Fort Myers, Fla. Chico's FAS Inc. said Tuesday its third-quarter profit plunged as a weak economy hurt sales. The company earned $2 million down from $23.6 million in the year-ago quarter. The results reflected the harsh environment that apparel retailers face going into the holiday selling season.
Sales fell 5% to $394.2 million from $415.9 million. Same-store sales declined 13.4% across the company, with a 17% drop at Chico's namesake brand and a 5% drop at its White House | Black Market stores.
“We believe our third-quarter operating results are reflective of the poor economy and consumers declining confidence," chief executive Scott Edmonds said in a statement.
He said the company remains focused on conserving cash by reducing costs. During the third quarter Chico’s opened 13 new stores and closed five stores, while expanding or relocating six stores. During the fourth quarter, Chico's expects to close between five and seven stores, while expanding or relocating between one and three stores.
In other news, Chico's said it signed a $55 million credit deal with SunTrust Bank.
The credit line is a $10 million boost from the company's prior agreement and has a $45 million accordion feature for debt capacity. The agreement will expire in Nov. 2011.
"Securing this new facility in these uncertain economic times is a testament to our financial strength," Edmonds said.
The company's balance sheet includes $256 million in cash and marketable securities and no debt, he said. Chico’s has no plans to draw on the new credit line.