CHS - Earnings call transcript Q1 2018

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Operator

Good day, and welcome to the Chico's FAS Inc.'s Q1 2018 Earnings Call and Webcast. [Operator Instructions]. I would now like to turn the conference over to Julie Lorigan, Vice President of Investor Relations, Public Relations and Corporate Communications. Please go ahead, ma'am.

Julie Lorigan

Thanks, Rocco, and good morning, everyone. first earnings FAS webcast. call Chico's to quarter conference XXXX and Welcome

and Chief me Store Broader, are Officer; National at our Vogensen, Center Executive Joining our Myers Support today Officer. Financial in Fort Chief Todd our Shelley

found Our at our Releases. www.chicofas.com can Press website Relations, in earnings Investor today release issued be under

only assumptions, date. today's and and judgments projections our business you Let include statements estimates, me that caution today's about plans, forward-looking industry, as which speak our will comments our of current expectations, about

You made rely results obligation Shelley. disclaim are factors events that, our those unduly morning, included information And call. should and could to that I our this may implied revise issued are except or in any from law. turn Important comments not on to in SEC to on or statements. otherwise it forward-looking in on any release our this materially cause call be by with will or discussed actual as statements that projected We update earnings forward-looking by this differ required the over filings

Shelley Broader

good Julie, morning, and you, Thank everyone.

in we development channels. about ShopRunner, Before first want update making on new quarter, to of the response segment and initial QVC, talk we considerable I the on We are previously we which recently airport, a on and we in amazon.com. you pleased are sales cruise now with progress ship give and running new the launched aired brief addition announced. our we these up These to channels. partnerships are are to Overall, our

first of period, have the quarter, not that quarter in had sales results. trends and to House experienced shifts. That acquisition, a Black of brand. in have in traffic multi-channel From seen across traffic that a into internal offset indicator growth we lower the | calendar the about earnings later factors perspective, strategy. we decline improvement Early our and meet which driver more White an challenging of the we customer flow positive The in but talk first was and in expectations. did comp both primary will we our call, planned customer we our which We is and said, demand a enough external internal attract our Market, was the result not newness Chico's assortments and did both determined an

the strategy which While we to new that on more of quarters. merchandise our will allow sets, to new and supplement capsules robust we need reflected deliveries confident remain floor live sales in be our in frequent floor, existing we've more the future longer to merchandise learned

In addition, business. based on on analysis, an weather had an impact overall we unseasonably know the snowy and adverse independent third-party that cold our

delivery on factors, inventory any We have company. year-over-year anticipate and that vendor promotions utilized transaction front. also certain resolved, management at and per the shopper sales. increased we Chico's issues to delays leveraged our strong business to across drive To mitigate units these and which the improve higher conversion, been vendor targeted experienced capabilities impacted issues negatively disruptions further The execution that not do we our brand and

and second a actions, these a the through quarter As moved result of inventory successfully we in position. clean entered

healthy Although saw in is overall we for traffic, and year-over-year impacted that business. accretive our was growth grow our consistent channel. by to business DCOM sales a also DCOM us and soft is channel

sales. integrated initiatives while to results these consideration, appears merchandise the be drive our building Turning improved campaign now not yet to Chico's, brand fully has to by increased and matured brand; at have enough customer

offset the helped Our in strategy some to traffic decline areas. mitigating

to appropriate and and business. drivers. we adjustments we example, dresses, progress, jacket made to delivery saw per Pants, results have and our see Travelers key For similar believe increase reinvented with a denim in including to in fall when be skirts improved we we nice transaction continue the in units jewelry, conversion works to tees, the as

extension an new assortment artisanal of prints its online, home this tabletop collection accessories and an a with beautiful introduced bold gifts. a we're frames, and items, leveraging Chico's brand, initial along of the expanded As selection test, recently offering to colors. With

rolling to updating the time on We out select quarter. are this next results also in look and collection forward season stores fall to for you

traffic. Turning Comparable in incorporate they Chico's to and sales good the team White progress the trends is improvements operational House improved Black making brand. from as Market, the learnings both despite merchandise difficult

