UPDATE: Chico's FAS Shares Drop After Downbeat Q3 Earnings

Shares of Chico's FAS

slipped 5% in pre-market trading after the company reported weaker-than-expected earnings for the third quarter. The Fort Myers, Florida-based company posted quarterly net income of $26.5 million, or $0.17 per share, versus adjusted net income of $35.8 million, or $0.22 per share, in the year-ago period. Including the impact of the Impairment Charges, Chico's FAS reported a year-ago net loss of $28.5 million, or $0.18 per share. Its revenue rose 1.5% to $665.6 million in the period. However, analysts were estimating earnings of $0.18 per share on revenue of $674.26 million. Comparable sales fell 1.6% in for the third quarter, versus a 1.4% declined in the year-ago quarter. The Chico's/Soma Intimates brands' comparable sales slipped 1.6% in the quarter, versus a 3.3% drop in the year-ago quarter. The Chico's brand posted a low single digit fall in comparable sales, versus a mid-single digit declined. The Soma Intimates brand posted a mid-single digit rise in comparable sales, versus a high-single digit gain. Comparable sales at the White House | Black Market brand dropped 1.4%, versus a 2.5% gain. Gross margin slipped 80 basis points to 54.7% of net sales. At the end of the quarter, total inventories per selling square foot rose 1.6%, excluding in-transit inventories. Todd E. Vogensen, Senior Vice President and Chief Financial Officer, Chico's FAS, said, "In addition to our brand strategies, fiscal discipline is an important driver of value creation. We remain focused on inventory management and ensuring SG&A and capital investments are aligned with meaningful growth opportunities. We are making progress on the initiatives discussed at our analyst day to achieve these objectives and expect the benefits to become more visible in our results over the coming quarters." Chico's FAS shares fell 5.05% to $15.03 in pre-market trading.