Shares of Chico’s FAS Inc. were sent downward Wednesday, falling 7.1 percent after the company posted weaker-than-anticipated first-quarter earnings.
This story first appeared in the May 30, 2013 issue of WWD. Subscribe Today.
President and chief executive officer David F. Dyer reluctantly blamed mother nature for the weak results on a conference call with analysts.
“I was told by a boss early in my career that if you wanted a weather report, he would hire a weatherman, so I’ve always been reluctant to talk about the effects of weather on business,” Dyer said. “However, this past quarter I should have hired a weatherman. The unseasonably cool spring and the highly promotional environment resulted in weaker-than-anticipated performance.”
Net earnings for the quarter fell 4.7 percent to $51.1 million, or 31 cents a share, from $53.6 million, or 32 cents, a year earlier. Adjusted earnings per share, which factor out costs related to the Boston Proper acquisition, were flat at 32 cents, 4 cents off the 36 cents expected by analysts.
Shares of the company slipped $1.38 to $17.96 in Wall Street trading.
Chico’s sales for the three months ended May 4 gained 3.1 percent to $670.7 million from $650.8 million. Comparable-store sales were flat, which the company blamed on an unusually cool spring and tough comparisons with a comp jump of 9.6 percent a year earlier.
Gross margins fell 50 basis points to 57.7 percent.
Dyer said the company responded quickly to the sales softness and ended the quarter with clean inventories.
The Fort Myers, Fla.-based firm operates 1,397 stores under the Chico’s, White House|Black Market, Soma Intimates and Boston Proper nameplates.