US' Chico's FAS reports 14.3% YoY growth in net sales for Q3 FY22

With this year’s third quarter performance, Chico’s FAS has reported year-over-year (YoY) double-digit earnings growth in the seventh consecutive quarter, driven by strong comparable sales growth and selling, general, and administrative expenses leverage, the company said in a press release.

The company’s comparable sales increased 16.5 per cent in Q3 FY22 versus last year's third quarter, led by the apparel brands. Chico's and White House Black Market comparable sales grew 28.8 per cent and 17 per cent, respectively, in Q3 FY22 versus last year's third quarter.

Chico’s FAS reported income from operations of $31.6 million in the third quarter of fiscal 2022, or 6.1 per cent of net sales, compared to $22 million, or 4.9 per cent of net sales, in the corresponding period of last year.

For the third quarter of fiscal 2022, gross margin was $207.4 million, or 40 per cent of net sales, compared to $184.4 million, or 40.7 per cent of net sales, in last year's third quarter. The 70 basis point decrease in gross margin rate primarily reflects higher raw material costs, partially offset by freight costs, occupancy leverage, and higher average unit retail.

For Q3 FY22, selling, general, and administrative expense was $175.8 million, or 33.9 per cent of net sales, compared to $162.5 million, or 35.8 per cent of net sales, for last year's third quarter, primarily reflecting ongoing expense management and the impact of $3.9 million in pre-tax litigation settlement charges in last year's third quarter.

The company ended the third quarter of FY22 with $140.7 million in cash and marketable securities, after repaying $30 million of long-term debt during the quarter. At the end of the third quarter, inventories totalled $304.1 million compared to $277.7 million at the end of last year's third quarter.

For the fourth quarter of fiscal 2022, Chico’s FAS expects consolidated net sales of around $535–$555 million, gross margin rate as a per cent of net sales of 35.4–35.8 per cent, selling, general, and administrative expense as a per cent of net sales of 32.7–33.2 per cent, and earnings per diluted share of $0.07–$0.10.

For the fiscal 2022 full year, the company expects consolidated net sales of around $2,153– $2,173 million, gross margin rate as a per cent of net sales of 39.2–39.3 per cent, selling, general, and administrative expense as a per cent of net sales of 32.3–33.4 per cent, and earnings per diluted share of $0.80–$0.92.

Fibre2Fashion News Desk (DP)