More Sales Woes for Chico's

Updated from 5:31 p.m. EST

Chico's FAS(CHS) reported a drop in third-quarter earnings, meeting its lowered estimates, as the women's apparel retailer continued to contend with "missteps" in its fashion merchandising and an aggressive expansion plan.

The company also reported another decline in same-store sales for November amid a tough promotional environment and weaker-than-expected results at its White House|Black Market chain.

The retailer, which sells products under the Chico's, White House|Black Market, Soma, and Fitigues brand names, posted earnings of $42 million, or 24 cents a share, for the quarter ended Oct. 28. A year earlier, the company earned $53 million, or 29 cents a share.

Sales increased 12.5% to $404 million, while same-store sales declined 1.2%.

Analysts polled by Thomson First Call expected earnings of 23 cents a share on revenue of $407.9 million.

The results were in line with Chico's forecast earlier this month, when the company posted disappointing October sales and lowered its third-quarter earnings projection to the range of 22 cents to 25 cents a share.

"The aggressive store opening/relocation/expansion program, combined with the operational initiatives in the technology and customer service areas we are undertaking, have put short-term pressure on our earnings," said President and CEO Scott Edmonds in a press release Tuesday. "These factors, along with missteps in our fashion merchandising, have been the principal reasons for the volatility in our short-term profitability."