FORT MYERS, Fla. — Chico's FAS, the Fort Myers-based specialty women's retailer, announced a strong second quarter with profits rising to $59.3 million, marking an increase from $42 million the previous year.
The company's earnings per share stood at 49 cents, surpassing the previous year's 34 cents. Excluding one-time items, the profit was $33.7 million, or 28 cents per share. Despite total sales of $545 million, slightly below the previous year's $558.7 million, the results still exceeded analysts' expectations of 27 cents a share on a $554.9 million sales forecast, as per Zacks Consensus Estimate.
The reported drop in transactions for the quarter was counterbalanced by a rise in the average dollar sale. Molly Langenstein, Chico's FAS CEO, emphasized the company's continued robust performance, citing "meaningful cash flow" and a strong brand strategy. Chico's FAS saw robust sales across its three brands: Chico's, White House Black Market, and Soma.
Langenstein noted that customers at Chico's and White House Black Market have shown a preference for "head-to-toe dressing," and at Soma, the introduction of new strapless and unlined bras received positive reception.
Research from firm Circana revealed that Chico's and White House Black Market have continued to gain market share, particularly among affluent older adults.
In a subsequent conference call, Langenstein highlighted a net sales growth of 2.1% at Soma, with a slight decline for Chico's. The retailer faced a depleted inventory in the first quarter due to high demand, with Langenstein anticipating an adjustment as the fall season approaches.
Molly Langenstein, Chico's FAS, President and CEO
Langenstein stressed the company's focus on innovation, strategic marketing, and loyalty programs, leading to a growth in customer base. The company reported a strong operating income and a robust balance sheet, with cash and securities totaling $150.7 million and a debt of $24 million at the end of the quarter. Furthermore, a new share repurchase program for up to $100 million of its common stock was announced in the second quarter.
Revising its outlook, Chico's FAS now expects net sales to fall between $505 million and $525 million for the third quarter. For the year, projected earnings range from 87 to 95 cents a share on sales of $2.145 billion to $2.175 billion. David Oliver, Chico's CFO, voiced optimism for the remainder of the year, expecting improving trends for all brands.
Chico's FAS was previously recognized as the ninth-fastest-growing retailer in the U.S. by the National Retail Federation. Currently, the company operates 1,258 boutiques in the U.S., 58 international franchise locations in Mexico, two U.S. airport franchises, and its brand websites.