Profits Plummet at Chico’s

First-quarter net sales for women’s apparel cataloger/retailer Chico’s FAS decreased 9.6%, to $409.6 million. Catalog and Web sales for the 13 weeks ended May 3 slipped 3% to $16.0 million, down from $16.5 million in the first quarter last year. Worse yet: Net income plunged 73%, to $12.7 million, from $47.2 million last year.

In a release company officials attributed the results to decreased sales for the Chico’s brand, which were nearly offset by increases in the White House/Black Market and Soma brands’ direct-to-consumer businesses. The company says it plans to continue making improvements to the direct-to-consumer infrastructure and merchandising approach to further promote sales through these channels.

Chico’s president/CEO Scott A. Edmonds said in the release: “We believe the challenging sales environment experienced in Fall 2007 has continued into the first quarter of 2008. The generally suppressed economic outlook, including housing pressures, rising food and fuel prices, and a more negative employment picture, has eroded consumer confidence and impacted discretionary spending on apparel, especially in the missy sector.”