Chico’s FAS sees sales drop 28%
Fort Myers, Florida-based fashion retailer Chico’s FAS, Inc. announced a year-over-year decline of 27.5% in its third-quarter revenues on Tuesday, as the Covid-19 pandemic continues to negatively affect the company’s in-store sales.
For the third quarter ended October 31, 2020, Chico’s FAS reported $351.4 million in net sales, down from $484.7 million in the prior-year period.
As well as the impact of the coronavirus crisis on the company’s brick-and-mortar revenues, this decrease also reflected the permanent closure of 63 of the retailer’s stores since the previous year’s third quarter.
These negative effects were partially offset by double-digit growth in digital sales, driven by a 67% increase in online revenues at the company’s Soma intimates brand.
Indeed, Soma was the only one of the retailer’s businesses to see sales growth in the quarter, posting a 4.7% increase in its revenues, which totaled $83.5 million. Quarterly sales at the company’s flagship Chico’s brand fell 34.5% to $163.8 million, while at White House Black Market, they decreased 32.9% to $104.0 million.
Overall, comparable sales at the retailer decreased 24.1%.
Nonetheless, Chico’s FAS president and CEO Molly Langenstein was keen to point out that the company’s sales had made progress when compared to the second quarter.
“We are pleased that we achieved another quarter of sequential performance improvement, with total sales increasing by 14.8%, driven by strong digital performance and a rebound in store sales,” she commented in a release.
The company’s net loss in the third quarter was $55.9 million, or $0.48 loss per diluted share, compared to a net loss of $8.1 million, or $0.07 loss per diluted share, in the prior-year period.
Year to date, sales at Chico’s FAS were $434.9 million, down 45.3% from $795.6 million. Net loss for the period came to $281.0 million, or $2.43 per diluted share, compared to a net loss of $8.4 million, or $0.07 per diluted share, in the first nine months of the previous fiscal year.
As it seeks to adapt and cut costs in reaction to the coronavirus crisis, Chico’s FAS has accelerated the development of its digital channel, streamlined its organizational structure and negotiated rent abatements and reductions with its landlords.
In August, the company’s Canadian subsidiary filed for bankruptcy, revealing that it would close all 10 of its stores in the country, a measure that Langenstein said is “part of the company’s ongoing cost-savings measures taken to mitigate the impact of the Covid-19 pandemic.”
In light of the ongoing uncertainty surrounding the health crisis, Chico’s FAS did not provide financial guidance for the fourth quarter or the full fiscal year.
The company currently operates 1,310 stores in the U.S. and also sells its merchandise through 68 international franchise locations in Mexico and two domestic franchise locations in airports.
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