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Chico’s posts loss in Q2, lowers full year outlook

By Prachi Singh

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Report

Chico’s FAS, Inc., for the thirteen weeks ended August 3, 2019 reported a net loss of 2.3 million dollars or 2 cents per diluted share compared to net income of 16.8 million dollars or 13 cents per diluted share, for the same period in 2018. The company said, adjusted net loss was 0.2 million dollars. For the twenty-six weeks, the company reported a net loss of 0.3 million dollars compared to net income of 45.8 million dollars or 36 cents per diluted share, for the same period last year, while adjusted net income was 5.4 million dollars or 5 cents per diluted share.

“This performance was driven by sequential improvement at Chico’s and continued strong comparable sales growth at Soma of 10.9 percent in the second quarter. At White House Black Market, the changes we made in product, marketing and in-store presentation are driving improved sales trends in August compared to our second quarter results. We expect these improvements to continue benefiting the brand throughout the fall and holiday seasons,” said Bonnie Brooks, CEO and President in a statement.

Chico’s lowers full year guidance

For the second quarter, net sales were 508.4 million dollars, a decrease of 6.7 percent reflecting a comparable sales decline of 6.1 percent as well as the impact of 53 net store closures since last year’s second quarter.

For the third quarter, Chico’s anticipates a low to mid-single-digit decline in total net sales and consolidated comparable sales. The Company expects gross margin as a percent of net sales to be down approximately 100 to 125 basis points as it clears through seasonal inventory.

For full year the company anticipates a mid-single digit decline in total net sales and consolidated comparable sales, versus its previous guidance of a low to mid-single-digit decline in total net sales and consolidated comparable sales. The Company expects gross margin as a percent of net sales to be down 150 to 200 basis points versus its previous guidance of down 50 to 100 basis points.

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Chico's
Soma
white house black market