Chico’s FAS, Inc. Reports First Quarter Results

Chico’s FAS, Inc. (NYSE: CHS) (the “Company”) today announced its financial results for the fiscal 2018 first quarter ended May 5, 2018.

For the thirteen weeks ended May 5, 2018 (the “first quarter”), the Company reported net income of $29.0 million, or $0.23 per diluted share, compared to net income of $33.6 million, or $0.26 per diluted share, for the thirteen weeks ended April 29, 2017 (“last year’s first quarter”).

“While we are pleased with the launch of our new sales-driving initiatives, first quarter customer traffic was challenging,” said Shelley Broader, CEO and President of the Company. “We leveraged strong inventory management and targeted promotions, which resulted in an improvement in trends.”

“We are seeing initial success with our recently-launched ShopRunner partnership and we look forward to the ramp up of our brand offerings on and QVC.” Ms. Broader continued, “Over the long-term, we expect these new channels will drive stronger customer traffic and sales. We remain confident in our future and our ability to deliver sustainable growth and value creation for shareholders.”

Business Highlights
The Company continues to make progress on its strategic initiative to build new channels of growth and increase brand awareness. During the first quarter of 2018:
•The Company announced its collaboration with, Inc. to offer a select assortment of Chico’s brand merchandise on
•Soma, the Company’s Intimate Apparel brand, debuted on the multi-platform retailer QVC on May 5th during the “AM Style” broadcast. The brand’s popular Vanishing collection sold out in minutes.
•The Company launched its partnership with ShopRunner, the free two-day shipping and seamless payment e-commerce network, at the end of March. All three of the Company’s brands, Chico’s, White House Black Market and Soma are available to ShopRunner’s several million active members.

Net Sales
For the first quarter, net sales were $561.8 million compared to $583.7 million in last year’s first quarter. This decrease of 3.8% primarily reflects a comparable sales decline of 5.9% and the impact of 41 net store closures since last year’s first quarter, partially offset by the favorable impact of the calendar shift due to the 53rd week in fiscal 2017. The comparable sales decline was primarily driven by lower transaction count.

Gross Margin
For the first quarter, gross margin was $226.9 million, or 40.4% of net sales, compared to $237.4 million, or 40.7% of net sales, in last year’s first quarter. This 30 basis point decrease primarily reflects the initial implementation costs and launch of a new expedited shipping program, partially offset by a 70 basis point improvement in maintained margin.
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