Fort Myers, Fla. Chico's FAS Inc. on Tuesday reported a 44% drop in quarterly net profit on Tuesday and forecast weaker-than-expected results in the current quarter due to slumping sales.
Net profit in the third quarter, ended Nov.3, was $23.6 million compared with $42.1 million a year earlier. Net sales for the quarter rose 3.4% to $416 million, while same-store sales dropped 9.3%.
"We are greatly disappointed with our performance to date,” said Scott A. Edmonds, chairman, president and CEO, in a statement. “Numerous challenges continue to affect the entire retail sector. It now appears that based on our November sales performance, our fourth-quarter earnings could approach the break-even level."
Edmonds said the chain intends to end the season with clean inventory levels, and that it is aggressively moving to control many other expenditures, including capital expenditures, both present and for 2008.
“To that end, we are taking a more conservative approach to our fiscal 2008 growth and expansion plans than previously announced by reducing our square footage growth rate from 12%-15% to approximately 10%, which will reduce the number of stores we plan to open to approximately 60-65 net new stores,” Edmonds stated. “Expansions and relocations should come in at the low end of previous guidance, and we will continue to evaluate our 2009 growth and expansion plans as well."