Chico's FAS, Inc. (CHS) saw its loss narrow to $21.09 million, or $0.16 a share for the quarter ended Jan. 30, 2016. In the previous year period, the company reported a loss of $31.83 million, or $0.21 a share. On the other hand, adjusted net income for the quarter stood at $6.19 million, or $0.05 a share compared with $10.91 million or $0.07 a share, a year ago. Revenue during the quarter dropped 4.49 percent to $627.40 million from $656.91 million in the previous year period. Gross margin for the quarter expanded 81 basis points over the previous year period to 50.77 percent. Operating margin for the quarter stood at negative 2.30 percent as compared to a negative 5.55 percent for the previous year period.
Operating loss for the quarter was $14.44 million, compared with an operating loss of $36.45 million in the previous year period.
Shelley Broader, president and chief executive officer, said, "While we are disappointed with our fourth quarter sales, we are pleased that our responsiveness and disciplined inventory management in this intensely promotional environment allowed us to achieve positive gross margin leverage and a slight decline in total inventories over last year. Additionally, our business generated significant cash flow during the fiscal year, which in combination with our healthy balance sheet, allowed us to return $334 million to our shareholders in the form of dividends and share repurchases."
For financial year 2016, the company forecasts diluted earnings per share to be $0.09.
Operating cash flow drops significantly
Chico's FAS, Inc. has generated cash of $196.99 million from operating activities during the year, down 30.26 percent or $85.49 million, when compared with the last year. Cash flow from investing activities was $0.49 million from investing activities during the year as against cash outgo of $130.45 million in the last year.
The company has spent $240.38 million cash to carry out financing activities during the year as against cash outgo of $55.65 million in the last year period.
Cash and cash equivalents stood at $89.95 million as on Jan. 30, 2016, down 32.55 percent or $43.40 million from $133.35 million on Jan. 31, 2015.
Working capital drops significantly
Chico's FAS, Inc. has witnessed a decline in the working capital over the last year. It stood at $167.19 million as at Jan. 30, 2016, down 35.70 percent or $92.84 million from $260.03 million on Jan. 31, 2015. Current ratio was at 1.56 as on Jan. 30, 2016, down from 1.86 on Jan. 31, 2015.
Cash conversion cycle (CCC) has increased to 18 days for the quarter from 13 days for the last year period.
Days inventory outstanding has increased to 34 days for the quarter compared with 33 days for the previous year period. At the same time, days payable outstanding was almost stable at 19 days for the quarter, when compared with the previous year period.
