Shares of Chico’s FAS Inc. surged 7.6 percent Tuesday after it said second-quarter profits more than doubled on gains in both net sales and same-store sales, and projected more top-line growth ahead.
The Fort Myers, Fla.-based misses’ specialty retailer recorded net income of $14.9 million, or 8 cents a diluted share, in the three months ended Aug. 1. A year ago, the firm’s quarterly profits totaled $6.7 million, or 4 cents a share. Excluding impairment charges, its earnings per share equaled 10 cents, on par with the average estimate of analysts polled by Yahoo Finance.
Sales in the three months grew by 3.6 percent to $419.9 million from $405.2 million. Direct-to-consumer sales jumped 41.4 percent to $42.2 million in the quarter.
Comparable-store sales in the period gained 1.3 percent versus a 15.9 percent decline a year ago. Comps rose 0.4 percent at the Chico’s/Soma division and 3.7 percent at White House|Black Market.
On a conference call, David Dyer, president and chief executive officer, told analysts he expects positive comps to continue into the fall.
“We don’t give guidance for Q3, but let’s just say that the momentum from the second quarter has carried into fall, and we certainly are hopeful that we will continue positive comps for all brands,” Dyer said.
He added the accessories category is doing “extremely well” for the Chico’s brand and denim, jackets and activewear remained top performers.
Dyer, a former ceo of Lands’ End and Tommy Hilfiger Inc., had been on Chico’s board before succeeding Scott Edmonds as ceo in January.
Chico’s stock closed trading up 90 cents at $12.79.
In a research note, Sterne Agee analysts Margaret Whitfield and Jennifer Milan wrote that comps in the early portion of the third quarter should benefit from weak year-ago comparisons and noted the company has overhauled marketing efforts.
“September should provide added opportunity with comparisons to the start of the financial crisis,” they wrote. “TV ads began [Monday] after a three-year absence, with response online and at call centers termed ‘overwhelming.’”
Top-line gains were not the only factor in Chico’s improved profits. Gross margins increased 230 basis points in the quarter to 55 percent of sales.
Selling, general and administrative expenses increased by 0.7 percent on a dollar basis to $207 million, but as a percentage of sales, fell by 140 basis points to 49.3 percent.
For the first half of the year, Chico’s profits were up 51.4 percent to $29.4 million, or 17 cents a share, from $19.4 million, or 11 cents a share, a year ago.
Sales in the six months gained 1.9 percent to $830.6 million from $814.8 million in 2008.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast