Chicos FAS (CHS) Misses Q3 EPS by 32c

Chicos FAS (NYSE: CHS) reported Q3 EPS of ($0.48), $0.32 worse than the analyst estimate of ($0.16).

• Sales grew 14.8% and gross margin expanded 740 basis points from second quarter
• Soma's 67% digital sales increase led Company's year-over-year double-digit digital sales growth for the quarter
• Significantly enhanced financial liquidity and flexibility with amended and extended $300 million credit facility; ended quarter with $145.2 million in cash and cash equivalents
• Achieved $65.0 million in rent abatement and reduction commitments as part of comprehensive lease portfolio review

Molly Langenstein, Chief Executive Officer and President, Chico's FAS said: "Eighteen months ago, we prioritized digital as the primary growth engine for all three of our brands, making major strategic shifts and investments to pivot us to a digital-first company. In March of this year, as our business became 100% digital overnight, we accelerated that transformation through innovation and state-of-the art technology enhancements. Even with our stores now reopened, we continue to generate year-over-year double-digit digital sales increases. As a digital-first company, we believe we are competitively positioned to accelerate growth and gain market share in 2021 and beyond."

"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, and gross margin rate rising more than 700 basis points," Langenstein added.

Langenstein also noted, "During the third quarter, we significantly enhanced our financial liquidity and flexibility with the $300 million credit facility and commitments for $65 million in rent abatements and reductions. We are also on track to realize SG&A expense savings of 23% compared to our original plan for the year. All of these actions have created a solid financial foundation for Chico's FAS that we believe has positioned us to emerge a stronger company. I remain optimistic about the future of Chico's FAS."

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

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