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as our customers' versatility and shown The between are purchases. offered, evolve, White our we merchandise other assortment including continues House up in research for and looks where with Opportunities will area, what and in gateway deliveries to needs. more flex Our has and that primarily customer that optimistic are down. these than be line underserved that a items Black fall the will dress items more polished dress is Market the serve for casual we've stronger

anniversary our the Moving to Back Vanishing did challenging Soma, bra. first anticipate of we a we updated quarter as launch not

successful you was history. in Soma launch most it the bra As remember,

our in we sales and to foundation to track sleepwear exciting loungewear of business continues other brand. We're difficult. Cool our on while our performed drive be overall a refresh trends addition, the for will to have Nights full initiatives and believe In deliver that stronger fall the expectation, loungewear

structure and that more testing has innovative excellent but response received campaign. in Specifically, and support the throughout the bra offers launch wider early We'll fully integrated a In In we new Bliss, is Bliss comfortable. marketing launch June, with will customer comprehensive a phase.

multi-platform with QVC. is the initiative new exciting our retailer, Another for relationship Soma

QVC for additional on bra of back Soma's strong Back a panty, Soma We've the drove Vanishing May awareness new on our planned top we in both into traffic products already of our track with Embraceable year. event featuring from that out initiatives, into We And believe and stronger Cool successfully debuted this Nights is exciting, with are half in of QVC segments increased collections. improving. the Edge year, minutes. the X for and merchandise stores growth line Vanishing, also Vanishing and website. matter our This which the sold customer on first our and

in sales Turning to other Black petites for House be the across and in White sizes, update approximately quarter. strategic Chico's incremental continue on to generated our the initiatives special organization; and Market $X million strong in

tests plus In X our addition, X.X, sizes, X.X, sizes which extended equivalent size online to we conventional expanding or XX. saw brand includes X range results Chico's of from of our positive and the to

Given to these approximately plus XXX announce we our we results, that extended rolling are size Chico's pleased are positive stores. range to

increase retailer. continuing converted integrated Locate our we're we enhanced omni platform the are In to journey where a Next, stores Tool, in to new, XX% a seeing fully become fully orders. customer we're

store. in-store enhancement directly aisle through merchandise beginning out from us We're the shared track ship August. from an This distribution our will center endless either roll customer Locate to on our in Our Tool order another return inventory and leverage to a to fully system our and purchases ship center sales enables fleet from utilize to a our for This enable and store. a customers. to management inventory center, goal as online for advances connectivity store improvement center our distribution or our

of in Look enriches gets recent one-click button, base Another our customer our omni all add any the a the experience. launch immediately all of an shopping this development XXX The outfit brands with is photography, desktop cart. Shop outfits and The We're capability. with Look, view quick our testing mobile items customer and Shop leveraging or across to through functionality over a We're and which can

creating she online with wants. our technology amazing merchandise whether and or our wherever, experience, to investments however, a customer Our focused in on whenever and in seamless stores, access are

in customers talked drive are to their of solid step reality. Soma about important we're and sales another venue and and these customers new new us While today's we're QVC profitable growth introduce I and development phase, will sustainability we earlier. test updated. at to taking initiatives Establishing is channels choice a and our meet retail keep you progress, making that in

the all over launch, initial In we ShopRunner through exceeded for Since generated addition, successfully for ShopRunner. launched the of brands, end March already have and have in year. the sales sales million $XX plan at we our

first location roughly the domestic of anticipate excited to will value non-ShopRunner Our House will running higher Soma signed Stellar Market a be up January The We're is single Partners we've XXXX. XX% definitive | in with average that in a products White airport, to announce be our In orders. and location and airports. than for Chico's, Airport. brands International be our a agreement in represented We offer Philadelphia store will Black by space. mix of this order

