Chico's FAS announced its financial results for the fiscal 2015 first quarter. Adjusted net income was $41.8 million compared to net income of $39.9 million for Q1 2014.
Article continues below
Q1 adjusted earnings per diluted share was $0.28 compared to earnings per diluted share of $0.26 in last year's first quarter. The first quarter adjusted results exclude EPS charges of $0.06 in 2015 related to restructuring and strategic charges.
Including the impact of the Charges, the company reported first quarter 2015 net income of $32.5 million, or $0.22 per diluted share.
For the first quarter, net sales were $693.3 million, an increase of 1.7% compared to $681.6 million in last year's first quarter, primarily reflecting 56 net new stores for a square footage increase of 3.3%, partially offset by a 0.1% decrease in comparable sales.
The 0.1% decrease in comparable sales for the first quarter was following a 2.6% decrease in last year's first quarter, and reflected approximately flat average dollar sale and transaction count.
For the first quarter, gross margin was $395.8 million compared to $382.9 million in last year's first quarter. Gross margin was 57.1% of net sales, a 90 basis point increase from last year's first quarter, primarily reflecting a decrease in promotional activity in response to improved inventory management, partially offset by the impact of product delayed by port issues in 2015 and the return to accrued incentive compensation at a target level.
For the first quarter, selling, general and administrative expenses (SG&A) were $328.2 million compared to $319.0 million in last year's first quarter. SG&A was 47.4% of net sales, a 60 basis point increase from last year's first quarter, primarily reflecting sales deleverage of occupancy expenses and the return to accrued incentive compensation at a target level, partially offset by benefits from cost reduction efforts announced last quarter.
For the first quarter, the company recorded pre-tax restructuring and strategic charges of $14.9 million primarily related to employee-related costs and property and equipment impairment charges. On an after-tax basis, the first quarter restructuring and strategic charges impact was $9.3 million, or $0.06 per diluted share.
At the end of the first quarter of 2015, total inventories per selling square foot decreased 2.8%, primarily reflecting improved inventory management and lower average unit cost compared to the first quarter last year. Total inventories increased by less than one percent compared to the first quarter of last year.
At the end of the first quarter of 2015, the company had $124 million in borrowings outstanding under its revolving credit facility dated July 27, 2011, which was used to fund a portion of the accelerated stock repurchase agreements entered into in the first quarter.
On May 4, 2015, the company executed a new $200 million credit agreement, with a term of five years, of which $124 million was drawn at closing and used to repay all borrowings outstanding under its Existing Credit Facility. ■