Chico’s Q2 Profits Fall

Comparable-store sales in the quarter also fell for the period ended Aug. 3.

Chico’s FAS Inc. posted a decline in second-quarter profits.

For the three months ended Aug. 3, the company said net income fell 18.4 percent to $43.6 million, or 27 cents a diluted share, from $53.4 million, or 32 cents, a year ago. Sales inched up 1 percent to $649.5 million from $641.7 million, although comparable-store sales fell 2.6 percent. By operation, sales at Chico’s/Soma Intimates were essentially flat at $414.7 million versus $414.6 million a year ago. White House|Black Market saw a 5 percent gain to $205.1 million, while Boston Proper posted a 9 percent decline to $29.7 million.

The company said comps for its Chico’s/Soma Intimates brands sales fell 3.1 percent, while the White House|Black Market brand saw same-store sales fall 1.5 percent.

For the six months, net income fell 11.5 percent to $94.7 million, or 58 cents a diluted share, on a net sales gain of 2.1 percent to $1.32 billion.

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David F. Dyer, chief executive officer, told Wall Street analysts during a conference call: “Our second quarter performance fell short of our goals….Traffic was our issue with the first quarter due to unseasonably cool weather; traffic was also our issue in the second quarter. We were just not able to drive sufficient traffic to cycle against the record results from the second quarter of last year.”

Dyer explained that, by nameplate, the “Chico’s brand faced a significant challenge up against strong second-quarter comparable sales in 2012. In the end, Chico’s was not able to overcome the record spring 2012 results driven by color, print and pattern.”

White House|Black Market flowed too much color too frequently for the season, he said, adding that “we have returned to more normal color cadence and color palette in our fall assortment.”

At Boston Proper, “Sales were down about 9 percent for the quarter, and although better than the first quarter run rate, the second quarter’s performance was still not up to our expectations.”

Soma continues to perform well, Dyer said, stating “We saw continued momentum at Soma Intimates building upon the strength of its new stunning support bra, which helped us overcome the challenging traffic to drive midsingle-digit comparable-sales increases.”