Chico’s Q1 profit drops 22% on higher costs

Fort Myers, Fla. – Higher costs reduced profits at Chico’s FAS Inc. during the first quarter of fiscal 2014 even as net sales grew. Chico’s reported net income of $39.88 million, a 22% year-over-year-drop from $51.12 million in the year-ago period.



Net sales for the quarter ended May 3, 2014, rose 2% to $681.6 million from $670.7 million, boosted by the opening of 99 new stores. Same-store sales fell 2.6%. By brand, same-store sales were down less than 0.1% at Chico’s namesake stores, and increased 0.4% at Soma Intimates. The White House|Black Market brand's comparable sales decreased 8.6%.



Higher selling, general and administrative expenses cut into net income, while heavy promotions partially caused by the impact of weather on store traffic reduced same-store sales.