Chicos FAS (CHS) Tops Q1 EPS by 2c, Offers Outlook

Chicos FAS (NYSE: CHS) reported Q1 EPS of $0.05, $0.02 better than the analyst estimate of $0.03. Revenue for the quarter came in at $517.7 million versus the consensus estimate of $518.3 million.

• total comps declined 7%

Fiscal 2019 Second Quarter and Full-Year Outlook

The Company is initiating outlook for the second quarter of fiscal 2019 and is updating its full year fiscal 2019 outlook from its previous outlook. The outlook for both the second quarter and fiscal year excludes expected net charges related to the Company's retail fleet optimization plan.

For the fiscal 2019 second quarter, compared to the fiscal 2018 second quarter:

• The Company anticipates a mid-single digit decline in total net sales and consolidated comparable sales, reflecting expected softer sales in its White House Black Market brand, which will continue through the second quarter. However, the Company expects that sales at the Chico's and Soma brands will improve in the second quarter compared to the first.
• The Company expects gross margin as a percent of net sales to decline approximately 200 to 250 basis points, due primarily to incremental costs associated with its omnichannel programs and deleverage of fixed costs from lower sales.
• SG&A expenses are expected to be approximately flat, reflecting ongoing cost management, offset by investments in Soma marketing.

For full year fiscal 2019, compared to full year fiscal 2018:

• The Company anticipates a low-to mid-single digit decline in total net sales and consolidated comparable sales, versus its previous guidance of a low-single digit decline in total net sales and consolidated comparable sales. The Company expects stronger sales trends across all brands in the second half of the year, as key initiatives gain traction.
• The Company expects gross margin as a percent of net sales to be down 50 to 100 basis points versus its previous guidance of approximately flat to down 50 basis points, due primarily to incremental costs associated with its omnichannel programs and deleverage of fixed costs from lower sales.
• The Company anticipates SG&A expenses to be down approximately $10 million, versus its previous guidance of approximately flat with fiscal 2018, reflecting ongoing cost management.
• The Company expects capital expenditures to be approximately $55 million, primarily driven by store reinvestments and technology enhancements.
• The Company estimates a fiscal 2019 tax rate in the range of 35% to 40% primarily as a result of an increase in tax expense related to the accounting for employee share-based awards.

For earnings history and earnings-related data on Chicos FAS (CHS) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Silexion Therapeutics (SLXN) Tops Q2 EPS by 793c
• Algorhythm Holdings (RIME) Tops Q2 EPS by 54c