Chico's reports Q3 direct-to-consumer sales up 41%

Retail company Chico's FAS Inc. reported a 41% increase in direct-to-consumer sales in the third quarter. In its November 17 earnings report, the company said its direct-to-consumer sales, which include e-commerce and catalog orders, improved year-over-year to $34.4 million in Q3.

“Our customer is becoming more and more confident in finding what she wants at our brand's website,” said Bob Atkinson, VP of investor relations at Chico's FAS. That was evident in the 70% increase in direct-to-consumer sales for Chico FAS' White House Black Market (WHBM) brand, which skews to a younger, more Internet-savvy consumer, he said.

Comparable store sales were also positive, though not at the level of direct-to-consumer, up 3.1% in Q3. Net sales were up 8.1% in the third quarter, to $483 million, compared to $446.9 million in last year's Q3. Net income for the third quarter increased to $28.8 million, compared to $22.7 million in the same period of last year.

In addition to managing websites for the Chico's, Soma Intimates and WHBM brands, Chico's FAS also publishes a print catalog for each brand and offers a digital version of the catalog online. During the earnings call, Kent Kleesberger, CFO of Chico's FAS, said the Chico's brand has tested reduced print catalog circulation, but that WHBM will experiment with a larger page count. WHBM may also add a direct mail piece to upcoming catalogs, he said.

“We're really getting some great successes in our direct-to-consumer,” said Dave Dyer, Chico' FAS president, CEO and director, on the earnings call. “When we look at the two channels…our direct-to-consumer is somewhere around 10 to 15 points higher in operating profit just because you don't have the selling cost and the marketing cost associated with the stores. So I think that is where we'll be going next year.”