Further, the mix effect of the WH|BM and Soma stores becoming a larger portion of the Company's store base also put slight pressure on SG&A as a percentage of sales as both brands operate with higher store operating costs as a percentage of sales than the Chico's brand.
Store operating expenses as a percentage of sales in the second quarter increased by approximately 480 basis points compared to the prior period primarily due to increased occupancy costs accompanied by increased personnel costs as selling payroll did not flex in direct proportion to the decrease in comparable store sales.
The increase was also impacted by the deleverage associated with the Company's negative same store sales, and to a lesser extent, the mix effect of the WH|BM and Soma Intimates stores becoming a larger portion of the Company's store base.
Marketing costs as a percentage of sales for the fiscal 2008 second quarter increased by approximately 70 basis points due mainly to the deleverage associated with the Company's negative same store sales and slightly increased marketing costs for the Chico's brand.
Shared services expenses (including headquarters and other non-brand specific expenses) for the fiscal 2008 second quarter increased 2.9% to $28.7 million from $27.9 million in the prior year's second quarter due primarily to increased information technology costs.
Commenting on the operating results for the second quarter, Scott A. Edmonds, Chairman, President, and CEO said, "Our disappointing earnings results for the second quarter of fiscal 2008 were primarily the result of lower than anticipated sales and the higher merchandise markdowns required to drive sales and lower the Chico's brand inventory levels closer to current sales trends. Accordingly, we achieved a 13% per square foot reduction for the Chico's brand as we transitioned from the spring merchandising season to the fall merchandising season."
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
