NEW YORK (AP) — Chico's FAS Inc. posted a 4.7 percent decline in its first-quarter net income, as the clothing chain was forced to discount seasonal merchandise amid cooler-than usual spring weather.
The Fort Myers, Fla.-based chain joins other clothing retailers that cited cool weather as a factor in dampening business for the first couple months of the year.
Shares fell more than 7 percent as the results were well below Wall Street expectations.
The women's clothing chain said Wednesday that it earned $51.1 million, or 31 cents per share, in the three-month period ended May 4. That compares with $53.6 million, or 32 cents per share, in the year-ago period.
Stripping out costs related to its Boston Proper acquisition, the company earned 32 cents per share in the quarter.
Revenue rose 3 percent to $670.7 million. Revenue at stores opened at least a year were unchanged from a year ago.
Analysts had expected earnings per share of 36 cents on revenue of $709 million.
The company said that gross profit margin was 57.7 percent down from 58.2 percent in the year-ago period, reflecting more aggressive discounting needed to clear goods.
As of May 4, the company operated 1,397 stores in the U.S. under the Chico's, White House/Black Market, Soma Intimates and Boston Proper names.
Shares fell $1.47, or 7.6 percent, to $17.87 in morning trading. Its shares are still near the higher end of their 52-week range of $13.52 to $19.95.