merchandise is and or and bring stores to open And a to our per plan prime our the X testament Chico's expectations our specialty potential. our Amazon amazon.com. growth customer would finally, to Under control to apparel by with pricing the integrated fall, margins perform continues we Rack the business ability return the of transaction. year. one chicosofftherack.com vertically brand launched our Chico's FAS promotions, total the boutiques. which to This to Chico's above healthy eligibility, Our the Amazon, few on the very and end one of units with will with of marketing, over of is stores, retail the and maintain any has agreement uniqueness X directly which we Off we've partners new

variety to in moving present companies at and in results, In customers customer with We We for wherever can thinking response forward and accessories a consumer that and is and should her term. to support strategy a and talking this and multi-channel believe and apparel want increase adjust Although dynamic brands strategies we're and through needed strategies customer we improved in our it's our meet to remain shows as new quickly ultimate calls. confident new our this competitive for and that the partnerships. this to chooses. more future we in broad to support we're actions on in environment. with We're partnering early she new accessibility. business in position channels our channels We're sales, we're look for position about taking. to positive reaction. best innovative initiative long confident stronger that the too and with response point retail strategy our implement We're meaningful refreshed the omnichannel working plan future, continue learning, conclusion, of We're our our introduction forward and thrilled

Todd to our financial over call the for more turn details I'll Now on results.

Todd Vogensen

Shelley Thanks good morning, everyone. and

while comps per earnings did Shelley Net progress in to made our start and As meaningful initiatives, on of to the long-term year, were both share. first decline external sales mentioned, internal and and $X.XX we from we challenging a have resulting our a below traffic transactions expectations due customer factors. quarter reporting

basis analysis We the us brands, see and third-party our successfully margin inventory, action point weather Our back took program gross the clean merchandise adverse inventory quarter down through trends the expedited X.X% year, to however, X the to We deleveraged basis with in due in tight promotional showed new, and spring reflecting was ShopRunner. compared management. and our shipping XX continued ended we impact to and points. did sales enough quarter. get improvement our launch across on mostly to inventory, that increased not Overall, an margin levels. percentage anticipated but cleared of support to approximately activity a XX last points the achieved We implementation improvement for in the a of quarter

costs new provider the We that have shipping normalize going our of completed and implementation capability a will forward. service

expenses. SG&A to Moving

and was SG&A last or with increasing million up line X.X% in investments quarter year, in $X.X expectations, both reflecting planned technology. to First marketing

we previously merchandise anticipate additional this As have discussed, margin year. grow to we opportunities to continue

our position leverage to positioning brands across and vendor shared the a model. consolidate through We further services are better to our fabric list in

saw quarter, continues year's which a in average and trend. first favorable progress cost the making decline are We unit in last

Our $XX balance quarter ended sheet $XXX debt. the remains in million we and in with strong, short-term investments cash million and and

technology. First expenditures in $XX million, and comprised investments mostly stores totaled quarter of existing capital

of approximately we capital close stores, For approximately quarter, first million track to the total million. year, where while stores advantage lease of anticipate year In and expenditures to we on taking XX the closed this we're to possible. X $XX of short-term select, XX a extensions $XX

terms. favorable negotiate We our pursue continue to to actively more enhance portfolio opportunities and

and comparable range expect in compared fixed to and the to low- quarter is quarter. less we second to quarter new second full range last outlook be we out high deleverage to as in and and margin, single-digit year. net Next, our the we're we solid trends At you first in spring this to product. I'll to We close with gross modestly to anticipate invest sales for season costs by typically compared down anticipated for to sales merchandise to technology. in time, SG&A be the clearance improve margin This rate update planning compared be financial in mid- on the second year. With we mid-single slightly to this where year, approximately down to last a dollars growth Also offset marketing the period expect digit in flat. continue up mind, flow quarter be

continue the our White brand Black president with performance Chico's marketing continues deliver merchandise expect | assortment Market offering a Soma we laid at fall and out year, of second improved by great brand influenced the of products. House its and campaign half As new refresh we to themed beginning bold as the new

the similar we outlook very quarter. outlook provided half last Our to full is second year

in compared As to last range. year, we down expect the in down to comparable range, the the full sales low the anticipate to such, and be the net of we week, XXrd year mid-single excluding for to sales impact digit mid-single-digit be

be margin of points, We flat. anticipate to expect be to rate dollars in to we range gross XX approximately basis the SG&A XX and expansion

to call the for back Q&A. over Julie turn I'll Now

Julie Lorigan

Todd. At So back be proceed. to to Instructions] this questions. would we you, take I'll [Operator to over turn happy the Thank time, call your Rocco

