Chico’s Stumbles on 44% Drop in Profits

Shares of Chico's FAS (CHS) plunged 12.5% Wednesday after the company announced a decline in profits and weak third-quarter sales figures after the bell Tuesday. For the quarter, the apparel retailer's net income was $23.6 million ($0.13/share) compared to $42.1 million ($0.24/share) a year ago. Excluding certain gains, the company earned $0.11/share, which was in line with analysts' estimates. Revenues increased 3.4% to $416 million, below analysts' forecasts of $421 million. "We are greatly disappointed with our performance to date. Numerous challenges continue to affect the entire retail sector. It now appears that based on our November sales performance, our fourth quarter earnings could approach the break even level," said CEO Scott Edmonds. Analysts had been expecting Chico's to earn $0.07/share in the fourth quarter. The company's November comparable store sales decreased 13.7% from last year.

Sources: Press release, RTT News
Competitors: TLB, M. ETFs: RTH, XRT
Earnings call transcript: Chico's FAS Inc. Q2 2007

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