Sales grew by just 1.5 per cent in the thirteen weeks to November 1, 2004 period from a year ago quarter, at NYSE listed and omni-channel retailer of women's clothing, Chico's FAS.
For the third quarter of 2014, Chico’s reported net sales at $665.6 million, up 1.5 per cent as against $655.6 million in last year's third quarter.
The sales primarily reflect addition of 87 net new stores for a square footage increase of 5.4 per cent partially offset by a 1.6 per cent decrease in comparable sales.
The decline in comparable sales was following a 1.4 per cent fall in the quarter of the previous year and also reflected a drop in average dollar sales, partially offset by growth in transaction count.
Third quarter of 2014 net income of $26.5 million or earnings per diluted share of $0.17 was down from adjusted net income of $35.8 million or earnings per diluted share of $0.22 in last year's third quarter.
Chico’s said, last year, adjusted results for the third quarter excluded charges related to Boston Proper non-cash goodwill and trade name impairment.
Gross profit for the third quarter of 2014 totalled $363.8 million compared to $364.0 million in last year's third quarter.
Gross margin fell 80 basis points to 54.7 per cent from the prior year quarter, which Chico’s attributed to increased promotional activity to sell through seasonal merchandise.
For the third quarter of 2014, SG&A costs also rose to $321.6 million from $308.5 million in the same quarter of 2013, while SG&A was 48.3 per cent of sales, up 120 basis points from last year's third quarter.
According to the retailer, SG&A was higher from sales deleverage of store expenses and impact of around $5 million in incremental investment spending on strategic initiatives.
The effective tax rate for the reporting quarter was 37.4 per cent compared to an effective tax rate of 68.7 per cent in last year's third quarter.
At the end of the third quarter of 2014, total inventories per selling square foot increased 1.6 per cent, excluding in-transit inventories.
“In-transit inventories went up by $10.0 million, primarily reflecting an increase in the length of in-transit times for ocean shipments, as well as delays at West Coast ports,” it said.
CFO Todd Vogensen said, “We are making progress on the initiatives discussed at our analyst day to achieve our objectives and expect the benefits to become more visible over the coming quarters." (AR)