Operator

FBR. [Operator question Riley Instructions] from And comes today's Anderson B. first Susan of

Susan Anderson

products? light to first margin was than merch in front, clear you wanted expected on transitioned, second on impact quarter? much margin. bit sounds complete? planned the ask more to had in or that's expected? costs, through given or gross also the that the margin to it going a that this the where any then there you On pretty is And did this was some like gross pressure quarter And Or come Did but it is shipping be I in

Todd Vogensen

within it results still as than lower did as planned, merchandise we for. was cost had as down clean worked margin bit a gross our mentioned the was February of what off we in we what we something more therefore, make margin result been bit they up do. And being gross On little than a planning we what margin, of intentionally good always savings initiatives, being unit little that's with end margin and being a expected. get But and, had lower sourcing our clear to than average We through great were, inventory, that we unit our promotional thing. lower so margin that, merchandise we we merchandise on expected a sure yes, did had that, be we to retail to and average that did get And inventory. a did

You shipping. the mentioned

ShopRunner, would the in we quarter, would in did more launching think an forward. And we service process. expect should pressure ShopRunner of of generally, was expectations and volume. say, second shipping done as our quarter that very the were definitely go just the for second provider to expect yes, -- of new be so terms has issue we not I launch. to just into And that to ahead we address everything been going efficient we process us we've this on And in that, the and I as related a program

off been very good certainly that a to partnership with start. happy So we've and

Operator

Lorraine question Bank Hutchinson America. next of of comes from today's And

Lorraine Hutchinson

had average $XX plan. upon in million benefit of still those your us. if Todd, being I and sourcing vendor your then wondering in just that cost or is $XX bit million you just you could expand if Chico's And issues the to also, unit was a behind confidence at that

Todd Vogensen

Sure.

into something is that So average unit still the absolutely the first, Yes, that plan. baked is on cost.

progress, We a seeing and operating been area that we that efficiency-focused had talking great about part quite a about which of are while. talked for is have

was million that of place. identified trending $XX plans savings So to benefit. sourcing those we $XX something put Still of in ago a towards had couple that all and years million exactly

with able have worked vendors things, about that going we've the the vendor different lot together issues being course forward. We through been that place of an do have of it. came the of issues, delivery really plans terms to A feel a with we in probably variety quarter. more of up much issues over In it was most relationships strong so accumulation timing of and important vendors, our put confident very our

back and have work talking difference very strong We have one have much in vendors, can seen come we've things to we been make any vendors those it we have up. a we consolidating of Going that that that focusing are do partnerships vendors on issues sure resulting absolutely we to to the us making the and been with, those that things and key with that about, as resolving is come those true up.

Shelley Broader

process as Todd the elements very really for just we so about last continue the talking AUC done and been very ago, design model. have working and meaning vendors conference focus at our beginning, done in AUC here weeks and Myers not down for of or way, services I from a Fort to And the sourcing right only just the to hosted the AUC shared the at that garments. years, and And not on dozen about we X end the a few top dump of vendor much

can from and business consolidating to piece negotiation So from House a factories vendor positioning our White partnership benefit Chico's, and Soma enhance from together, their meaningful we powers. together very where where be booking do of fabric

Operator

of from comes next question And today SunTrust. Quintiliano Pamela our

Pamela Quintiliano

if mentioned just you're flowing could then talk have is capsules you the more last regarding you a has outlook. and that? weather is to newness timing then perspective frequent traffic year about And for one talk And in you the about just your seeing First also question us I normalized. as from quarter-to-date of more what you Can often. full the

into If you'd dig a fiscal the bit guidance. more

biggest the learnings to what's House, at and the from you? really White across for prior but relative the Chico's divisions Looking expectations recent change

Todd Vogensen

Sure.

