Despite strong digital sales, Chico’s FAS Inc. net sales for its fiscal first quarter ended May 2 decreased 46% year over year to $280.3 million, a 45.9% decrease from $517.7 million in its Q1 2019.
The apparel retailer reported a net loss of $178.3 million, compared with a net income of $2.0 million. Chico’s, No. 96 in the 2020 Digital Commerce 360 Top 1000, operates its namesake brand, workwear brand White House Black Market and online-only lingerie brand Soma.
Once the coronavirus pandemic hit the U.S., Chico’s temporarily closed all 1,341 of its stores and focused exclusively on ecommerce. Its distribution centers were still open but with enhanced health and safety protocols, the retailer said.
Overall, Chico’s had a double-digit increase in digital sales during the month of April, although it did not breakout ecommerce sales in the other months. Plus, all three brands had double-digit increases in online traffic in the first quarter, said incoming CEO Molly Langenstein in an earnings call, according to a Seeking Alpha transcript.
“Importantly, each brand registered double-digit growth in new customers, expanding our loyal customer base,” Langenstein said. “This momentum is continuing as we reopen stores.”
The retailer has begun reopening stores, with 80% of its stores slated to be open by the end of the week. During this reopening, Chico’s has used its store inventory to also fulfill online orders, offer buy online pick up in store, curbside pickup and shop by appointment.
Prior to the pandemic, the retailer has worked to remerchandise its Chico’s and White House Black Market products, with fewer formal products and more casual apparel. This strategy served it well during the pandemic, as it focused on selling casual products such as wovens, knits, tops and sweaters. As an online-only brand of undergarments, Soma’s sales have been more resilient, the retailer reported.
“Soma’s online-only business generated similar sales volumes to its total business in those weeks last year,” current CEO Bonnie Brooks said. “Soma also delivered a new single-day sales record during one of the promotional events, leading the highest single-day sales record in the brand’s history.”
In other earnings news:
- Ecommerce sales surged at athletic apparel retail chain lululemon Athletic Inc. (No. 55) in its fiscal first quarter 2020 ended May 3. Ecommerce sales increased 70% year over year in Q1, and 125% specifically in the month of April. Ecommerce sales were roughly $352 million in Q1, and about 54% of total sales. Plus, online traffic increased 40% and conversion 25% year over year in the quarter.
Overall revenue and net income, however, did decrease. Total sales decreased 17.0% to $652.0 million in its fiscal Q1 2020 from $782.3 million in its fiscal Q1 2019. Net income was $28.6 million, a 70.4% decrease from $96.6 million.
Apparel retailer Guess Inc. (No. 254) had a challenging fiscal first quarter 2021, which ended May 2, 2020. Total revenue decreased 51.5% to $260.3 million, compared with $536.7 million in the same prior-year quarter. It also had an operating loss of $108.6 million, compared with $22.4 million in the same prior-year quarter.
The retailer also experienced a “deceleration in performance” for its online business in the U.S., Canada and Europe in the first quarter compared with trends in its fiscal fourth quarter, CEO Carlos Alberini said in an earnings call transcribed by Seeking Alpha. “We believe customers were exclusively focused on essential products that we do not provide,” he said, referencing the coronavirus pandemic. Guess did not break out specific ecommerce figures. Additionally, Guess did not provide financial guidance for the rest of the year but says it expects revenue for the fiscal second quarter to have similar decreases of the first quarter.
- Specialty clothing retailer Zumiez Inc. (No. 266) reported total sales for the first quarter ended May 2 decreased 35.3% to $137.8 million, down from $212.9 million in the same year-ago period. Net loss for the quarter was $21.1 million. However, during the final eight weeks of the quarter after its stores were closed due to COVID-19, its online sales increased 75.9%. “We immediately shifted our focus to increasing financial flexibility and directing resources towards continuing to engage and service our customers through our digital platforms,” said CEO Rick Brooks in an earnings call transcribed by Seeking Alpha. The retailer withdrew its guidance for the rest of its fiscal 2021 due to uncertainty surrounding the pandemic.
- Children’s apparel brand The Children’s Place (No. 103) reported that the pandemic has shifted retail-only consumers to omnichannel consumers at four times the rate it saw pre-pandemic. 50% of consumers shopped online in the first quarter ended May 2, compared with 37% during the same period last year. For the second quarter so far, the number of orders placed online is up 300% compared with the previous year as 95% of its 920 stores remain closed. It plans to keep some of those stores closed permanently, closing 200 by the end of the year and another 100 in 2021. Exact ecommerce results were not disclosed. Total sales fell 38.1% for the quarter to $255.2 million from $412.4 million.
Percentage changes may not align exactly with dollar figures due to rounding.
James Risley contributed to this article.Favorite