Chico's profit, sales and outlook disappoint

Chico's FAS gave a downbeat outlook amid first quarter earnings and sales that missed Wall Street estimates.



The women's apparel retailer reported net income of $33.6 million, or $0.26 per diluted share, in the period ended April 30, compared to net income of $31.1 million, or $0.23 per diluted share, in the year-ago period. Analysts had estimated earnings per share of 29 cents for the quarter.



Net sales fell 9.2% to $583.7 million, compared to $643.0 million in last year's first quarter. The decrease reflected a same-store sales decline of 8.7%, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 10% at Chico's and 9.7% at White House | Black Market, and rose 0.2% at Soma.



"In this challenging retail environment, we remain steadfast in executing against our strategic plan to increase profitable sales and long-term earnings," said Shelley Broader, CEO and president. "Our flexible and profitable operating model allowed us to drive improvement in our operating income rate and earnings per share compared to last year even though our comparable sales in the quarter were below our expectations."



Chico’s also updated its outlook for fiscal 2017. The company says that it expects to see comparable sales for the fiscal year decline in the mid-single digit percentage range.



As of April 29, 2017, Chico's operated 1,492 stores in the United States and Canada.