US retailer Chico's FAS posts $540.9 mn sales in Q1 FY22

The company recorded gross margin of $216.6 million, or 40 per cent of net sales, compared to $126.8 million, or 32.7 per cent of net sales, in last year's first quarter. The 730-basis point improvement in gross margin rate primarily reflects higher average unit retail and full price sales combined with occupancy leverage that offset elevated raw material and freight costs, the company said in a press release.

"Fiscal 2022 is off to a   great start as reflected by a strong first quarter sales beat driven by continued digital and store growth, meaningful gross margin rate expansion and substantially better than anticipated operating income. We continue to leverage our proven business model and execute against our strategic pillars and we are seeing the benefits in our results,” Molly Langenstein, Chico's FAS chief executive officer and president, said.

"Customers continued to respond enthusiastically to product innovation and our myriad of product solutions across Chico's, White House Black Market and Soma. Apparel was the standout for the first quarter, as evidenced by 65 per cent year-over-year comparable sales growth at White House Black Market and 52 per cent year-over-year comparable sales growth at Chico's. Soma posted its highest first quarter sales in the brand's history with a nearly 38 per cent comparable sales increase over the first quarter of 2019. Across all three brands, we achieved higher average unit retail, better productivity and more full-priced sales than last year's first quarter,” Langenstein added.

"Our results and continued momentum demonstrate that our strategy is working," concluded Langenstein. "We are a customer-led, product-obsessed, digital-first, operationally-excellent company with three powerful brands and tremendous market share opportunities. After achieving a successful turnaround, our team is now focused on delivering our three-year growth plan, and we are pleased with the great progress underway."  

For the second quarter of fiscal 2022, the company expects consolidated net sales of $535 million to $550 million, gross margin rate as a per cent of net sales of 38.7 to 39.4 per cent and SG&A expenses as a per cent of net sales of 31.2 to 31.6 per cent.

Fibre2Fashion News Desk (RR)