Chico's FAS Inc. (NYSE:CHS) Q1 2019 Earnings Conference Call Transcript
Jun 11, 2019 • 08:00 am ET
Todd E. Vogensen
sales to decline approximately 200 basis points to 250 basis points due primarily to incremental costs associated with our omni-channel programs and deleverage of fixed costs from lower sales. And our SG&A expenses will be approximately flat reflecting ongoing cost management, offset by investments in Soma marketing.
For the full year of 2019, compared to last year, we expect a low to mid single digit decline in total net sales and consolidated comparable sales versus our previous guidance of a low single digit decline in total sales and comparable sales.
This outlook takes into consideration our first quarter performance and reflects improved sales trends across all brands in the second half of the fiscal year driven by the key priorities and actions that Bonnie outlined earlier.
Gross margin as a percent of net sales will be down 50 basis points to 100 basis points, versus our previous guidance of approximately flat to down 50 basis points due to incremental costs associated with our omnichannel programs and deleverage of fixed costs from lower sales.
The improvement in the second half trends for our full year outlook for gross margins is driven by the expected improvement in sales trends across all brands in the second half of the year.
SG&A, we expect to be down approximately $10 million versus our previous guidance of approximately flat reflecting investments in Soma marketing, offset by ongoing cost management. And lastly, our fiscal 2019 tax rate in the range of 35% to 40% which excludes accelerated depreciation related to our fleet optimization plan.
Note that for the second through fourth quarter of fiscal 2019, we anticipate our tax rate to normalize in the range of 25% to 28%. Overall, our bottom line earnings expectations are roughly the same as our prior guidance. We've re-balanced components of our P&L to account for a weaker first half and a stronger second half of the year.
Now, I'll turn the call back over to Julie for Q&A.
Thank you, Todd. At this time we'd be happy to take your questions and I'll turn it back to Anita to begin.