US retailer Chico's FAS's sales improve 18.4% in Q2FY22

For the second quarter, gross margin was $231.5 million, or 41.4 per cent of net sales, compared to $181.5 million, or 38.4 per cent of net sales, in last year's second quarter. The 300 basis point improvement in gross margin rate primarily reflects higher average unit retail and full price sales combined with inbound freight and occupancy leverage, partially offset by higher raw material costs, the company said in a press release.

Chico's FAS posted $0.34 net income per diluted share for the second quarter, driven by strong comparable sales growth and meaningful gross margin expansion. This performance was 62 per cent over the thirteen weeks ended July 31, 2021 ("last year's second quarter") and the company's highest-ever second quarter net income per diluted share.

"Our strong momentum continues. We posted another quarter of outstanding operating income and our highest-ever second quarter EPS, driven by continued robust digital and store sales growth as well as significant year-over-year gross margin rate expansion. Our consistent performance is evidence of the power of our portfolio and the successful implementation of our strategic pillars,” Molly Langenstein, Chico's FAS chief executive officer and president, said.

"Apparel was again the standout performer for the quarter, with a 32 per cent comparable sales increase at White House Black Market, closely followed by a 30 per cent comparable sales gain at Chico's. Customers continued to respond in nearly every category to our elevated fashion and product. Soma posted a second quarter comparable sales decline of 9 per cent, largely impacted by the continued slowdown of the lounge and cozy categories, but Soma comparable sales have grown nearly 24 per cent compared to 2019, demonstrating the overall strength and long-term power of the brand. Year-over-year, we significantly reduced promotional activity and achieved more full-priced sales, higher average unit retail and better productivity for all three brands,” explained Langenstein.

"Our strong performance and continued momentum show that our strategy is working," concluded Langenstein. "We are a customer-led, product-obsessed, digital-first, operationally-excellent company with a compelling portfolio of three unique brands, each with their own market share opportunities. Six months into our three-year strategic growth plan, we are pleased with the considerable progress to date and are confident in our ability to achieve our long-term goals."

Fibre2Fashion News Desk (RR)