Chico’s posts increase in Q1 profit, but lowers FY outlook

US retailer Chico’s has lowered its full-year outlook after reporting widening profits but a drop in sales in the first quarter.

The women's clothing and accessories company posted a net income of 39.9 million dollars in the three months to April 29, up from 34.9 million dollars a year earlier.

Despite the increase in profitability, the retailer lowered its full-year earnings per diluted share outlook to between 0.70 dollars and 0.82 dollars, down from its previous estimate of between 0.79 dollars and 0.91 dollars.

“We delivered another quarter of outstanding operating income and EPS performance, underscoring our commitment to our four strategic pillars of customer-led, product-obsessed, digital-first, and operationally excellent,” said Chico’s CEO and president Molly Langenstein in a statement.

Net sales in the quarter dropped 1.1 percent to 534.7 million dollars, which the company said reflected a 0.6 percent drop in comparable sales as well as the impact of net store closures. The decline in comparable sales was primarily due to a decrease in transaction count, mostly offset by an increase in average dollar sales.

Langenstein continued: “Total year-over-year sales were in line with our outlook, down 1.1 percent, on top of 39.4 percent growth in the first quarter last year.

“For the company as a whole, full-priced sales remained healthy, spend per customer and average unit retail increased year-over-year; and we gained market share across all brands.”

For FY23, the retailer now expects consolidated net sales of between 2.18 billion dollars and 2.21 billion dollars, down from its previous guidance of between 2.22 billion dollars and 2.25 billion dollars.