(Filed Under wholesale Lingerie News). Soma is on a roll, with comparable sales jumping 11.3% in the third quarter, after a similar jump of 10.9% in the second quarter and a 3.4% rise in the first quarter.
Soma’s net sales rose to $79.8 million in the third quarter, up from $72.6 million in the same quarter last year. For the first nine months of the year, sales at the intimates division of Chico’s FAS, were $259.5 million, up from $239.8 million in the same period last year. The company stated that Soma’s sales included those from its recently launched TellTale brand, but noted those are “not a significant component of Soma revenue.”
Despite the rising sales and comps, Soma marched ahead with its ongoing plans to close locations, eliminating seven stores in the three months between August 3 and November 2, reducing the total to 247. It also closed one Soma outlet during the same period, reducing the total to 18.
Meanwhile, parent company Chico’s, which sells a variety of apparel, including under the White House Black Market brand, reported a net loss of $8.1 million on sales of $484.7 million in the third quarter, compared to a profit of $6.5 million on sales of $499.9 million in the same three months last year.
The company stated the sales growth at Soma was “driven by product innovation and inventory and marketing investments.” It added that company-wide it is “actively diversifying its country of origin mix and reducing manufacturing penetration in China, thereby mitigating the majority of tariff increases.”
In the conference call to discuss the results with analysts, Chico’s president and CEO Bonnie Brooks boasted that the results generated by intimates group president Mary van Praag were “one of the best, if not the best, in the industry.”
Van Praag pointed out that the “third quarter marks five straight quarters of positive comp growth and record Q3 sales. Positive comp growth coming in all channels, and particularly strong in our DCOM business. Highlights for this quarter included our very successful 15th anniversary bra event, which attracted a record of 60,000 new customers to the brands in just two days. Also, during the quarter, we launched the first style of our innovative new Vanishing 360 Collections, building on our largest and most successful franchise. More styles and extended sizing are coming in the spring.”
Van Praag continued, “Our pajama business driver, Soma Cool Nights, is growing beyond our expectations. Our elevated prints, details and mix and match are just what she desires. We recently initiated a study on sleep habits that details the benefit of Cool Nights sleep. We’ll continue to leverage insights like these to grow this business on a foundation of both innovation and differentiation.”
“We also continued to drive growth through our focus on solution-based products that we believe are the most comfortable and innovative in the industry. During the year, we launched several new innovative products, including the already mentioned Vanishing 360, Lightest Lift, the Cooking bra and extensions to our highly successful Enbliss franchise, just to name a few. These have resulted in improved engagement from our existing customers and given prospective new customers compelling reasons to enter the brand.”
“We also delivered improvements to our customer experience. We are invested in our bra fit expertise training, enhance our satisfaction guarantee and develop a first-of-its-kind fit tool, SOMAINNOFIT. And finally, we have strategically invested in marketing at Soma, which has helped generate growth in both new and existing customers. In particular, we’ve been very successful with our digital, paid social and public relations efforts to build the awareness of the brands in the minds of consumers,” van Praag concluded.
Chico’s EVP and CFO Todd Vogensen explained that the company has made “a fair amount of inventory investment in is Soma. So, Soma is showing fantastic growth. They have a great pipeline of new products that are coming out. And the type of inventory that Soma has in their intimates just tends to be slower turn, but profitable inventory and its basics that have long lives. So, we’re able to make that investment in a relatively low risk way.” — NM
The full conference call can be found here: https://seekingalpha.com/article/4309198-chicos-fas-inc-chs-ceo-bonnie-brooks-q3-2019-results-earnings-call-transcript
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