(Filed Under wholesale Lingerie News). Comparable sales at Soma fell 1.7% in the third quarter, marking the second quarterly decline in a row for the brand. For the 39 weeks ended October 28, 2017 sales were down 1.1%.
Up until the last two quarters, the lingerie division of Chico’s FAS had enjoyed a lengthy, almost unbroken string of positive sales comps dating back (with one negative exception in the third quarter of 2015) to the second quarter of 2009.
Sales at the Soma division were $72.462 million during the thirteen weeks ended October 28, 2017, compared to $74.320 million during the same period in 2016. During the first three quarters of this year, Soma sales totaled $244.699 million, compared to $247.134 million in the 39 weeks ended October 29, 2016.
For parent company Chico’s, third quarter earnings fell to $16.690 million on lower sales of $532.287 million, compared to net income of $23.598 million on sales of $596.912 million in the same three months last year.
In the first nine months of this year Chico’s earned $73.025 million on sales of $1.695 billion compared to $77.721 million on sales of $1.876 billion in the first three quarters of 2016. In addition to Soma the company owns the White House Black Market and Chico’s brands and stores.
The company noted that for the firm as a whole, “Results for the third quarter include the unfavorable impact of hurricanes Harvey, Irma and Maria...of approximately $5.0 million after-tax, or $0.04 per diluted share.”
Said Shelley Broader, CEO and president of Chico’s, “We remain focused on driving top line growth and are making important improvements across our brands, including the expansion of special sizes, the broadening of omni-channel engagement and the creation of alternative sales channels to fuel growth.
In the conference call with analysts to discuss the results, Broader added, “For Soma, we did see a nice post hurricane improvement in traffic and sales trends. As with Chico’s, we saw an improved customer response to our holiday floor set. Casual sleepwear, basic foundation bras and panties were our best performers this quarter. We underperformed in loungewear and in the Vanishing Back Balconet, which we launched as an extension of our highly successful vanishing-back bra franchise. Unfortunately, this particular bra was not differentiated enough to drive increased sales.”
She added, “Mary van Praag, our new brand president and her team are focused on merchandise improvement and enhancing our core franchise with an emphasis on solutions which have always differentiated the brand and where Soma has historically excelled. These solutions include vanishing-back bra, vanishing-edge and cool night sleepwear. PJ sets and separates will also be a focus, particularly heading into the holiday season. We are working to make gift giving easy with casual sleepwear emphasized in stores and online.”
As it released its financial data, Chico’s included information on its store counts. In the time between July 29 and October 28, 2017 Soma closed two “frontline boutiques” reducing the total number of locations to 271. During the same period the company continued to maintain 19 Soma “outlets.” — NM
The complete conference call transcript can be found here: https://seekingalpha.com/article/4126801-chicos-fas-chs-ceo-shelley-broader-q3-2017-results-earnings-call-transcript?page=1
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