Chico’s misses on Q2 sales and profit; taps beauty exec as Soma president
Chico's FAS' profit and revenue declined in the second quarter amid same-store declines across all its banners.
The women's apparel retailer also named Mary van Praag as president of Soma, effective September 5, 2017. She most recently served as CEO of Perricone MD. Prior to that, she held senior executive roles at Coty, and Johnson & Johnson's beauty division.
Chico's earnings declined to $22.72 million, or 18 cents per share, in the quarter ended July 30, from $23.04 million, or 17 cents per share in the year-earlier period. Analysts had estimated earnings of 20 cents per share.
Revenue declined 9% to $578.6 million from $635.7 million, compared with forecasts of $578.7 million. Total same-store sales fell 8.4%, driven by lower average dollar sale and a decline in transaction count. By brand, same-store sales fell 10.6% at Soma, 9% at Chico's and 1.8% at Soma.
“Second-quarter sales were disappointing, and we are taking decisive actions to adjust our assortments and enhance omnichannel capabilities in bellwether categories such as jackets at Chico's and dresses at White House | Black Market," stated Shelley Broader, CEO and president, Chico's FAS. "While it is early in the third quarter, these key categories are showing encouraging progress. Our leadership team also continues to be keenly focused on driving our strategic priorities to transform Chico's FAS, Inc. into a more nimble, efficient and innovative retailer that continues to drive strong free cash flow in the long term.”
At the end of the quarter, inventories totaled $235.2 million, compared to $235.6 million in the year-ago period. Inventories included a $16.9 million increase compared to the prior year due to a change in shipping terms with a supplier. Excluding the impact of the change in shipping terms, inventory decreased 7.4%.
As of July 29, 2017, the company operated 1,482 stores in the U.S. and Canada under the Chico's, White House | Black Market and Soma banners.
Ollie’s Bargain Outlets has a blowout quarter as it keeps on expanding
The deals at Ollie's Bargain Outlets were too good for shoppers to pass up in the retailer's second quarter, which topped analysts' expectations.
The value retailer, whose motto is "Good Stuff Cheap," said that its net income increased 50.1% to $19.7 million, or $0.30 per diluted share, in the quarter ended Aug. 29, from $13.1 million, or $0.21 per diluted share, in the year-ago period. Adjusted net income, increased 34.0% to $17.8 million, or $0.27 per diluted share, in the quarter.
"Strong deal flow, consistent margins and tight expense control all contributed to our exceptional earnings growth in the quarter," said Mark Butler, chairman, president and CEO. "Our business has never been stronger and we believe we are well positioned to continue delivering great bargains to our customers and long-term growth to our shareholders. Everyone loves a Bargain and that will never go out of style.”
Ollie's total net sales increased 20.5% to $254.6 million in the quarter, up from $211.3 million last year, helped by the addition of 11 new stores. Comparable store sales increased 4.5%.
Ollie's recently celebrated the 250th store opening and is now present in 20 states. The company has plenty of room for further expansion, commented Håkon Helgesen, analyst at GlobalData Retail, who said he was encouraged by the company's focus on penetrating new markets.
"The long-term goal of 950 shops looks feasible, although this will take many years to deliver," Helgesen said.
Ollie's expects full-year earnings in the range of $1.16 to $1.19 per share, with revenue estimated at $1.05 billion.
Women’s apparel retailer beats Street
J. Jill, which went public in March, reported earnings and sales that topped analysts estimates, but provided an outlook that slightly missed forecasts.
Net income totaled $11.9 million, or 28 cents a share, in the quarter ended July 29, up from $8.1 million, or 19 cents a share, in the year-ago period. Adjusted per-share earnings came to 29 cents, in line with estimates.
Total net sales increased 9.9% to $181.4 million, from $165.0 million in year-ago period, and topping estimates. Total same-store sales role 7.8%, also more than expected.
"Our second quarter performance demonstrated the continued strength of our omnichannel model and the disciplined, data-driven approach we take to our business," said Paula Bennett, president and CEO of J.Jill. "As we enter the back half of the year, we remain focused on delighting our customer with the product assortment and shopping experience she values while continuing to deliver consistent profitable growth.”
The company ended the second quarter fiscal 2017 with $28.7 million in cash and cash equivalents, compared to $13.5 million at the end of fiscal 2016. Inventory at the end of the second quarter fiscal 2017 decreased to $62.8 million compared to $66.6 million at the end of fiscal 2016.
For the third quarter, J. Jill expects adjusted EPS of 18 cents to 20 cents, compared with analysts' expectations of 20 cents. Same-store sales are expected to climb in the high single digits. For the full year, the company is expecting adjusted EPS of 81 cents to 85 cents, compared with a consensus of 84 cents
It opened two stores and closed four stores in the second quarter, giving it a total of 274 stores.