An increase in third-quarter net sales was not enough to bolster Chico’s FAS’s net income, which took a hit from its Boston Proper business.
The company reported net income of $35.8 million, down 15% from $42 million in the same period a year earlier.
The company reported net sales for the third quarter of $655.6 million, an increase of 3% compared to $636.7 million in last year's third quarter, primarily reflecting 115 net new stores. Comparable sales for the quarter decreased 1.4% — compared to a 9.9% increase in last year's third quarter — which, according to the company, reflects the cycling of strong comparable sales last year and the impact of lower traffic.
Pre-tax, non-cash goodwill and trade name impairment charges of $72.5 million resulting from recent sales declines in the Boston Proper catalog business impacted net income results. The company is therefore taking steps to evolve the Boston Proper from a direct-to-consumer only business to an omnichannel enterprise, integrating brick and mortar, catalog and Web platforms.
The company operates 1,470 stores in the U.S. and Canada.