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Zale, American Eagle, Chico's FAS Profits Sag

 
     

    More bad news from the retail sector hit today, as Chico’s FAS (CHS), American Eagle (AEO), and Zale’s (ZLC) all posted earnings far below totals for last year. The three retailers all operate out of malls, and are affected by declining mall traffic and consumers’ desire to pinch pennies for more essential items like food, housing, and gasoline.

    Chico’s FAS, the Fort Myers, Fla.-based retailer of casual women’s clothing and accessories, reported third quarter earnings of just 1 penny per share, or $2 million. This is approximately twelve times lower than Chico’s last year’s earnings of 13 cents a share, or $24 million.

    Sales at Chico’s, which makes clothing generally geared towards women 35 and older, totaled $394 million, a drop of 5.2% year over year.

    In a company statement, Chico’s Chief Executive Scott Edmonds said that lower sales and fewer transactions were responsible for a greater-than expected amount of markdowns.

    Chico’s also owns the dress clothing retailer, “White House|Black Market.” The company operates over 1,000 retail stores in the U.S. and its territories.

    At American Eagle Outfitters, the Pittsburgh, Pa.-based retailer of young adult clothing, third-quarter profits dropped 57% year over year as mall traffic decreased.

    The company, which offers apparel geared towards teens aged 15 to 25, had income of $42.6 million, or 21 cents per share for the quarter, down from $99.4 million, or 45 cents from a year prior.

    Sales at American Eagle stores, including the 987 stores operated in the U.S. and the 39 “Aerie” stores that sell undergarments, fell 7% as women’s clothing purchases slowed.

    American Eagle hopes to attract more teens to stores this holiday seasons with promotions like, “buy one, get one 50 percent off,” of tops and jeans.

    At Zale Corporation, the Irving, Texas-based fine jewelry retailer, larger-than expected losses were posted due to consumers cutting back on luxury spending. Zale’s losses totaled $1.43 per share, or $45.3 million, while Thomson Reuters analysts predicted a loss of 95 cents per share.

    Last year, the company, which operates 1,396 stores in the U.S., and also operates under the names “Gordon's Jewelers,” “Peoples Jewellers,” and “Mappins Jewellers,” posted losses of $28.4 million, or 58 cents per share. This year marks the second year of declining profits for the company, which has announced plans to close 105 stores and cut 200 jobs to save money.

     Zale’s also operates 739 Kiosks in malls called “Piercing Pagoda” and “Plumb Gold.”

     

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