Specialty retailer Chico's FAS, Inc. (CHS) reported Wednesday a profit for the first quarter that increased from last year, reflecting double-digit revenue growth and the acquisition of Boston Proper.
Adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also raised its revenue guidance for the full-year 2012.
Net sales for the quarter increased 21.2 percent to $650.82 million from $537.16 million in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $630.64 million.
The increase in sales reflect a consolidated comparable sales growth, an 8 percent increase in square footage and a $33.7 million sales contribution from the recently acquired Boston Proper.
Consolidated comparable sales for the quarter increased 9.6 percent on top of a 7.7 percent rise last year, reflecting increases in both average dollar sale and transaction count. This is the 12th consecutive positive quarter for comps.
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 $425 million from $375 million in the prior-year quarter, and White House/Black Market net sales totaled $192 million, up from $162 million in the year-ago quarter.
Chico's/Soma Intimates comparable sales grew 8.8 percent, and White House/Black Market brands' comparable sales increased 11.3 percent.
The Fort Myers, Florida-based company reported net income of $53.6 million or $0.32 per share for the first quarter, higher than $45.9 million or $0.26 per share in the prior-year quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the first quarter. Analysts' estimates typically exclude special items.
Operating margin for the quarter contracted only 30 basis points to 13.3 percent as gross margin declined 90 basis points, partially offset by a 70 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, including Boston Proper, to grow in mid to high teens percentage rate to about $2.5 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 $2.53 billion.
Previously, the company assumed net sales growth at a mid teens percentage rate to nearly $2.5 billion, including Boston Proper contribution.
CHS closed Tuesday's regular trading session at $14.66, up $0.19 on a volume of 5.10 million shares, sharply higher than the three-month average volume of 2.77 million shares.
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