Chico Reports Q4 Loss of $40.5 Million

Fort Myers, Fla. Chico’s FAS Inc. reported on Tuesday a loss of $40.5 million in the fourth quarter, but still managed to beat Wall Street expectations.

Analysts polled by Thomson Reuters expected a loss of $373.1 million for the period ended Jan. 31.

The $40.3 million quarterly loss compares with a loss of $20.5 million a year earlier.

Fourth-quarter total sales dropped 9% to $373.4 million from $409.3 million a year ago.

Fourth-quarter same-store sales fell 13%, with Chico's brand same-store sales down 17% and White House | Black Market same-store sales down 5%.

Under new management since January — former Tommy Hilfiger and Lands’ End president David Dyer replaced Scott Edmonds as CEO, and Cynthia Murray is now brand president for Chico’s — the company opened six new stores in the fourth quarter and closed 13 locations. The company also expanded/relocated two locations during the quarter.

For fiscal year 2008, Chico’s FAS posted a loss of $19.1 million, compared with a profit of $88.9 million in 2007.

Same-store sales fell 15.1% for the year. Chico's brand same-store sales dropped approximately 19%, while White House | Black Market same-store sales slid 8%.

Annual revenue declined to $1.58 billion, down 8% from $1.71 billion.

Chico's opened 62 new stores, closed 24 stores and expanded and/or relocated 32 stores in fiscal 2008.

In January, the company said it would eliminate 180 positions and may close up to 25 stores to cope with the economy's toll on retailers.

Positive news coming out of the organization included reports that net sales for the direct-to-consumer channel increased by 8.8%, from $20.5 million in last year's fourth quarter to $22.3 million in this year's fourth quarter. The company said the increase is due to higher sales across all three brands. The company also attributed increases to continued growth in customer acceptance of the offerings at the Soma and White House | Black Market brands, increased traffic in all of the direct-to-consumer channels and implementation of planned improvements in the Web site and call-center infrastructure.