Chico's FAS narrows fourth-quarter loss; comps up 2%
Fort Myers, Florida-based women’s fashion retailer Chico’s FAS, Inc. managed a significant cut in its losses in Q4, as its Soma lingerie brand continued to lead sales growth and the company made further progress with its strategic initiatives.
For the fourth quarter ended February 1, 2020, Chico’s FAS reported a net loss of $4.3 million, or $0.04 per diluted share, compared to a net loss of $16.6 million, or $0.14 loss per diluted share, in the prior-year period.
The company’s net sales for the quarter totaled $527.1 million, up 0.4% from $524.7 million in Q4 2018. This increase reflected a comparable sales rise of 2.2%, which was partially offset by the impact of 77 net store closures since the same period in the previous year.
Continuing a recent trend at Chico’s FAS, the Soma brand led sales growth with a 9.4% rise in comps, while the company’s namesake Chico’s brand saw a 0.9% increase, and White House Black Market managed a 0.1% rise.
“We are extremely pleased with the significant sequential turnaround in our business, resulting in our first quarter of positive comparable sales for all three brands since the fourth quarter of 2014,” commented Chico’s FAS CEO and president Bonnie Brooks in a release. “We are especially pleased with both our significant digital growth and frontline growth, as we continue to work towards delivering our unique and personal service through all channels of the company.”
For the full fiscal year 2019, the company’s net sales were $2.0 billion, decreasing 4.4% from $2.1 billion in the previous year, while comps declined 3.4%. Annual net loss was $12.8 million, or $0.11 per diluted share, compared to a net income of $35.6 million, or $0.28 earnings per diluted share, in 2018.
Looking forward, Chico’s FAS expects net sales to increase in the low single digits in both the first quarter and full year 2020.
Gross margin as a percentage of net sales is predicted to increase between 20 and 40 basis points in the first quarter, and between 50 and 100 basis points in the full year.
This outlook currently excludes the potential negative impact of the ongoing coronavirus outbreak, which, the company explained, is likely to effect on its manufacturing operations and supply chain in China.
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