* Second-quarter EPS $0.32 vs est $0.30
* Revenue up 16 pct to $641.7 mln
* Expects full-price selling to continue
* Shares rise as much as 9 pct
Aug 22 Chico's FAS Inc's second-quarter
results came in ahead of Wall Street as vibrant colors and
improved styles at the women apparel retailer's namesake and
White House/Black Market brands drove sales.
Gross margins in the quarter were 56.4 percent, up 30 basis
points from last year, reflecting increased full-price selling,
introduction of newer products and reduced promotions.
"In terms of pricing we still plan to have a very high
percentage of full price sales versus promotional," said Chief
Executive David Dyer, adding that the company was not planning
for big markdowns and clearances in future.
Retailers that cater to women over 30 such as Ann Inc
and Chico's have been revamping their merchandise to
drive higher store traffic in an attempt to appeal to a larger
Ann Inc, the parent of Ann Taylor and LOFT stores, recently
posted earnings above estimates for the eighth quarter in a row
driven by sales of affordable and bright colored clothes.
Last year Chico's neutral palette and soft colors didn't
fare well, pushing the company to return to its roots and
replenish its stock with color and pattern.
"We are clearly winning with color, print and pattern," an
executive said on the company's earnings conference call.
An increasing number of retailers are switching over to
colored offerings that go with the warm weather. Analysts
believe this is the next big thing for retailers.
Despite a competitive promotional environment Chico's sold
trend-right merchandise at full-prices, which also drove new
store performance. It expects the pace of new store growth to
ramp up in future.
The company raised the low end of its full-year net sales
forecast to $2.55 billion from $2.50 billion. It maintained the
top end of the outlook at $2.60 billion. Analysts on average
were expecting $2.58 billion, according to Thomson Reuters
For the quarter ended July 28, earnings rose to $53.4
million, or 32 cents, from $43.4 million, or 25 cents a year
Revenue increased 16 percent to $641.7 million.
Analysts on average had expected earnings of 30 cents on
revenue of $641.3 million.
Chico's shares were up 7 percent at $18.275 on Wednesday in
late morning trading on the New York Stock Exchange. They have
gained more than half their value this year.