Same-store sales rose while direct sales leapt for women’s apparel retailer Chico’s FAS.
In its most recent fourth quarter, the company recorded sales of $435.7 million, up from $373.4 million. It generated net income of $17.5 million, compared with a fourth-quarter 2008 loss of $40.5 million.
The turnaround is largely due to Chico’s tamping down the cost of its good sold. A year ago, this amounted to 55.6% of total sales. For the quarter just ended, Chico’s pulled this down to 45.4%.
In a statement accompanying its earnings, the company noted that of late it had not relied on deep markdowns, and had improved its ability to sell merchandise at full price.
During the quarter, the company’s same-store sales increased 6.1% from fourth-quarter 2008. But direct sales jumped 42%, from $22.3 million to $31.6 million. In doing so, they increased their share of total sales from 6% to 7.2%.
For the full year, the company’s total sales rose from $1.58 billion to $1.71 billion. The company recorded net income of $69.6 million, compared to a net loss of $19.1 million.
In 2009, same-store sales 6.1% over 2008, while DM sales jumped by 39%, from $70.6 million to $98.3 million.
The company also increased its marketing spending during the fourth quarter by $400,000, with the bulk of the new spending going toward print and television network advertising in support of national advertising campaigns. That said, as a percentage of total sales, marketing expenditure fell by 0.6%.
