Women’s specialty retailer Chico’s FAS Inc. (CHS) reported a 61% dip in earnings for the third quarter due to lower net sales, a decline in transaction count, lower average dollar sale, and investments in marketing as well as contract termination and legal costs. The stock fell over 21% in the premarket session after its earnings and revenue missed analysts’ expectations.
Net income plunged 61.1% to $6.5 million and earnings dipped 61.5% to $0.05 per share. The results included a favorable tax benefit of about $4.9 million or $0.04 per share related to the tax act.
Net sales fell 6.1% to $499.9 million. Excluding the 1.6% impact of the Hurricanes from last year’s third quarter, sales decreased 7.7%, which primarily reflects a comparable sales decline of 6.8% as well as the impact of 43 net store closures since last year’s third quarter. The comparable sales decline was driven by a decrease in transaction count and lower average dollar sale.
Gross margin fell to 36.2% from 37% in the previous year quarter. The 80 basis point decline was primarily driven by an improvement in the maintained margin that was more than offset by costs related to the continued expansion of its omnichannel programs.
Looking ahead into the fourth quarter, the company anticipates a mid-teen decline in net sales, which includes the negative impact of the 53rd week of $29 million in fiscal 2017, and a high single-digit decline in consolidated comparable sales.
The company expects to see some immediate benefit from its Chico’s brand performance improvement actions in the fourth quarter. Given the timing of adjustments that are now being made, Chico’s FAS expects it to be spring of fiscal 2019 before meaningful improvement in the Chico’s brand performance is visible in its results.
For full-year 2018, Chico’s FAS anticipates a high single-digit decline in net sales and a mid-single-digit decline in consolidated comparable sales. Capital expenditures are predicted to be $50 million to $60 million, primarily driven by store reinvestments and technology enhancements.
In a separate release, the company announced the departure of Diane Ellis, President of the Chico’s brand, effective November 30, 2018. Chico’s FAS has initiated a search to identify a new Chico’s brand President. In the interim, the Chico’s brand will be led by Shelley Broader, the company’s CEO and President.
Shares of Chico’s FAS ended Tuesday’s regular session up 0.14% at $7.32 on the NYSE. The stock has fallen over 17% in the year so far and over 13% in the past year.
Starbucks Corporation (NASDAQ: SBUX) reported first quarter 2023 earnings results today. Consolidated net revenues increased 8% year-over-year to $8.7 billion, in line with projections. Global comparable store sales increased
Alphabet Inc. (NASDAQ: GOOGL, GOOG) on Thursday reported a 1% increase in fourth-quarter 2022 revenues, with strong contributions from the cloud business. The company, which owns the largest internet search
Harley-Davidson, Inc. (NYSE: HOG) reported fourth quarter 2022 earnings results today. Revenue increased 12% year-over-year to $1.14 billion. Net income attributable to Harley-Davidson, Inc. rose 94% YoY to $42 million,