Chico's FAS, Inc. Reports Second Quarter Results

Ms. Langenstein added, "The Company continues to focus on sales and financial initiatives to improve its operational position. Specifically:

• Our investments in and focus on our digital business are delivering positive results. Year-over-year, digital sales in the apparel group and intimates each grew double digits. Soma led the way with digital sales improving 70% in the second quarter over last year.
• COVID-19 presented a major challenge and we took the opportunity to reassort inventory to customer demand.
• We achieved a 37% year-over-year SG&A improvement by streamlining our organizational structure and aligning expenses with sales.
• We are performing a strategic real estate review and reevaluating each store's strategic value and profitability. We are evaluating options for stores not meeting elevated standards and taking action where warranted as evident by our recent exit of frontline stores in Canada.
• We are partnering with landlords and achieving rent relief in the form of rent reductions, abatements and other concessions to partially mitigate the impact of COVID-19 on our business.
• Our financial position and liquidity have been strengthened through accelerating online sales, store reopenings, an expense structure aligned with sales and reductions in capital spending.
• We continue to invest in and focus on innovation in technology, product and marketing."

Overview of Financial Results

During the thirteen and twenty-six weeks ended August 1, 2020, the Company experienced varying degrees of business disruptions and periods of store closures or reduced operating hours as a result of the COVID-19 pandemic (the "pandemic"). Throughout the first half of the fiscal year, the Company was able to navigate a rapidly changing retail landscape by leveraging its omni-channel capabilities and reopening most of its stores. Sales exceeded Company expectations across all brands during the back half of the second quarter. At quarter-end, approximately 96% of the store base were open to the public.

The Company recognized significant inventory write-offs and impairment charges as a result of the pandemic during the thirteen and twenty-six weeks ended August 1, 2020, however, the impact was partially mitigated by strong digital commerce performance and the Company's ongoing cost-saving measures.

The Company's cash flow for the twenty-six weeks ended August 1, 2020 also reflects the impact of the pandemic. We continued to take aggressive and prudent actions to drive sales, monetize inventory, reduce expenses and manage cash flows, including suspending or reducing rent payments, and partnering with suppliers and vendors to decrease operating costs and extend payment terms to enhance the Company's financial position. The Company believes it is well positioned to effectively navigate the pandemic business environment and remains confident that it currently has sufficient liquidity to repay its obligations as they become due for the foreseeable future. 

For the thirteen weeks ended August 1, 2020 (the "second quarter"), the Company reported:

• A net loss of $46.8 million, or $0.40 loss per diluted share, a material improvement over the thirteen weeks ended May 2, 2020 (the "first quarter"). The second quarter net loss includes the after-tax impact of inventory write-offs of $8.0 million, or $0.07 per share. For the thirteen weeks ended August 3, 2019 ("last year's second quarter"), the net loss was $2.3 million, or $0.02 loss per diluted share. Last year's second quarter net loss includes after-tax accelerated depreciation charges of $2.2 million, or $0.02 per share.
   
• Net sales were $306.2 million, an improvement of 9.2% from the first quarter, reflecting the benefit of strong digital sales and store reopenings. Sales decreased approximately 39.8% from last year's second quarter, reflecting disruptions related to the pandemic, including the continuation of temporary store closures and limited hours during the second quarter, as well as the impact of 74 net permanent store closures since last year's second quarter, partially offset by double-digit growth in digital performance.
   
• Gross margin was $44.8 million, or 14.6% of net sales, up more than 1,800 basis points from the first quarter. Gross margin in last year's second quarter was $168.6 million, or 33.2% of net sales. The second quarter year-over-year decrease in gross margin primarily reflects the impact of temporary store closures which resulted in deleverage of occupancy costs as a percent of net sales as well as a pre-tax inventory write-off of $12.3 million, or 4.0% of net sales. The inventory write-off was driven by the slower than planned cadence of store reopenings during the first half of the second quarter and less relevant work wear and special occasion product.
   
• Selling, general and administrative ("SG&A") expenses were $107.3 million, or 35.0% of net sales, compared to $171.0 million, or 33.7% of net sales, for last year's second quarter. The $63.7 million decrease in SG&A expenses reflects the Company's ongoing expense reduction initiatives to align its cost structure with sales.

For the twenty-six weeks ended August 1, 2020, the Company reported:

• A net loss of $225.1 million, or $1.95 loss per diluted share, compared to net loss of $0.3 million, or $0.00 per diluted share, for the twenty-six weeks ended August 3, 2019. The net loss for the twenty-six weeks ended August 1, 2020 includes the after-tax impact of goodwill impairment charges of $73.8 million, or $0.63 per share; impairments on other indefinite-lived intangible assets of $24.7 million, or $0.21 per share; inventory write-offs of $34.1 million, or $0.29 per share; long-lived store asset impairments of $13.9 million, or $0.12 per share; and impairment on right of use assets of $1.8 million, or $0.02 per share. These charges represent $189.5 million of the pre-tax net loss and $148.4 million of the after-tax loss, or $1.27 per share, for the twenty-six weeks ended August 1, 2020. The net loss for the twenty-six weeks ended August 3, 2019 includes after-tax accelerated depreciation charges of $5.7 million, or $0.05 per share.

Financial Results

Results for the thirteen and twenty-six weeks ended August 1, 2020 were significantly impacted by the pandemic and included after-tax charges totaling $8.0 million, or $0.07 per share, and $148.4 million, or $1.27 per share, respectively, as detailed in the tables below.

Summary of Significant Charges (1)
	Twenty-Six Weeks Ended
	August 1, 2020
	Amount, pre-tax (2)				% of Net Sales			Amount, after-tax				Per share impact
	(dollars in thousands, except per share amounts)
Gross margin:
Inventory write-offs	$	55,357			9.4	%		$	34,134			$	0.29
Long-lived store asset impairment	18,493				3.2			13,925				0.12
Right of use asset impairment	2,442				0.4			1,839				0.02
Total significant charges impacting gross margin	76,291				13.0			49,898				0.43
Goodwill and intangible impairment:
Goodwill impairment	80,414				13.7			73,837				0.63
Indefinite-lived asset impairment	32,766				5.6			24,673				0.21
Total goodwill and intangible impairment charges	113,180				19.3			98,510				0.84
Total significant charges	$	189,471			32.3	% Werbung Mehr Nachrichten zur Chico's FAS Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 13:35 - ARIVA.DE Redaktion TecDAX legt leicht zu: Heute 87 Punkte mehr (3.274 Pkt.) 11:21 - ARIVA.DE Redaktion Minimale Kursveränderung bei Allianz-Aktie (267,30 €) 02:00 - PR Newswire BlackRock Throgmorton Trust Plc - Total Voting Rights Der KI-Boom ist vorbei!    Aber dieser heiße Sektor verspricht, weiter zu wachsen... weiterlesen» Anzeige wo-site-teaser-box-16737_site-teaser-box_2024-04-23_09%253A00%253A00_2024-04-24_09%253A00%253A59