Chico’s posts rise in Q1 net income to 33.6 mn dollars

For the thirteen weeks ended April 29, 2017, Chico’s reported net income of 33.6 million dollars or 0.26 dollar per diluted share compared to 31.1 million dollars or 0.23 dollar per diluted share, for the same period ended April 30, 2016. In last year's first quarter, the company reported adjusted net income of 33.4 million dollars or 0.25 dollar adjusted earnings per diluted share. The 2016 first quarter adjusted results excluded EPS net charges of 0.02 dollar related to restructuring and strategic charges.

Commenting on the first quarter trading, Shelley Broader, the company’s CEO and President, said in a media release, "In this challenging retail environment, we remain steadfast in executing against our strategic plan to increase profitable sales and long-term earnings. 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."

Review of the first quarter results

For the first quarter, net sales were 583.7 million dollars compared to 643 million dollars in last year's first quarter. This decrease of 9.2 percent, the company said, primarily reflects a decline in comparable sales of 8.7 percent, driven by lower average dollar sale and a decline in transaction count.

Gross margin was 237.4 million dollars or 40.7 percent of net sales compared to 262.3 million dollars or 40.8 percent of net sales, in last year's first quarter, a decrease of 10 basis points.

Expects mid-single digit percentage decline is FY17 comparable sales

For fiscal 2017, the company anticipates a mid single-digit percentage decline in comparable sales and gross margin as a percent of net sales to be flat to up to a 30 basis point increase for the year, with approximately flat SG&A leverage. Capital expenditure is expected to be 60 million dollars to 70 million dollars for the year.

Picture:Chico's website