Soma continues to lead the way at Chico’s FAS as turnaround strategies kick in
Despite swinging to a loss and posting declining sales, Fort Myers, Florida-based womenswear retailer Chico’s FAS reported better than expected Q3 results on Wednesday, as solid growth at its Soma intimates brand continues.
For the third quarter ended November 2, 2019, Chico’s reported a net loss of $8.1 million, or $0.07 per diluted share, compared to a net income of $6.5 million, or $0.05 per diluted share in the prior-year period.
This decline was due in large part to a reduction in net sales, which decreased 3.0% to $484.7 million, down from $499.9 million in the previous year. In turn, this fall reflected a comparable sales decline of 2.2% as, well as the impact of 58 store closures carried out since the beginning of the year.
The company’s namesake brand saw a 3.6% decrease in comparable sales in the quarter, while the White House Black House label posted a decline of 5.7%. Soma, however, achieved a solid 11.3% increase, proving once more to be a bright spot among the company’s results.
Analysts had expected Chico’s to report an adjusted loss per share of $0.06 on revenue of $473.2 million.
“Our third quarter results demonstrate that we are gaining traction on our strategic priorities,” said Chico’s FAS Bonnie Brooks in a release. “Our customers are also responding to our brands' better product, stronger marketing and changes to store presentation. I firmly believe the company's turnaround is on the right track, and we have updated our full-year financial outlook to reflect the positive momentum of our business.”
Year to date, the company’s net loss came to $8.4 million, or a loss of $0.07 per diluted share, compared to net income of $52.3 million, or $0.41 per diluted share, in the same period in the previous year.
Sales at Chico’s FAS for the three-quarter period totaled $795.6 million, up from $847.2 million.
Looking forward, Chico’s revised up its full-year guidance in line with its better than expected results, and now expects to see a mid-single-digit decline in sales. In the fourth quarter, the company is currently predicting a low single-digit decline in total net sales, and consolidated comparable sales.
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