Skip navigation
Retail Traffic

Chico’s FAS posts record quarterly and end-of-year earnings

Chico’s FAS today reported a 72% increase in net fourth quarter income compared to the prior year. The Fort Myers, Fla.-based retailer — which sells designer women’s clothing and accessories to the baby boomer generation — attributed the strong numbers to its management team and healthy brand.

The chain’s fourth quarter net income rose to $9.8 million — a 72.1% increase compared to $5.7 million the prior year. For the fiscal year, its revenues rose 46% to a record $378 million, up from the prior year’s total of $249.4 million.

In a report released this morning, analysts with Credit Suisse First Boston Corp. issued a "Buy" rating for Chico’s FAS shares. The retailer’s general same-store sales target is a mid single-digit increase. But Credit Suisse First Boston expects an increase of between 14% and 16%.

The report credited Chico’s FAS with "solid execution, strong brand value and attractive positioning in an under-served niche" and cited the company's increased catalog circulation and new marketing push as reasons to be optimistic about future sales.

Growing despite the downturn

Chico’s, which operates a chain of 313 retail stores across the country, opened 61 new units during the fiscal year and increased its total selling square footage by 38%.

Chico’s also reported today that its February sales rose 36.9% to $33.2 million, up from $24.2 million in 2001. Meanwhile, comparable store sales for company-owned locations increased 10.7%.

CEO Marvin Gralnick attributed those numbers to "strong acceptance" of the chain’s new Spring assortment.

In January, Chico’s reported a 26.8% increase in overall sales and a 45.7% increase in annual sales. "Because of our higher-than-expected sales in January, we started February with somewhat lower inventory levels," Gralnick said. Nonetheless, the company was able to simultaneously post strong sales numbers and restore inventories to planned levels, he said.

Targeting the boomers

In a recent interview with SCW, CFO Charlie Kleman noted that Chico’s FAS has worked hard to carve out a niche for itself among baby boomers.

The company believes few apparel retailers have successfully targeted the baby boomer generation, the majority preferring instead to focus on Gen X and Gen Y consumers.Chico’s FAS began as a small store on Sanibel Island, Fla., in 1983. It locates most of its properties along street-fronts, in strip centers and in outdoor specialty centers. It does locate some stores in Class A regional malls -- it's top-performing location is at Simon's Phipps Plaza in Atlanta, for example.

The retailer recently completed a major roll out and plans to eventually be a 500- to 700-store chain.

Chico's plans to fuel that growth with a national media campaign this year. The company began buying regional TV ads for the first time in 2001. It has advertised in national magazines for two years.

-- Joel Groover

TAGS: Retail
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish