Chico's FAS, Inc.

Second-quarter total sales were $545 million, down 2.4% year over year, and comparable sales were down 3%. Adjusted diluted EPS was $0.28 versus $0.34 a year ago. Gross margin was 39.8% versus 41.4% last year, SG&A was $170 million or 31.3% of sales versus $173 million or 31.0%, and operating income was $46.5 million or 8.5% of sales. EBITDA was $55.5 million, or 10.2% of net sales. By brand, Soma net sales rose 2.1% with comps down 0.5%, Chico's comps fell 2.5%, and White House Black Market comps fell 5.7%. For fiscal 2023, the company now expects revenue to be flat to up in the low-single-digit range, two-year net sales growth of 18% to 20%, Q3 sales of $505 million to $525 million, Q3 EPS of $0.08 to $0.12, full-year sales of $2.145 billion to $2.175 billion, full-year EPS of $0.66 to $0.74, and capital expenditures of $75 million to $85 million.

Molly Langenstein framed the quarter as another period of strong operating performance with healthy full-price selling, customer gains, and share gains across the brands. Her tone was constructive and increasingly optimistic about fall, saying the company is “beginning to see a trend change” and that inventories are positioned to support the back half. She emphasized proportion shifts in apparel, innovation in intimates, and multi-channel engagement as the key strategic drivers.

David Oliver said the company delivered a profitable quarter with strong gross margin performance, disciplined expense control, and strong free cash flow. He highlighted gross margin of 39.8%, SG&A of $170 million, operating income of $46.5 million, EBITDA of $55.5 million, cash of $151 million, total liquidity of $386 million, and debt of $24 million with debt-to-EBITDA below 0.2x. He also noted inventory of $300 million, down 11% year over year, and said the company remains focused on investing in digital, stores, and technology while returning excess cash and reducing debt.

Analysts focused on inventory positioning, gross margin drivers, outlet trends, customer reactivation, and whether the business is seeing a shift back to casual or continuing dress-up momentum. Management said inventory is now fresher and more balanced, with fall product up 12% and spring/summer inventory down 12%, and explained second-quarter margin pressure came from occupancy costs, supply chain/raw materials, and a normalized White House Black Market semiannual sale. They also said outlet stores rebounded in Q2, digital outlet was still soft, customer reactivation remains strong, and the trend is not about casual versus dressy but about a broader proportion shift in silhouettes and multi-use outfits.