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Chico's Profit Rises 43%

The shares ease on disappointing November sales.
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(CHS) - Get Free Report

delivered another impressive quarter to Wall Street Tuesday as the red-hot clothing destination for middle-age women showed an ability to fatten profit margins with higher prices.

The mall-based, specialty retail chain earned $53.2 million, or 29 cents a share, a 43% gain from $37.1 million, or 21 cents a share, recorded in the same quarter last year. Analysts on Wall Street had expected earnings of 28 cents a share, according to consensus estimates reported by Thomson First Call.

Its sales rose 33% to $359 million on a 16% increase in sales at stores open for at least a year.

"The third quarter's operating margin of 22.9% is our best operating margin since going public in 1993," the company said in a release. Chico's attributed its margin improvement mainly to price increases.

Separately, Chico's reported its same-store sales in November were up 11.8%. That figure disappointed traders, who sold shares in after-hours trading following the release. Investors are wary of the prospects for mall-based stores to have a successful holiday season after the post-Thanksgiving shopping weekend was largely dominated by discount merchandisers and off-mall, big-box destinations.

Shares of Chico's were recently down 88 cents, or 2%, to $44 in postclose trading. The stock added 1.2% during normal trading hours.