Chicos FAS (CHS) Tops Q2 EPS by 28c

Chicos FAS (NYSE: CHS) reported Q2 EPS of $0.21, $0.28 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $472.1 million versus the consensus estimate of $407.35 million.

"Our second quarter earnings performance was the best second quarter Chico's FAS has posted since 2013, and these results show the incredible progress we continue to make in our turnaround strategy, despite pandemic challenges. Our return to profitability in the quarter was driven by our strategic actions that grew sales, expanded gross margin, and diligently controlled our expenses," noted Molly Langenstein, Chico's FAS Chief Executive Officer and President.

Langenstein continued, "Our robust second quarter sales across all three brands were propelled by our meaningful enhancements in product and marketing, which continued to drive full-price selling, reduce markdowns and produce higher gross margin. Soma®, which posted a 53% sales increase over last year\'s second quarter, we believe is well positioned to become one of the largest intimate apparel brands in the U.S. Sales at both Chico's® and White House Black Market® were strong, with year-over-year second quarter growth of 59% and 48%, respectively. Customers enthusiastically responded to our elevated styling and quality in both apparel brands, which led to faster sell-through rates and higher inventory productivity. Strategically planned inventories, operating discipline and the ongoing benefit of our prior cost reductions further added to our return to profitable growth.

"We are a digital-first, customer-led company with a strong portfolio of three unique brands. We believe there are ample opportunities to further grow our customer bases, market share and sales in each of these amazing brands. We look forward to reporting our progress in the quarters ahead."

GUIDANCE:

For the fiscal 2021 third quarter compared to the fiscal 2020 third quarter, the Company currently expects:

• Consolidated year-over-year net sales improvement between 18% to 22%;
• Gross margin rate improvement of 13 to 15 percentage points over last fiscal year;
• SG&A as a percent of net sales to improve 500 to 600 basis points year-over-year; and
• Income tax rate of 34% to 35%.

For the fiscal 2021 full year compared to the fiscal 2020 full year, the Company currently expects:

• Consolidated year-over-year net sales improvement between 32% to 35%;
• Gross margin rate improvement of 20 to 22 percentage points over last fiscal year;
• SG&A as a percent of net sales to improve 500 to 600 basis points year-over-year; and
• Income tax rate of 34% to 35%.

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

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