Chico’s FAS maintained its momentum in the third quarter, swinging to a surprise profit and reporting strong comparable sales across its three banners.
Net income totalled $18.2M, or $0.15 per share, for the quarter ended 30 October, compared to a loss of $55.9M, or $0.48 per share, in the year-ago period. Analysts were expected a loss of $0.3 per share.
Sales rose 29.1 per cent to $453.6M from $351.4M last year. Analysts had expected sales of $428M. Total comparable sales rose 27.9 per cent over a year ago. Sales were down 2.7 per cent compared to the third quarter of 2019.
By banner, Soma sales continued to surge over pre-pandemic levels. Comp sales at the intimates brand rose 30.2 per cent over last year — marking five consecutive quarters of comp sales growth — and rose 43.5 per cent over 2019. To continue driving the Soma business forward, Chico’s CEO Molly Langenstein said the company has invested in inventory, capital and staffing to position it “to capture additional market share and to become one of the largest intimate apparel brands in the US.
“The third quarter represents our best third-quarter earnings performance since 2016,” said Langenstein, who took the reins as CEO in June 2020. “We delivered robust year-over-year comparable sales growth across all three brands, produced our best third-quarter gross margin performance since 2014 and continued our disciplined expense management. This performance clearly demonstrates the extraordinary progress we are making against our turnaround plan. We have three unique brands, each with their own opportunities for expanding their customer bases, market share and sales.”
