sales.
Net sales fell 10.8% to $532.3 million, from $596.9 million in last year's third quarter. This decrease reflects an 8.2% decline in same-store sales, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 14.1% at White House Black Market, 5.8% at Chico's and 1.7% Soma.
"Results this quarter were in line with our expectations, and we are pleased with the progress on our strategic initiatives to better address customer needs and transform our business," said Shelley Broader, CEO and president. "The company's performance shows that we are continuing to benefit from our organizational changes and our operating efficiency initiatives. We remain focused on driving top line growth and are making important improvements across our brands, including the expansion of special sizes, the broadening of omnichannel engagement and the creation of alternative sales channels to fuel growth."
As of October 28, 2017, Chico's operated 1,474 stores in the U.S. and Canada and sold merchandise through franchise locations in Mexico.
The company reported net income of $16.7 million, or $0.13 per diluted share, in the quarter ended Oct. 28, down from net income of $23.6 million, or $0.18 per diluted share, in the year-ago period. Results for the third quarter include the unfavorable impact of hurricanes Harvey, Irma and Maria of approximately $5.0 million after-tax, or $0.04 per diluted share. Chico's said the hurricanes resulted in reduced operating hours or the temporary closure of more than 300 stores, as well as a decline in direct-to-customer sales.
Net sales fell 10.8% to $532.3 million, from $596.9 million in last year's third quarter. This decrease reflects an 8.2% decline in same-store sales, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 14.1% at White House Black Market, 5.8% at Chico's and 1.7% Soma.
"Results this quarter were in line with our expectations, and we are pleased with the progress on our strategic initiatives to better address customer needs and transform our business," said Shelley Broader, CEO and president. "The company's performance shows that we are continuing to benefit from our organizational changes and our operating efficiency initiatives. We remain focused on driving top line growth and are making important improvements across our brands, including the expansion of special sizes, the broadening of omnichannel engagement and the creation of alternative sales channels to fuel growth."
As of October 28, 2017, Chico's operated 1,474 stores in the U.S. and Canada and sold merchandise through franchise locations in Mexico.