Chico’s posts widening Q2 profits despite decline in sales

US retailer Chico’s has updated its full-year outlook after reporting a decline in sales but widening earnings in the second quarter.

The women’s clothing and accessories company generated sales of 545.1 million dollars in the three months ended July 29, a drop of 2.4 percent year-on-year which it said primarily reflected a comparable sales decrease of 3 percent.

The comparable sales decline was driven by a decrease in transaction count, which was partially offset by an increase in average dollar sales, it said.

Chico’s updates full-year guidance

Accordingly, the company has lowered its full-year sales outlook. It now expects consolidated net sales of between 2.145 billion dollars and 2.175 billion dollars, compared to previous guidance of between 2.175 billion dollars and 2.205 billion dollars.

On a brighter note, the company has increased its FY23 diluted earnings per share outlook to between 0.87 dollars and 0.95 dollars, up from between 0.70 dollars and 0.82 dollars.

That came as the company’s Q2 net profit widened to 59.3 million dollars, or 0.49 dollars per diluted share, from 42 million dollars, or 0.34 dollars per diluted share, the prior year.

“We delivered another quarter of strong operating income and earnings performance, which was consistent with our outlook,” Chico’s chief executive Molly Langenstein said in a statement.

She hailed all three of the company’s brands for “healthy” full-priced sales, attracting new customers, and gaining market share.