Chico's Profit Declines

Chico's FAS Inc.'s first-quarter profit dropped 18% on restructuring charges and lower sales at existing locations.

The woman's retailer earlier this year unveiled plans to reduce apital spending, accelerate store closures and cut jobs after private-equity firm Sycamore Partners abandoned its attempt to take Chico's private.

But some industry watchers speculated the planned retirement of Chief Executive David Dyer, which was announced last week, might open the door to talks with potential suitors. Mr. Dyer plans to retire next spring and remain at the helm until a successor is named.

For the period ended March 31, Chico's reported a profit of $32.5 million, or 22 cents a share, down from year-earlier earnings of $39.9 million, or 26 cents a share.

Excluding $14.9 million in restructuring-related and impairment charges, earnings rose to 28 cents a share.

Revenue edged 1.7% higher to $693.3 million. But sales at stores open at least a year slipped 0.1% and reflected approximately flat average dollar sale and transaction count, Chico's said.

Analysts were looking for 28 cents in earnings per share and $712.9 million in revenue.

Chico's namesake brand, its biggest, posted a 1% decrease in sales. Sales in the White House, Black Market segment rose 3.4%, while sales in the Soma Intimates brand jumped 13%.

Gross margin expanded to 57.1% from 56.2%.

Expenses rose 2.9% to $328.2 million. The effect of lower promotional activity was partially offset by the impact of product delays stemming from West Coast port issues, the company said.

Shares in the company, up 3% this year, were inactive during premarket trading.

Write to Lisa Beilfuss at [e-mail]

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