Chico's Reports Increased Net Loss

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On March 3, 2009, Chico's FAS ( CHS) reported that its Q4 FY08 net loss widened, hurt by a store impairment charge of $9.10 million or $0.05 per share and an after-tax severance charge of $6.60 million or $0.04 per share. Net loss increased to $40.54 million or $0.23 per share from $20.54 million or $0.12 per share in Q4 FY07. Excluding items, net loss increased to $24.80 million or $0.14 per share from $20.50 million or $0.12 per share a year ago. The latest quarterly consensus estimate was a loss of $0.17 per share.

Revenue dropped 8.8% to $373.38 million from $409.30 million, due to a 13.0% decline in comparable store sales and reduced sales at its Chico's/Soma stores. Looking at its businesses, net sales by Chico's and Soma stores slipped 13.5% to $242.89 million, negatively impacted by a 17.0% decrease in same-store sales. Net sales by the Direct-to-Consumer channel rose 8.8% to $22.31million, driven by increased traffic in all of the direct-to-consumer channels and higher sales of the Soma and WH/BM brands. Similarly, net sales by White House/Black Market stores were $108.18 million, up 0.2% from $107.97 million a year ago.

The company opened 6 new stores, expanded or relocated 2 stores, and closed 13 stores, taking the total store count to 1,074. This includes 618 Chico's front-line stores, 41 Chico's outlet stores, 327 White House/Black Market front-line stores, 17 White House|Black Market outlet stores, 70 Soma Intimates front-line stores and 1 Soma Intimates outlet store.

During FY08, the company's net loss stood at $19.14 million or $0.11 per share compared to net profit of $88.88 million or $0.50 per share in FY07. Excluding charges, net loss was $4.90 million or $0.03 per share compared to net income of $88.90 million, or $0.50 per share. Annual revenue decreased 7.7% to $1.58 billion from $1.71 billion a year ago, hurt by a 15.1% decline in comparable store sales.

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