Chico's FAS Inc. (NYSE:CHS) Q1 2019 Earnings Conference Call Transcript

Jun 11, 2019 • 08:00 am ET

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Chico's FAS Inc. (NYSE:CHS) Q1 2019 Earnings Conference Call Transcript

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Presentation
Executive
Bonnie R. Brooks

areas. But before I review those actions, let's address our first quarter performance. Top and bottom line results were in line with our expectations for the first quarter with performance mixed by brand.

Karen McKibbin, started as Chico's new brand President on April 1st, and the brand has already benefited from her influence. Under her direction, Chico's is elevating both the quality and overall aesthetic. Customers responded favorably to our spring and summer assortments which reflected a more balanced product architecture.

At Soma, we continued to deliver positive results. Successes in our two key focus areas of bras and sleepwear helped drive a 3.4% comp sales increase. We saw particular success with our Enbliss range extension, which is on track to be the number one bra franchise in our portfolio. We also saw excellent momentum with our Cool Nights sleepwear and with our shirt -- our sleepshirt in high demand and our customer continuing to buy our mix-and-match separates.

At White House Black Market, misses in color and print resulted in a first quarter comparable sales decline. However, we took immediate steps to course correct by bringing in new merchandising and design talent and adjusting future product. I'll talk more about this shortly.

I want to emphasize now that even with the improvement at Chico's and the continuing growth at Soma, we know more must be done to improve performance and value creation. We are not standing still. Let me provide additional color on the work underway.

First, our priority is to drive stronger sales across our entire portfolio. In the past six weeks, we have put the customer at the center of everything we are doing. This means we have taken many projects and distractions that were on the agenda, completely off the agenda, if they do not relate to the customer and sales.

This is a customer that I know well and have built many profitable sales around for decades in apparel. This is a customer that is at the center of the actions we are now taking in our brands. Job one for our business is creating exciting, wanted, and affordable fashion in each of the brands. This is what myself and the team leaders have been spending significant time on assessing the DNA of the brands and aligning that DNA to the customer, the product, the marketing and the stores and online selling tools.

We have significant opportunities in product styling, quality, fit and allocation at each of our brands and we are working to strengthen our market position through more effective digital marketing. I've been intimately involved with our brand presidents to review, revise and distort our product for required depth and designing marketing plans for the back half of the year to ensure we execute and drive sales.

At Chico's, in addition to Karen, we have recruited new talent in both product and marketing. The team is continuing to elevate the quality, fit and aesthetic of the product and it's focused on having a