Apparel maker and retailer Chico's FAS reported a 59% drop in fourth quarter earnings after the bell, largely due to heavy markdowns in merchandise and greater expenses. Sales increased almost 19% to $446.3 million in the Feb. 3-ended quarter. EPS was $0.10 after one-time items, which included a $0.03 a share tax expense resulting from the closing of its Fatigues brand operation; EPS was $0.24 in the year earlier period. Thomson Financial consensus estimates were for EPS of $0.13 on revenue of $443 million. Going forward, Chico's announced it will no longer provide specific quarterly or annual earnings outlooks. For FY2006, Chico's earned $166.6 million, good for EPS of $0.93, versus net income of $194 million (EPS of $1.06) in FY2005. Sales rose 17% to $1.65 billion. Thomson estimates were for EPS of $0.96 on sales of $1.64 billion. Chico's also reported Feb. sales figures yesterday: sales were up 15% versus the prior year February with same-store sales falling 4.3% on a comparable basis. Shares rose $1.00, or 4.9% to $21.42 in after hours action.
Sources: Press Release (i), (ii), TheStreet.com, Forbes, MarketWatch, Reuters, Women's Wear Daily
Commentary: Barron's Baby Boomer Stocks • Chico's Brand Maturing, Not Failing • Cramer's Take on CHS
Stocks/ETFs to watch: Chico's FAS (NYSE:CHS). Competitors: Gap (NYSE:GPS), Nordstrom (NYSE:JWN), J.C. Penney Company (NYSE:JCP), Federated Department Stores (FD), Talbots (NYSE:TLB). ETFs: Retail HOLDRs (NYSEARCA:RTH)
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