Specialty retailer Chico's FAS, Inc. (CHS) reported Wednesday a profit for the second quarter that increased 23 percent from last year, reflecting double-digit revenue growth and improved margins amid increased full-price selling and effective promotions.
Both earnings per share and quarterly revenues topped analysts' expectations. The company also marginally raised its revenue guidance for the full-year 2012.
This is the company's 14th consecutive quarter of double digit earnings per share growth, and 13th consecutive positive quarter for comps.
Net sales for the quarter increased 16.4 percent to $641.72 million from $551.45 million in the same quarter last year, and topped sixteen Wall Street analysts' consensus estimate of $641.34 million by a whisker.
The increase in sales reflect a consolidated comparable sales growth, a 7.4 percent increase in square footage and a $32.6 million sales contribution from the recently acquired Boston Proper. Consolidated comparable sales for the quarter increased 5.6 percent on top of a 12.8 percent rise last year, reflecting increases in both average dollar sale and transaction count.
The company completed the $205 million acquisition of direct-to-consumer retailer Boston Proper, Inc. in September 2011. Boston Proper will operate as a stand-alone division within Chico's FAS. The company expects Boston Proper to be accretive to earnings in the first full year of operations.
Net sales from Chico's/Soma Intimates rose to $415 million from $374 million in the prior-year quarter, and White House/Black Market net sales totaled $194 million, up from $177 million in the year-ago quarter.
Chico's/Soma Intimates comparable sales grew 7.2 percent, and White House/Black Market brands' comparable sales increased 2.3 percent.
The Fort Myers, Florida-based company reported net income of $53.40 million or $0.32 per share for the second quarter, higher than $43.39 million or $0.25 per share in the prior-year quarter. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the second quarter. Analysts' estimates typically exclude special items.
Operating margin for the quarter improved 90 basis points to 13.4 percent as gross margin expanded 30 basis points and a 60 basis points improvement in total selling, general and administrative expenses as a percentage of total sales.
Looking ahead to fiscal 2012, the company now expects net sales in a range of $2.55 billion to $2.6 billion, including comparable sales growth at a mid-single digit rate. Street is currently looking for full-year 2012 revenues of $2.58 billion.
Previously, the company assumed net sales between $2.5 billion to $2.6 billion, which included comparable store growth at a mid-single digit percent.
CHS closed Tuesday's regular trading session at a 52-week high of $17.08, up $0.50 on a volume of 6.32 million shares, sharply higher than the three-month average volume of 2.77 million shares.
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