You Pam. bet. Thanks,

this quarter-to-date. traffic played quarter. of say plain other really weather, about talked a quarters. the see with that things, fair do that to I very start think opportunities out So just it's through We had other we among it's of number volatile the And the been course

yes, As forward, we're issue trends May part as half. of expect us weather to improve overall the we the going then and abate. the second into we modestly to do go into would comp into and second that quarter looking That's towards

shifts the capsules, the us of terms talked to of about for timing really to align things the amount the we've we've In floor that big fair set and a our done one when is adjust of timing of with that shopping those customer results its are really full floor. that seeing that, shifts. to And goods had sure absolutely make right positive our is allowing up-to-date was price the we've on decision, live longer we the on to

This impact normally it have or in has we've didn't have past. quarter, the plans the as same we built that in had would some, well, just flows that

around. wrapping wrap at around of of just the So as those I'd that's a also set this we say on tend point. them impact the to changes, point to we get floor learning But

learnings as have just we we more impact, them. not improving about as and direct go much So there through any is it's

Shelley Broader

floor the true living showing think full-price Todd the the customer that sales we garments said, added -- Yes, to value. tremendous newness, on did of very on has the and be Pam, longer proven as amount I analysis

where to strong the As drop previous see appearance not the in sets cycled those in. we've customer where and that, through where of had our that's newness calendar enough, starting the just floor capsules we're now we is we to spots

Todd Vogensen

It's I QX and of timing to outlook confidence your the full a give had fair very in last And think us lot But in want a a was we so popped and that the that year the realized one improving very we're quarter -- that around first quarter the does course we say now through us season ourselves. again, were ongoing through question was weather, that continues and that And didn't could the to we that lot the of for relationship of second do. will things delays, which say in what much be ahead strong, part things our to of also trends. box the and And could issues we quarter between vendor of impact is the the year. around, are QX not up that half, we the not of second quarter. second were things in a that traditionally confined set, floor get put positive QX things second

look things we as Locate So as go we if stronger and get the ShopRunner, get -- year. anything, that, at are through those

in we those a So have sizes. extended lot confidence of

So online, do extended Chico's be responding. very to be to and look the X.X the continue where our Xs, responding for customer going to especially experience we well, we're to and she's who's product to stores. and we've done are and roll about as that we side testing see sizes that XXX that expanding size positioning out of spectrum, at the we other as Also petites that in going

as just of that one a and confidence not in us does tailwind go been that's that give half year. have more So the we might the little there thing earlier second bit into

Shelley Broader

our And right. presidents, more of piece is of just X subjective X for brand another the the in chair time

So and presidents. both brand Black very | House relatively, White if at not Soma got we've at Market, new,

additional Mary We're impact time David. and from chair. that already just in seeing both So great

Operator

question today And from our Instinet. Simeon comes of Siegel Nomura next

Julie Kim

you overlap just customers? from secondly, ShopRunner have outlet of is performance seen versus across current channel your you're seeing concepts, channel? full-price Or the any Could Kim you customers This seen own diversions color about of the your outlets on there And up just thinking on how there? are whether increased you've any stores trends different it forward? give the and Simeon. And is Julie following your going spend partnership, for you with on e-comm

Todd Vogensen

you, Julie. Thank

I very versus price outlet. say similar reasons. overall, So full trends first, And different would for

channel, outlet spur things to are the really doing With we demand.

us You much new stores. Rack is in more and are in value heard good that that don't our Those on geographies are And that. stores. launching that regard. isolated for then a The plan necessarily And seeing about I'd they're are that are stores offering based, we are results impact offtherack.com, Off full-price more above that which say

so us. from have very And that they've that has us At and for full-price generate what results, to revenue, positive extra same been. allows time, the that been tell stores, you our can been

