Chico's FAS Updates Full-year Outlook - Quick Facts

(RTTNews) - Chico's FAS, Inc. (CHS) announced, for fiscal 2018, the company anticipates a high single-digit decline in net sales and a mid single-digit decline in consolidated comparable sales. The company expects gross margin rate as a percent of net sales to decline approximately 120 to 140 basis points over fiscal 2017. The company estimates a fiscal 2018 tax rate in the range of 20% to 25%.

For the fourth quarter, the company anticipates a mid-teen decline in net sales, and a high single-digit decline in consolidated comparable sales. The company anticipates gross margin rate as a percent of net sales to decline approximately 400 to 500 basis points.

For the third quarter, the company reported net income of $6.5 million, or $0.05 per share, compared to net income of $16.7 million, or $0.13 per share, last year. The company noted that its results for the thirteen weeks ended November 3, 2018 included a favorable tax benefit of approximately $4.9 million, or $0.04 per share, related to the Tax Act.

Third-quarter net sales were $499.9 million compared to $532.3 million in last year's third quarter, a decrease of 6.1%. Excluding the 1.6%, impact of the Hurricanes from last year's third quarter, sales decreased 7.7% in the third quarter, which primarily reflects a comparable sales decline of 6.8% as well as the impact of 43 net store closures since last year's third quarter. The company said the comparable sales decline was driven by a decrease in transaction count and lower average dollar sale.

For the third quarter, gross margin was $181.0 million, or 36.2% of net sales, compared to $196.7 million, or 37.0% of net sales, in last year's third quarter. The company said 80 basis point decrease was primarily driven by an improvement in maintained margin that was more than offset by costs related to the continued expansion of its omni-channel programs.

Shelley Broader, CEO, said: "Brand performance in the third quarter was mixed. Soma again performed well and better than expectations, and White House Black Market is continuing its brand repositioning. However, our Chico's brand did not deliver the sales we anticipated, which led to total company results that were below expectations."