Chico's FAS Posts Wider Q4 Loss, Kohl's, Abercrombie & Fitch Profit Tops View

(RTTNews) - Chico's FAS Inc. (CHS) Tuesday reported a wider year-over-year net loss for the fourth quarter. Meanwhile, Kohl's Corp.'s (KSS) fourth-quarter net income grew 29 percent from the previous year. But Abercrombie & Fitch Co.'s (ANF) fourth-quarter net income decreased 1 percent from the prior year.

Kohl's quarterly adjusted earnings and net sales beat analysts' estimates. Abercrombie & Fitch's quarterly adjusted earnings topped analysts' estimates, but net sales matched.

Kohl's said it is resuming capital allocation strategy in 2021, including increasing capital expenditures, reinstating dividend, resuming share repurchase program, and employing liability management strategies.

Meanwhile, Chico's FAS reported that its fourth-quarter net loss widened to $79.1 million or $0.68 per share from $4.3 million or $0.04 per share last year. The latest-quarter results included $35.9 million or $0.32 per share, in significant after-tax non-cash charges, including a deferred tax asset valuation allowance of $32.1 million or $0.28 per share. Analysts polled by Thomson Reuters expected the company to report a loss of $0.32 per share for the fourth-quarter. Analysts' estimates typically exclude special items.

Quarterly net sales declined 26.7 percent to $386.20 million from last year's $527.09 million, reflecting a comparable sales decline of 24.9 percent as well as the impact of 39 net permanent store closures since last year's fourth quarter, partially offset by double-digit growth in digital sales. Analysts expected revenues of $447.6 million for the fourth-quarter.

The comparable sales decline was driven by a decrease in transaction count as in-store traffic continued to be significantly impacted by the pandemic and lower average dollar sale.

Soma's comparable sales increased 15.2 percent, with digital sales increasing 68.6 percent compared to last year's fourth quarter.

Chico's FAS said it did not provide specific fiscal 2021 first-quarter or full-year financial guidance due to the ongoing market disruption caused by the pandemic and related uncertainty on timing and extent of the market recovery.

The company anticipates closing about 13 percent to 16 percent of its remaining store fleet over the next three fiscal years, with approximately 40 to 45 of these closures occurring in fiscal 2021. The vast majority are expected to be mall-based Chico's and White House Black Market stores. These actions would put the company ahead of its original multi-year closure target of 250 stores.

Moreover, Kohl's Corp. reported that net income for the fourth-quarter grew 29 percent to $343 million from the prior year's $265 million, with earnings per share improving to $2.20 from $1.72 in the prior year.

Adjusted net income for the quarter was $346 million or $2.22 per share compared to $308 million or $1.99 per share in the prior year. Analysts expected earnings of $1.01 per share for the fourth-quarter.

Net sales for the fourth-quarter decreased 10.1 percent to $5.88 billion from $6.54 billion in the previous year. Wall Street analysts had a consensus revenue estimate of $5.86 billion for the quarter. Total revenue for the fourth-quarter declined 10.1 percent to $6.14 billion from $6.83 billion in the prior year.

The company now expects full year 2021 net sales to increase in the mid-teens percentage range as compared to the prior year and earnings per share to be in the range of $2.45 to $2.95, excluding any non-recurring charges. Analysts expect annual earnings of $2.67 per share.

The company plans to resume its capital allocation strategy in 2021, including increasing capital expenditures, reinstating dividend, resuming share repurchase program, and employing liability management strategies.

The company expects to repurchase $200 million to $300 million of shares. The company projects capital expenditures to be $550 million to $600 million, including the launch of its Sephora partnership, the opening of its sixth e-commerce fulfillment center and store refresh activity.

On February 24, 2021, Kohl's declared a quarterly cash dividend on the company's common stock of $0.25 per share. The dividend is payable March 31, 2021 to shareholders of record at the close of business on March 17, 2021.

Abercrombie & Fitch Co. posted fourth-quarter net income attributable to the company of $82.39 million down about 1 percent from $83.13 million in the prior year. Net income per share was $1.27 compared to $1.29 in the previous year.

Adjusted earnings per share for the quarter were $1.50 compared to $1.31 in the previous year. Analysts expected earnings of $1.22 per share for the fourth-quarter. Adjusted non-GAAP on a constant currency basis was $1.50 compared to $1.48 last year.

Net sales for the fourth-quarter were $1.12 billion down 5 percent from $1.18 billion last year, reflecting the adverse impact of COVID-19. Wall Street analysts had a consensus revenue estimate of $1.12 billion for the fourth-quarter. Digital net sales for the fourth-quarter increased 34 percent year-over-year to $639 million reflecting robust growth in every month of the quarter.

Following the company's decision to suspend its share repurchase and dividend programs in light of COVID-19 during fiscal 2020, the company now plans to resume share repurchase activity.

As of January 30, 2021, the Company had the authority to repurchase about 3.2 million shares as part of the A&F Board of Directors' previously approved June 2019 share repurchase authorization.

On February 19, 2021, the A&F Board of Directors replaced the then existing share repurchase authorization with a new 10.0 million share authorization, bringing total shares available for purchase as of February 19, 2021 to 10.0 million share.

The company said it continues to review opportunities to further optimize its global square footage through a combination of mall-based and flagship store closures and the rightsizing of legacy store formats.

In Tuesday pre-market trade, CHS was trading at $2.42, down $0.13 or 5.10 percent. However, KSS was trading at $57.16 up $0.16 or 0.28 percent. ANF was trading at $28.00 up $0.38 or 1.38 percent.