Chico's misses on Q2 sales and profit; taps beauty exec as Soma president
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Chico's FAS' profit and revenue declined in the second quarter amid same-store declines across all its banners.
The women's apparel retailer also named Mary van Praag as president of Soma, effective September 5, 2017. She most recently served as CEO of Perricone MD. Prior to that, she held senior executive roles at Coty, and Johnson & Johnson's beauty division.
Chico's earnings declined to $22.72 million, or 18 cents per share, in the quarter ended July 30, from $23.04 million, or 17 cents per share in the year-earlier period. Analysts had estimated earnings of 20 cents per share.
Revenue declined 9% to $578.6 million from $635.7 million, compared with forecasts of $578.7 million. Total same-store sales fell 8.4%, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 10.6% at Soma, 9% at Chico's and 1.8% at Soma.
“Second-quarter sales were disappointing, and we are taking decisive actions to adjust our assortments and enhance omnichannel capabilities in bellwether categories such as jackets at Chico's and dresses at White House | Black Market," stated Shelley Broader, CEO and president, Chico's FAS. "While it is early in the third quarter, these key categories are showing encouraging progress. Our leadership team also continues to be keenly focused on driving our strategic priorities to transform Chico's FAS, Inc. into a more nimble, efficient and innovative retailer that continues to drive strong free cash flow in the long term.”
At the end of the quarter, inventories totaled $235.2 million, compared to $235.6 million in the year-ago period. Inventories included a $16.9 million increase compared to the prior year due to a change in shipping terms with a supplier. Excluding the impact of the change in shipping terms, inventory decreased 7.4%.
As of July 29, 2017, the company operated 1,482 stores in the U.S. and Canada under the Chico's, White House | Black Market and Soma banners.