And those out X tend fairly to other lead results. each of to so the consistent and things balance

In terms first. at back -- a of the I'll ShopRunner pleased we've and one ShopRunner, thing step take probably particularly been with

One low that that of analysis of versus the fairly in overlap. was did shocking it us how ShopRunner third-party of did was customers to our the our customers file. a ShopRunner not overlap. much did about number file Actually, analysis things opportunity these is was we appealed of -- It terms that

new we a file So are brand it, not we our into surprisingly, And file. we and coming really forward. coming we've leading as amount into gotten critical before, positioning for of sales indicator said the customers healthy a seeing the is as as that customers of go through new

to and going the have we and awareness also forward. customer that just customer consideration new build been way trend So new about quite general pleased the

Shelley Broader

items can Most And to that decades' are retailers we for in only center know built unique of ways, that fact you committed our customers, summer, intersection the And experience FAS that that of all a customers later our that's in-store channel coming data from our on of focusing that Personal digital digital and but we're in Chico's new Service combine way outfitting, of that the Amazing provide not customer-specific our as at worth that other bringing, around you When replicate. our of store physical. digital and from very Shop really intersection that servicing we're it enhancements of opportunity the of kind can't fleet. distribution And unique the Look The boutiques look our having on into about is, and we strategy, file many physical. still locate with around can we alternative

not functionality give So partners our like Amazon like like only great to an introduced us not that be may inflow of new QVC, ShopRunner, otherwise brands. customers but

Operator

comes next from Paul of today Lejuez Our question Citi.

Unidentified Analyst

Jen if by of about you transfer I Wondering had rate? quick anything just you new And It's sales talk class could on a then share question stores. on Paul. for could on Soma comps. that

Todd Vogensen

Sure.

we Soma, we the from Soma. big very year, last that probably around For biggest talked wrapping about for are a launch on ever

going would that to performing So Also always loungewear was perspective, where a a tough was category not from just be compare. expect. we to

what those issues of so And that is class means particular to store. are one not that are

second we those our so sales a rate. question fairly because And transfer saw base, And -- relatively, that was and performance across issues those really your consistent are consistent store issues were was across our stores.

very much a as further don't our few very do store in Stores off more rate, sales well not our of sales transfer. that we've sales suburban surprisingly, locations fairly gotten being quarters for is really program, ending much are remote, optimization bifurcated. So talked transfer into Stores about that very transfer. that are we up have

update And the of what total good the more. we're we was, just a number mix want our little get to And at learn just program, both. getting so it. pretty had look a we and further and last last updated was we to this -- time we'll so But as bit watch Analyst point, we at into Day,

Operator

today question Deutsche Bank. Paul Trussell next of our from And comes

Tiffany Kanaga

Paul on Trussell. Kanaga Tiffany is This for

compare across on new new and you're these units how comments. in touched about acquiring your size, customers sales key you the other terms talk to transaction metrics? with you ShopRunner that shoppers channels? what basket it But know of the You would And your per base also about of demographics the

Todd Vogensen

Sure.

from a behavioral anything So targeted go into I we a perspective are did customer, these as we as new channels. we much as -- certain think,

Soma. so may should where But signs in for House, getting. for be that being play we as core the for out is that early, are that it's for the demographics. And but see customer that, And seeing characteristics is critical Chico's, terms behavioral we're somebody we of really, what White

we purchase rate pay XX which to, assimilation a of something second for a within when you that Our attention back lot days. you make come purchase, is effectively is

We are myself. ahead. far very are is that programs we strong we But the are in ahead seeing -- And get these early to bringing too trends I in that don't in are that so want. new go process, want that initial customers of

Shelley Broader

detailed very with No, our early results of looking that those as customer partners that and us, targeted bit. whether and at analysis ShopRunner. down being the on we gotten early, at But than spend I for that have very looking a we again, be and customer, say, other who will overlap our increased customer good we've they've so fact the And had the results were were pike overlap demographic. knowing

