Chico's reports Q4 net loss of 16.6 million dollars

For the thirteen weeks ended February 2, 2019, Chico’s FAS reported a net loss of 16.6 million dollars or 14 cents per share compared to net income of 28 million dollars or 22 cents per diluted share, for the fourteen weeks ended February 3, 2018, while adjusted net loss was 8.6 million dollars or 7 cents diluted loss per share compared to adjusted net income of 14.5 million dollars or 11 cents per diluted share. For the fifty-two weeks, the company reported net income of 35.6 million dollars or 28 cents per diluted share compared to 101 million dollars or 79 cents per diluted share, for the fifty-three weeks ended February 3, 2018, while adjusted net income totalled 38.8 million dollars or 31 cents per share compared to 92.7 million dollars or 72 cents per share.

"We achieved sequential improvement in comparable sales in all three brands in the fourth quarter, and with work continuing across the company, we believe we are better positioned heading into the new fiscal year. At our namesake Chico's brand, improvement actions are taking hold, and we expect that Karen, our new Chico's Brand President, will further advance these efforts. I am confident that all the actions underway will enable the company to compete, succeed and drive value creation," said Shelley Broader, CEO and President of the company in a statement.

Review of Chico’s Q4 and FY18 performance

For the fourth quarter, Chico’s net sales were 524.7 million dollars, decrease of 10.7 percent, which the company said, reflects the 29 million dollars benefit of the 53rd week in last year's fourth quarter, a comparable sales decline of 3.8 percent and a decrease in selling square footage in fiscal 2018. The comparable sales decline was driven by a decrease in transaction count and lower average dollar sale.

For fiscal 2018, net sales were down 6.6 percent to 2.1 billion dollars, driven by a comparable sales decline of 4.9 percent, the 29 million dollars benefit of the 53rd week in fiscal 2017 and a decrease in selling square footage in fiscal 2018.

Chico’s said that as previously announced, the company intends to close at least 250 stores in the U.S. over the next three years as part of its efforts to better capitalize on its omnichannel platform, reduce costs, improve profitability and return on invested capital. Under this plan, the company expects to close approximately 100 Chico's, 90 White House Black Market and 60 Soma locations over the next three years, with the majority of the closings occurring in years two and three. In fiscal 2019, the closures are expected to be approximately 60 to 80 stores across all brands and weighted to the second half of the fiscal year. The company added that these closings are expected to have minimal impact on sales and earnings in fiscal 2019.

Chico’s announces expectations for Q1 and FY19

For the fiscal 2019 first quarter, the company anticipates a mid to high-single-digit decline in total net sales and consolidated comparable sales compared to the fiscal 2018 first quarter, reflecting softer sales throughout the month of February and gross margin as a percent of net sales to decline approximately 300 to 400 basis points compared to the fiscal 2018 first quarter, due primarily to incremental costs associated with its omnichannel programs and deleverage of fixed costs from lower sales.

For full year fiscal 2019, the company anticipates a low-single-digit decline in total net sales and consolidated comparable sales compared to fiscal 2018 and gross margin as a percent of net sales to be approximately flat to down 50 basis points compared to fiscal 2018, due to incremental costs associated with its omnichannel programs.

Picture:Chico's media gallery