Chico’s grows profits, Canada expansion planned for 2013
Specialty apparel retailer Chico’s reported strong fourth quarter results and announced plans to debut a new format and enter Canada in 2013.
The company said sales for the 14 week fourth quarter ended February 2, increased 14.5% to $652 million thanks to the inclusion of an extra week in the reporting period, a 3.7% same store sales increase and a net increase of 101 new stores that expanded selling space by 8.1%. The 3.7% comp increase is noteworthy because it came on top of an 8.7% comp increase during the fourth quarter the prior year.
The Chico's/Soma Intimates brands' comparable sales increased 2.3%, which followed a 5.5% increase in last year's fourth quarter. The White House/Black Market brand's comparable sales increased 6.3%, which followed a 15.4% increase in last year's fourth quarter.
The company said profits increased 29.8%, excluding costs related to the acquisition of the Boston Proper brand, to $32.7 million, or 20 a share. For the full year, profits totaled $182.2 million, an increase of 26.1% compared to net income of $144.4 million for the fifty-two week year ended January 28, 2012.
Profits were aided by gross margins which expanded 90 basis points to 53.2% due largely to a higher level of full price selling and effective inventory management offset by higher incentive compensation expenses.
Going forward, the company this year plans to open its first Boston Proper stores, enter Canada and enhance its multichannel capabilities as it looks to deliver on financial goals that call for growing sales by low double digits and earnings per share in the mid-teen percentage range.
The company currently operates 611 Chico's stores and 99 outlets and 405 White House/Black Market stores and 45 outlets.