Chico's sees low double-digit decline in Q4 sales, consensus $508.31M
The company is updating its outlook for the fiscal 2018 fourth quarter ending February 2, 2019. Based on results to date, total company fourth quarter net sales and comparable sales are trending better than its previous outlook. Specifically, by brand, fourth quarter comparable sales for Chico's are trending in line with expectations. The company continues to implement its performance improvement plan for the Chico's brand, and is putting guidelines in place so that future product offerings, marketing and assortment architecture are aligned for all customers who shop the Chico's brand. In addition, White House Black Market comparable sales are trending better than expectations, and Soma is strong with sales trending well above expectations. The company anticipates a low double-digit decline in net sales compared to its previous expectation for a mid-teen decline, which includes the negative impact of the 53rd week of $29M in fiscal 2017, and a mid-single digit decline in consolidated comparable sales, versus its previous outlook for a high single-digit decline in consolidated comparable sales. The company expects fourth quarter gross margin rate to decline approximately 500 basis points compared to fiscal 2017, primarily driven by the initial ramp-up in costs from the company's omnichannel programs, more aggressive promotional cadence to clear through seasonal merchandise and deleverage of fixed costs from lower sales. This compares to its previous expectation for a 400 to 500 basis point decline in the company's gross margin rate. SG&A expenses for the fourth quarter are expected to decrease approximately $10M compared the prior year period, primarily due to the 53rd week in fiscal 2017 and in line with the company's previous expectation.