Home / Knowledge / News / Apparel/Garments / Chico's sales fall, secures $55 mn senior revolving credit facility
Chico's sales fall, secures $55 mn senior revolving credit facility
26
Nov '08
Chico's FAS Inc announced its financial results for the fiscal 2008 third quarter and nine months ended November 1, 2008. Net sales for the third quarter ended November 1, 2008 decreased 5.2% to $394.2 million from $415.9 million for the fiscal 2007 third quarter ended November 3, 2007.

Net income for the fiscal 2008 third quarter was $2.0 million, or $0.01 per diluted share, compared to net income of $23.6 million, or $0.13 per diluted share, in the prior year's third quarter. As previously reported, comparable store sales decreased 13.4% for the thirteen-week period ended November 1, 2008, compared to the comparable thirteen-week period last year ended November 3, 2007, as same store sales decreased approximately 17% for the Chico's brand and approximately 5% for the WH|BM brand.

Net sales for the nine months ended November 1, 2008 decreased 7.4% to $1.209 billion from $1.305 billion for the prior year's nine months ended November 3, 2007. Net income for the nine months was $21.4 million, or $0.12 per diluted share, compared to $109.4 million, or $0.62 per diluted share, in the first nine months of the prior year. As previously reported, comparable store sales decreased 15.7% for the thirty-nine week period ended November 1, 2008, compared to the comparable thirty-nine week period last year ended November 3, 2007, as same store sales decreased approximately 19% for the Chico's brand and approximately 9% for the WH|BM brand.

Gross margin for the third quarter decreased 12.8% to $211.4 million from $242.5 million in the prior year's third quarter. Gross margin as a percentage of sales for the current quarter decreased 470 basis points to 53.6%, from 58.3% in the prior year's third quarter. Chico's brand merchandise margins in the third quarter decreased approximately 430 basis points compared to the prior year's third quarter primarily due to lower initial markups as well as higher markdowns in order to liquidate inventory and bring levels in line with the current sales trend. The gross margin percentage at the Chico's brand was also negatively impacted by continued investment in the Company's product development and merchandising functions, coupled with the deleverage of these costs attributable to the negative same store sales. These decreases in gross margin at the Chico's brand were further exacerbated by a 450 basis point decline in the brand merchandise margins at WH|BM, also due primarily to lower initial markups and higher markdowns, which resulted in overall Company gross margins deteriorating further due to the impact of the mix effect resulting from WH|BM sales becoming a larger portion of the Company's overall net sales.

Selling, general and administrative expenses ("SG&A") for the third quarter decreased 2.8% to $213.1 million from $219.2 million in the prior year's third quarter mainly due to the on-going cost reduction initiatives implemented by the Company. As a percentage of sales, SG&A in thethird quarter increased by approximately 130 basis points compared to the prior period primarily due to the deleverage associated with the Company's negative same store sales.


Must ReadView All

Textiles | On 23rd Jun 2017

Textile ministry organises training workshop on GST

The ministry of textiles had organised training workshop on GST which ...

Apparel/Garments | On 23rd Jun 2017

Uware Brands into licensing agreement with Polaroid

Uware Brands has entered into a licensing agreement with Polaroid for ...

Textiles | On 23rd Jun 2017

Ralph Lauren ex-president Tiger of Sweden's new CEO

Hans-Christian Meyer, former president of Ralph Lauren Corporation,...

Interviews View All

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Steve Cole
Xerium Technologies

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

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

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

news category


Related Categories:
June 2017

June 2017

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

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search