Home / Knowledge / News / Apparel/Garments / Promotional activity hits Q2FY15 gross margin at Chico's
Promotional activity hits Q2FY15 gross margin at Chico's
29
Aug '14
Increased promotional activity led to gross margin as a percentage of sales slipping 240 basis points year-on-year at NYSE-listed and omni-channel retailer of women's garments - Chico's FAS, Inc in the second fiscal quarter ended August 2, 2014.

For the second quarter of 2014, gross margin reached 52.4% of net sales, a 240 basis point decline from second fiscal quarter of 2013, which Chico’s said primarily reflects increased promotional activity to sell through seasonal merchandise.

In the quarter under review, gross profit fell $351.5 million compared to $356.1 million in last year's second quarter.

For the thirteen weeks ended August 2, 2014 Chico’s reported net income of $30.1 million compared to net income of $43.6 million for the comparable fiscal quarter of 2013. Correspondingly, second quarter 2014 earnings per diluted share too fell to $0.20 from $0.27.

For the second quarter of 2014, net sales totalled $671.1 million, up 3.3% from $649.5 million from a year ago quarter, the gains primarily coming from, the retailer said, opening of 98 new stores.

Comparable sales grew more slowly by 0.3%, partially offset by a $4.4 million decrease in Boston Proper net sales and following a 2.6% decrease in last year's second quarter because of an increase in transaction count partially offset by a decrease in average dollar sale.

For the second quarter of 2014, Chico'sSoma Intimates brands' comparable sales increased 1.4%, following a 3.1% decrease in last year's second quarter. Chico's brand experienced an increase of slightly less than 1% from a mid-single digit decline in last year's second quarter.

Soma Intimates brand experienced a mid-single digit comparable sales increase in the second quarter of 2014, compared to a high-single digit increase in last year's second quarter, while White House Black Market brand's comparable sales fell 1.9% following a 1.5% decrease.

For the second quarter of 2014, selling, general and administrative expenses (SG&A) rose higher to $304.7 million versus $286.3 million in last year's second quarter and stood at 45.4% of net sales, a 140 basis point increase from last year's second quarter.

Chico’s attributed the rise in SG&A expenses to sales deleverage of store expenses, costs to support new store growth and the impact of approximately $5 million in incremental investment spending on strategic initiatives.

For the second quarter of 2014, effective tax rate was down to 35.5%, compared to an effective tax rate of 37.7% in last year's second quarter, because of favourable state tax settlements.

At the end of the second quarter of 2014, inventories per selling square foot, excluding in-transit inventories went up 2.5%, from a slightly higher average unit cost for inventories on hand and forward fabric commitments.

In-transit inventories at the end of the quarter under preview also increased by $11.2 million, due to an increase in the amount and timing of shipping via ocean, when compared to 2013, Chico’s explained.

Fibre2fashion News Desk - India

Must ReadView All

Courtesy: Alibaba

Apparel/Garments | On 21st Feb 2017

Alibaba announces retail partnership with Bailian Group

Chinese e-commerce giant Alibaba Group has made another move in its...

Textiles | On 21st Feb 2017

GST to reduce documentation for logistics firms: CBRE

The Goods and Services Tax (GST) is likely to result in a reduction...

Apparel/Garments | On 21st Feb 2017

Govt may free up retail FDI for domestic goods

Government may remove restrictions on retailers like Walmart and...

Interviews View All

Krishnanand Tripathi
Textrade International Ltd

We believe in vocational education for entry-level employees, offering...

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Poojaa Kumar Deepak
Zeven

Zeven's performance sports apparel is designed for the Indian body type,...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
February 2017

February 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search