NEW YORK — Scott Edmonds, president of Chico’s FAS Inc., has been promoted to the additional post of chief executive officer.
Edmonds retains the presidency of Chico’s, but the firm hasn’t yet determined whether he will relinquish the title of chief operating officer and, if so, to whom.
Marvin Gralnick, who cofounded the firm with his wife, Helene Gralnick, 20 years ago and who had served as ceo since then, will continue as chairman.
In a separate announcement Wednesday, Chico’s said August same-store sales surged ahead 19.4 percent. Sales for the month rose 42.6 percent to $56.3 million from $39.5 million.
The one-two punch of sales success and management succession lifted Chico’s shares $1.26, or 3.9 percent, to close at $33.57 in New York Stock Exchange trading Wednesday. Earlier in the day, they hit a new 52-week high of $33.94, beating the previous mark by 89 cents. The low-water mark for the past year is $14.
Edmonds began his career at Chico’s in September 1993 as operations manager. He became vice president, operations, in February 1994 and was promoted to senior vice president, operations, at the start of 1996. In February 2000, he became chief operating officer, and 19 months later added the title of president.
“Scott has been an invaluable resource to our company over the course of the last decade,” Marvin Gralnick said in a statement. “He has the vision, knowledge and the diverse skill set to be an excellent chief executive.”
Edmonds commented, “Chico’s has the potential to grow its business to be the overall specialty retail leader in the country. I look forward to working towards this goal with the exceptional and enthusiastic management team we have developed over the last several years.”
While just beginning its third decade, Chico’s growth has been rapid and its ascension highly profitable. In the year ended Feb. 1, net income rose 58.2 percent to $66.8 million and sales leaped 40.5 percent to $531.1 million. Comparable-store sales last year were up 13.5 percent, continuing a nearly unbroken progression of double-digit comp increases that continued last month.Jeffrey Klinefelter, analyst at US Bancorp Piper Jaffray, said in a research note that Edmonds’ promotion had been “widely expected as the [Gralnicks] prepare to retire early next year.”
The analyst raised his third-quarter earnings per share target to 25 cents from 23 cents. He also took up his full-year EPS estimate to $1.03 from $1.01. The share price target also was adjusted to $35 from $34.
Sanders Morris Harris raised its price target for Chico’s stock as well, lifting it $5 to $38. The firm said it believed that the stock has additional upside potential despite strong momentum over the past few weeks.
Among the small group of stores reporting August same-store sales on Wednesday, Hot Topic was up 11.8 percent, Aeropostale ahead 1.6 percent and Guess Inc.’s retail operations 14.5 percent above those of last August. However, American Eagle Outfitters saw comps drop 10.3 percent and Factory 2-U’s declined 4.8 percent.
In separate news, Cato Corp. said it would take a $2.8 million charge in the third quarter due to payments to be made to co-founders Wayland and Edgar Cato as part of their retirement agreements, which are effective Jan. 31, 2004.
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