Chico’s stock took off in early trading moving higher by 7 percent to $14.80 after the women’s apparel chain beat analyst estimates on second quarter earnings.
Chico’s reported earnings in the second quarter of 25 cents per share, a 25 percent increase over last year and easily beating the Zack’s estimate of 22 cents per share. Revenue of $680.4 million also beat the Zack’s estimate of $675 million and better than last year’s $671.1 million.
Chico’s also reported that it was selling the Boston Proper direct-to-consumer business and closing those stores. So far, this has cost Chico’s $16.2 million in restructuring charges.
Comparable sales at the flagship Chico’s was down 0.8 percent for the second quarter, but the drop was offset by Soma lingerie, which increased 5.7 percent and the White House/Black Market chain was flat. “Soma is the ace in the hole for us,” said chief executive officer David Dyer.
The company said the gaucho style of bottom was popular and that even stirrup pants were back. The new style of “Is it” was doing well. The company described that as “Is it a dress or a shirt?”
The company mentioned some new bra launches to come later in the year at Soma on the conference call.
Gross margin was improved at $366 million, up from $351.5 million, reflecting less promotional activity due to improved inventory management. The company repaid $26.5 million borrowed against the credit facility.