Heavy Promotion Pressures Chico's Growth, Profits Miss

Women's retailer Chico's faced pressure to give discounts in order to clear the seasonal clothing. Its bottom line took a hit and missed forecasts. Shares are moving lower on Wednesday. Profit for the second quarter fell 31% and came in at 20 cents a share. That's more than a nickel below estimates. Sales came in at $671 million, also slightly below expectations. Comparable sales at stores opened at least one year edged up 0.3%. While that growth is small, it's better than the 2.6% same store sales decline a year earlier. The retailer said customer traffic has been steady because of the heavy promotion, but average transaction amount declined for the same reason.