Chico’s FAS Earnings Call Nuggets: Television Marketing and Future Guidance
On Tuesday, Chico’s FAS, Inc. (NYSE:CHS) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Edward Yruma – KeyBanc Capital Markets: Wanted to understand a little bit about television marketing. It seems like you guys have successfully flashed that and been able to raise product and brand awareness. How do you think about that longer term and is this scenario kind of incremental spend as you kind of continue to see success there?
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David F. Dyer – President and CEO: Well, television has become an important part of our marketing strategy and I would say that our marketing strategy includes a very strong television presence as well as a very strong online presence. We about year and a half ago, organized actually a separate area for — we call it social marketing. Those people would refer to it as social media. We have a vice president of social media. So I would say and we have the monthly catalogs that we’re sending out hundreds of millions of those a year, but I think you have to look at it not an isolation, but in combination. What we have found with television is that when we have a unique idea like So Slimming jeans or Work Kit we can really get the message across to the customer and what it does is it certainly enhances our first time customers. I mean our customer files are very strong as they have ever been in our history. We look at our business a little bit different than maybe other retailers do because of our online presence and some expertise in marketing we are able to look at our file as a multi-channel file, knowing that customers who shop in both online and in stores are about four times — as spends four times as much as in our online stores and that on a two to three times as much as plus the new shops only in the stores. So, that’s the way we go after it. We attract new customers and then when we get through television we increase brand awareness through television case and point Soma, but as soon as we get them into the fall then we have kind of a direct marketing plan to get them to continue to purchase from our brands.
Adrienne Tennant – Janney Capital: Congratulations on a great performance in the third quarter. This is either for Dave or Pam it’s on the guidance the mid-single digit comp for the full year. I can appreciate sort of the level of conservatism but if you excluded the 260 stores why wouldn’t we see an acceleration for the remainder of the remainder of the quarter?
David F. Dyer – President and CEO: Well one thing it’s not guidance it’s our planning assumptions and honestly as we look at it last year in the fourth quarter we were up against nearly a 9% comp which was very strong comps. Third quarter comps weren’t quite so good if you remember from last year in the third quarter we got smacked around pretty good for our third quarter results, so we were up against weaker comps. So, I think as we look at fourth quarter and with the uncertainty that everybody is looking at in the fourth quarter with fiscal issues and economic issues. I think as we plan and certainly as we’ve looked to the future, we are planning, as I say here, with one foot on the accelerator and one foot on the brake. There is no sense to plan aggressively or to get our inventory ahead of our business, because when that happens, when you plan the inventory ahead of the business, if the business does not come, you’ve got really a tough thing to get out of.
A Closer Look: Chico’s FAS Earnings Cheat Sheet>>