Todd Vogensen

customers. up. you ask And about spend overall new for did those It's

overall So about up our is a little compared ShopRunner new XX%, spend for the more customers size. our transaction actually than to using XX%,

that, those So again, a good customers. leads the to indicator health overall of of

Operator

Today's from Shapiro, [Operator Tracker. question Retail comes Instructions] next Marni

Marni Shapiro

through to issue Did the like the to just it that talk this different little that Chico's then forward? little a Is could some was a close sell expectations bit there? factor at about continue And to in sounds the really it product there? this hearing between you well I was online Soma of more like, Chico's given in to is X? very the dive about versus maybe holding it Did stores mitigating go as the bit Bold the noticing campaign. going and this right, do to. and you because finally, around something actually you're on you can a I'm product results marketing a I'm traffic in-store, used If if traffic least And more

Shelley Broader

I'll Todd come start in. and let

the as we sure the very well has So of target to about continued making through an see. she sharpening last that have and and doubt. those full think, of in without product. edges brand's part has sort our and And good we responding on year, the the and been of retail team drives done, it extremely And talked and product brand unit repositioning she looks as Diane on I your excellent through that read outlets product. many the think sales that We and were we've traffic -- the brand and stores job responding, hitting a was customer, we can reports number very been

Todd Vogensen

to what is we to is campaign point, for And resonating. of those up. product both the the a up. your theme resonating We're conversion It -- product indicators that she she around seeing units be are to of campaign. that, We're is are us doing from committed transaction Yes, in, continuing with when her. perspective. seeing with Bold key marketing per rebranding the want And we comes

So...

Shelley Broader

brand, the And Bold and the it part of customers. of that, attention we're of Bold the certainly about Chico's and was to reintroduce was new campaign brand, the and vibrancy we're Chico's seeing the considering that very And the brand with to consideration, newness brand but that. the brightness aspect the thinking happy of people the and to role not only draw to introduce also

Marni Shapiro

product I'm fit the dressier product she's been come and touch that a what's trying just bottoms this going great you? I'm items about as cycle through on you've did Is little curious, you because the really? denim. from that statement. it with the for a can there great. to You've talking having a it That's seemed just Is And -- issue? issue in quite bit, looking also? just it on with an made look really understand

Shelley Broader

had We big some introductions product year. last

And the really introduce think on I well. there's we a went girlfriend that we newness and as [indiscernible] on need remember, to you bottoms. If really the on what component to then hard pant

Marni Shapiro

So the bottoms not already that enough -- maybe she like it. flow newness. there. owned didn't Like less of and more problematic the product She it something that and new what less replace was were wasn't problematic? Not was is that it to there

Shelley Broader

Yes.

Todd Vogensen

think we're sudden, traffic, the you I midst a up mentioned, of in campaign, where as surprisingly throngs is first generally that at not marketing show your fair. build like rebranding, that. light that's of yes, front all do it's as out you the and not people we a at look a There And campaign rebranding time, door. go that of have you happens over switch and, there a

what numbers feel like So and should traffic also seeing we those why in it's numbers the time. part you're traffic over improve of

Shelley Broader

is ankle mean, lengths pant in additional those the year, And looking we're last silhouettes. and I customer and additional as for was introducing hot pant some also really now additional the we're so silhouettes and bringing well.

