Reuters: Global Markets: Chico's Q1 beats on robust sales, shares up

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Chico's Q1 beats on robust sales, shares up May 16th 2012, 13:01 Wed May 16, 2012 9:01am EDT (Reuters) - Women's apparel retailer Chico's FAS Inc (CHS.N) reported a rise in quarterly profit that surpassed Wall Street expectations as it continued to benefit from strong demand for its brands. Shares of the company, which owns brands like White House/Black Market, Soma Intimates and Boston Proper in addition to a namesake chain, rose about 8 percent to $15.77 before markets opened on Wednesday. Chico's first-quarter performance was powered by a 9.6 percent growth in same-store sales and an 8 percent increase in store area (square footage). The company has been boosting the store count of its chains, particularly Soma and White House/Black Market, both of which have seen robust growth in same-store sales and more full-price sales over the last one year. The retailer's sales rose about 21 percent in the first-quarter to $650.8 million, well ahead of the $629.5 million analysts had expected. Founded in 1983 as a small boutique selling Mexican folk art and cotton sweaters on Sanibel Island in Florida, Chico's has since expanded to sell clothing, accessories and gift items through more than 1,280 stores. Higher sales are usually driven by discounts and can come at the cost of margins, but the drop in margins at Chico's was less than what it had forecast. Gross margins fell 0.9 percentage points in the first quarter, less than 1.5 percentage point decline it had expected. Net income rose to $53.6 million, or 32 cents per share, from $45.9 million, or 26 cents per share, last year. Analysts on average had expected earnings of 30 cents per share, according to Thomson Reuters I/B/E/S. For fiscal 2012, the company expects sales of $2.50 to $2.60 billion, while analysts were expecting $2.53 billion. Gross margins are expected to decline about half a percentage point for the whole of this year, the company said. (Reporting by Ranjita Ganesan; Editing by Joyjeet Das, Sreejiraj Eluvangal) Link this Share this Digg this Email Reprints

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