Although the January increase is modest in comparison to the 44.8 percent pickup registered in January 2001, it helped elevate overall sales 26.8 percent, to $28.9 million, for the four-week period ended Feb. 2. In the five weeks ended last February, sales were $22.8 million. Chico’s last comp decline came in February 1997.
Calling it “a good month,” Chico’s chief financial officer credited a positive reaction to its most recent catalog as contributing to the strong results. A new television ad will be rolled out later this month and run through the first week of March. About 60 percent of air time will be in national markets this year as compared to 40 percent last year.
While Chico’s numbers clearly scored a touchdown in a difficult retail environment, the rest of the industry is expected to report same-store sales results Thursday and analysts said they anticipate retail sales for January, which is known more for its clearance activity than for full-price selling, to come in at or below their conservative plans. The Salomon Smith Barney softlines same-store sales index projects comps to fall 4 to 6 percent in January, compared with down 1.7 percent last year.
January started slowly for Chico’s, as comps were down 1 percent in the first week, but quickly picked up. Comps were up in the high-teens during week two, the mid-40s in week three and in the mid-20s during week four. The company dropped its new February catalog during week three last month, versus week four last year. The call center, which constitutes sales from its Web site and catalog, recorded sales of $800,000 compared with $290,000 last year.
Marvin Gralnick, Chico’s chairman and chief executive officer, said in a statement: “The 17.9 percent same-store sales increase for the fourth quarter follows same-store increases of 32 percent, 27 percent, 39 percent and 20 percent for the last four years, respectively. This increase in sales was accomplished with improved gross margins this fourth quarter versus last year’s fourth quarter.”
Based on this performance, Wells Fargo securities analyst Jennifer Black raised her 2002 earning estimates by a penny to 98 cents. The firm said it plans to release fourth-quarter results March 5.
Chico’s shares hit a new 52-week high of $31.90 Tuesday and closed at $31.15, up $1.93, or 6.6 percent, in New York Stock Exchange trading.