Operator

question of Edward KeyBanc. our And from Yruma comes next

Edward Yruma

to as stuff in the brand Lots changed of to to any QVC. under quarter? customers Do marketing, it again, a you the you the quarter, do be induced that like Amazon with your that need introduced? of and right? with these ShopRunner, the you or And think would follow-up, initiatives point that to be has could think way, way introduced operational something missteps all kind then

Shelley Broader

number and we're the I'll part initiatives, be and of I know that distracting when a go new could core look to happy exciting seem aspects first the doing business. you back. of what lot take there's second at then to which to

of to that been we've of last think, I think is proud several one do. very ability over our the sort thing years and plan

we're the So, focused years we that about we ago my year strategy talked and was year was that in alternative those first X and many and third year, have to initiatives going was in identifying to savings this about cost issues, of here, an the things were third doing operationalizing into put SG&A year the second those sales. starting year place about about that

group with And -- the business development group on so the Amazon, core with been and others relationships very years carefully. by last have over these planned over in ShopRunner QVC, and worked next X our with a

fraught and execute the kinds and with the really exciting these. built of and to new all strategy exciting machine anticipation, although launches So and we've

focus lack and learnings, operational concern or operational these missteps absolutely. not in QX moving But won't So for of be initiatives by was a forward. us --

Edward Yruma

of And the first the part question?

Todd Vogensen

me? the of repeat part you question Could the first for

Edward Yruma

channels, to move, Yes, changed alternative the it's it sales would brand? something just introduced a behavior understand to like seems in to that all needs if and be changed. do of has proactive with I the think has customer consumer you way the you the you marketing, do say or -- to also likes think think but just trying

Shelley Broader

tree. monthly. And of work get I mean, ad so that that your -- customer the think and as the X customer How I changed will last which is on your I building dramatically key. mean, does customer -- almost campaigns brand? has that have decision awareness. agility years a we is, introduced with get done, a X like enormous customer brand to a trying kind it's I I think journey think over years to to continue change ago, you TV were

on your a were somebody of to to You try left to make a the through incredibly get hard storefronts working right walking instead mall.

storefront All are walk are will acquired not -- still since on of many TVs in turned their be there important, by things these and that but haven't our customers to XXXX.

alternative got is: customer she's on bring have -- so brand into we she she's if she's that a like if affiliate unique wherever if that if Twitter, that find And our prime on we ShopRunner, and customers on to to the she's Instagram, on brand with she's ways has she can journey shops member.

We Service. a continuously we to and that with same how Most our to differentiating working get off at have chicos.com, experience consumer changed also what's the whitehouse.com, our make Amazing along her our our in-store experience the the they and know for store we've proprietary absolutely, own have is reason our is And journey couch. we purchase. system and got But Personal chicosofftherack.com. our consistently And So know improve harder, to just travel changed. things same to

We affiliating a interactive, now ways hasn't where a introduce been either never or where brand, to journey stores customer people her. them unless younger reintroduce may our find intersect ShopRunner intersect their with customer tied our with those intersect And have we our unique customer make brand stores. other seamless, with may our -- to who our our in we're to decade brand. in A prime never may never with to new and

think Ed, taking I ideas, have own great to a that It's right risks, has agility, some convince beautiful everything if value, even and all I in. you innovative with So compelling channels product product can't the key -- don't your brand come to and at them a first. you is these changed, working think winning on

our phone that them today, the products. good our through affiliates that issue about brands year feel And that very about said, improvements about through I'm boutiques our like the leaning excited and is edges anything. too and websites. driving our of to or brands, you. our I'm to as sharp in line to way Not the a our this got So we we've we've half

Operator

conference like the And concludes turn to ladies and gentlemen, session. to back this over for Julie the I'd remarks. Lorigan closing question-and-answer the

Julie Lorigan

turn I'll comments. now back some over And Shelley closing to Rocco. you, Thank Okay. for it

Shelley Broader

Julie. Thanks,

And a in win, and brands FAS to discussed we're drive at are first just that we well so digital winning of right So to steps taking and sustainable, challenges positioned to we're environment that Chico's evolve successfully growth. we physical. we poised the and that did believe long-term, profitable retail conclusion, challenging the we the while on have our this intersection of plan quarter, meets new we

a have So you us, much for great joining very and thank day.

Operator

attending you, We all presentation. Thank ma'am. for today's you This concludes today's conference. thank

and now have day. disconnect a may your lines, wonderful You

Chico's Fas (CHS) 30 May 182018 Q1 Earnings call transcript