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Chico’s fiscal 1Q beats on profit, net sales but misses on same-store sales

For fiscal 2019, the Florida-based women's apparel retailer lowered its full-year guidance
Chico's has closed 41 stores since last year's first quarter

Chico’s FAS Inc (NYSE:CHS) on Tuesday reported fiscal first-quarter profit and net sales that beat estimates, but missed on same-store sales.

The women's apparel retailer said net income fell to $2.03 million, or $0.02 cents a share, from $29 million, or $0.23 cents a share, in the year-ago quarter.

Adjusted earnings were $0.05 cents a share, topping the Wall Street consensus of $0.03 cents a share.

READ: Chico's FAS shares slide after retailer closes stores and offers disappointing outlook

For the first quarter which ended May 4, net sales were $517.7 million, compared to $561.8 million in last year's quarter – a 7.8% decline. The consensus called for $517.6 million in net sales. 

Chico’s said the sales decrease reflects a comparable sales decline of 7% as well as the impact of 41 net store closures since last year's first quarter. The comparable sales decline was driven by lower average dollar sales and a decrease in transaction counts.

“Actions are now underway across all brands with a focus on three distinct areas that will positively impact our results,” said interim CEO Bonnie Brooks. “These include driving stronger sales through improved product and marketing; optimizing the customer journey by simplifying, digitizing and extending our unique and personalized service; and transforming our sourcing and supply chain operations to increase product speed to market and improve quality.”

For fiscal 2019, the Fort Myers, Florida-based company lowered its full-year guidance.

“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,” Chico’s said in a statement.

The company’s stock was down 6.7% to $3.19 a share in pre-market trading.

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