US fashion company Chico’s has raised its fiscal 2019 fourth-quarter outlook to take account of the impact of tariffs and charges related to the repositioning of its organisational structure, and improved sales.
The company is now expecting net sales and consolidated comparable sales to be approximately flat – an improvement on its previous outlook of a low single-digit decline. This reflects sequential comparable sales improvement at Chico’s and White House Black Market, as well as continued strong sales growth at Soma.
The firm is also expecting adjusted gross margin as a percent of sales to be approximately flat to last year’s adjusted gross margin of 32.3%, favourable to its previous outlook of down 100 to 150 basis points.
“We are experiencing continued comparable sales improvement across all three brands for the first time in several years, and as a result, we are raising our outlook for the fourth quarter,” said CEO Bonnie Brooks.
“We are encouraged by our customer’s receptivity to our improved product assortments, our elevated marketing, and our enhanced selling tools, which were our key strategic priorities for fall and holiday. Our commitment made in Q2 2019 to recruiting executive-level leadership with proven track records has now resulted in the addition of top talent to the company across all of our three brands. While work remains, we are confident that we are on the right path to enhancing shareholder value.”
Meanwhile, Chico’s CFO, Todd Vogensen, has resigned, effective 17 January. Jennifer Ellis, senior vice president of finance, has been appointed interim finance chief with effect from 3 February.