Chico's FAS Inc. (NYSE:CHS) Q3 2018 Earnings Conference Call Transcript
Nov 28, 2018 • 08:30 am ET
Good day and welcome to the Chico's FAS, Inc. Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Julie Lorigan, Vice President of Investor Relations and Corporate Communications, please go ahead.
Thanks, Nicole and good morning everyone. Welcome to Chico's FAS Third Quarter 2018 Earnings Conference Call and Webcast. Joining me today at our National Store Support Center in Fort Myers are Shelley Broader, our Chief Executive Officer; and Todd Vogensen, our Chief Financial Officer. Our earnings release issued today can be found on our website at www.chicosfas.com under Investor Relations, Press Releases. (Forward-Looking Cautionary Statements) And with that, I'll turn it over to Shelley.
Shelley G. Broader
Thank you, Julie, and good morning everyone. As you saw from today's press release, performance in the quarter was mixed across our three brands and consolidated results were below expectations. I want to emphasize two key points right up front. First, we are absolutely not satisfied with these results and second, we are acting with resolve to address the performance at the Chico's brand.
Chico's FAS has a long record of disciplined cost management, but we know we can't grow our business through cost management alone. Our attention is keenly focused on establishing a similar record of consistent top line growth across all three of our brands, Chico's included. We have a very loyal customer base, an advancing omni-presence, solid financial footing, and enthusiastic and committed teams within our Company. These elements all give me confidence that we can improve the top line and reignite customer excitement for Chico's apparel.
On that note, let me start with the Chico's brand, what happened and what we're doing to improve performance. As you will recall, we launched a refresh for our Chico's brand in February of 2018. The launch emphasized Boho style's bold colors and original print that reflected the brand's artisanal heritage. We saw strong response from target customers who connected with this look and feel. However, we took the associated merchandising, marketing too far. We did not have the appropriate balance in clean, classic, polished silhouettes or depth in the key basic items that appeal to our polished and our traditional customer. Actions are underway to turnaround the brand's performance.
First, we announced today a leadership transition for the Chico's brand. Diane Ellis is departing as Brand President and the search is well underway for her replacement. In the interim, I will personally lead the Chico's brand. I am confident that our flagship brand will have the support it needs while we complete the search for a new Brand President. Secondly, in terms of product, we have adjusted a portion of the spring assortments to appropriately balance the brand's merchandise architecture with a greater emphasis on clean, classic, polished silhouettes. We have reduced planned receipts accordingly and we have invested into basics. We have also chased more classic styles that are performing well.