Chico's FAS Shares Tank 8% On Poor Q4 Results - Update

(RTTNews) - Clothing retailer Chico's FAS Inc. (CHS), Thursday reported a swing to a fourth-quarter loss, as revenues declined due mainly to higher promotional costs and lower traffic. Fourth-quarter's results were also impacted by a income tax charge.

Adjusted earnings and revenues for the quarter fell short of Wall Street expectations, and dragged Chico's shares down eight percent in current trade on the New York Stock Exchange.

The Florida-based retailer posted a fourth-quarter loss of $0.3 million or break even per share, compared to a profit of $31.5 million and $0.19 per share last year.

The fourth quarter results included a $6.2 million income tax charge related to the Boston Proper non-cash goodwill impairment recorded in the previous quarter..

Adjusted earnings for the quarter dropped to $0.04 per share from $0.20 per share last year. Twenty-three analysts, on average, polled by Thomson Reuters expected earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Chico's, the owner of White House Black Market, Soma Intimates, and Boston Proper chains, said sales for fourth-quarter dropped 6.4 percent to $610.2 million from $651.9 million last year. Twenty-two analysts on consensus expected revenues of $653.4 million for the quarter.

Same-store sales, or sales from stores open for at least a year, decreased 3.4 percent compared to a 3.7 percent increase last year. The retail industry as a whole was affected by higher promotional costs during the holiday season and the severe winter that made shoppers stay at home.

Gross margin, or percentage of revenues left after deducting sales costs, slipped 250 basis points to 50.7 percent. Selling, general, and administrative costs increased to 410 basis points to 49.5 percent of net sales.

Chico's FAS also declared a quarterly dividend of $0.075 per share, payable on March 31 to shareholders as of March 17.

CHS is currently trading at $16.44, down $1.56 or 8.64%, on a volume of 5.6 million shares, which is above the three-month average volume.