What happened
Shares of Chico's FAS (CHS +0.00%) were up 11.6% as of 11:30 a.m. EDT Thursday after the clothing retailer increased its fourth-quarter outlook.
So what
Chico's now expects both Q4 net sales and comparable-store sales to be roughly flat on a year-over-year basis, up from management's previous guidance -- which was provided in late November -- for a low-single-digit decline. Chico's also said gross margin should be flat compared to the same year-ago period at roughly 32.3%, improved from old guidance for a decline of 100 to 150 basis points. And its sales, general, and administrative expenses should arrive at the lower end of the company's previous $5 million to $7 million target.
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Drilling down further, Chico's says its new top-line outlook benefited from continued strength at its Soma retail stores, coupled with comps improvements at both its namesake locations and White House Black Market.
"We are experiencing continued sales improvement across all three brands for the first time in several years, and as a result, today we are raising our outlook for the fourth quarter," elaborated Chico's CEO Bonnie Brooks. "We are encouraged by our customer's receptivity to our improved product assortments, our elevated marketing, and our enhanced selling tools, which were our key strategic priorities for fall and holiday."
Now what
In other news, the company announced that CFO Todd Vogensen will resign effective January 17, 2020, in order to accept the same position at another company. Current senior VP of Finance Jennifer Ellis will serve as interim CFO until the company identifies a permanent replacement.
Still, it seems Chico's raised outlook effectively offset any concerns over this executive turnover, and this consumer discretionary stock is responding accordingly.
