NEW YORK — A 34.6 percent jump in second-quarter revenues bolstered Chico's FAS Inc.'s bottom line, which rose 38.4 percent in the quarter.
The retailer said results were strengthened by demand for its White House|Black Market brand, which surpassed the company's projections from both a sales and gross margins basis.
In the 13 weeks ended July 30, net income rose 38.4 percent to $49.1 million, or 27 cents a share, matching analysts' estimates. Comparatively, the company earned $35.5 million, or 20 cents, in the year-earlier period. Total revenues increased to $342.9 million from $254.8 million a year ago.
By division, combined sales at Chico's and Soma by Chico's stores were up 26.9 percent at $271.5 million, while sales at White House|Black Market soared 88.7 percent to $61.9 million. Internet and catalogue sales increased 11.1 percent to $7 million, while net sales to franchisees increased 41.8 percent to $2.5 million.
In the Chico's brand, "initial markups improved over the same period last year, while higher-than-expected markdowns contributed to a lower gross margin for the brand, especially in the month of July," said Scott A. Edmonds, president and chief executive officer of Fort Myers, Fla.-based Chico's, on a conference call with analysts. "The decline in gross margin is attributed to weak performance in a few of our collections areas, specifically, linen collection and silk linen."
At White House|Black Market, however, sales "were consistently driven by knits, sweaters, woven bottoms, denim and dresses," Edmonds said on the call.
In the six months, Chico's reported net income of $96.3 million, or 53 cents a diluted share, versus $71.2 million, or 40 cents, a year ago. Per-share amounts in the quarter and full year have been adjusted following a 2-for-1 stock split that occurred in February. Total revenues in the six months were $670.2 million, up 31 percent from the prior year's $511.6 million.
Looking to the third quarter, Edmonds said August same-store sales are up in the "low double-digit range, with the Chico's brand in the high single-digits range and the White House|Black Market brand again experiencing much stronger same-store sales up in the mid-40 percent range."
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