Chico’s FAS Inc. (CHS), the women’s apparel retailer, posted better-than-expected first-quarter 2010 results on the heels of lower markdowns and improved fashion.

Quarterly Performance

Chico’s quarterly earnings of 11 cents a share, which remained in line with the Zacks Consensus Estimate, climbed 9 cents over the year-ago quarter. The company has topped the Zacks Consensus Estimate for the past two quarters.

The company delivered total revenue of $410.6 million, which was up 17% from the year-ago quarter. Direct-to-consumer sales posted an increase of 31% from the corresponding period last year.

The operator of the Chico’s and White House|Black Market chains registered an increase of 14.9% in consolidated comparable-store sales, helped by a 14.8% rise in comps of Chico’s/Soma Intimates brands and a growth of 15.3% in comps of the White House|Black Market chain.

Chico’s also delivered a solid gross margin result, improving 170 basis points to 58.5% in the reported quarter. The company notes that lower markdowns at front line stores, higher initial markups coupled with impressive gross margin at Chico’s outlet stores aided the gross margin result.

Fort Myers-based Chico’s reported income from operation of $55.5 million, up substantially from $22.8 million in the year-ago period, reflecting double-digit growth in topline, partially offset by higher selling and administrative expenses.

Financial Aspects

Chico’s ended the quarter with cash and cash equivalents of $481.9 million, a debt-to-capital ratio of 38.5% and stockholders’ equity of $1,006.9 million. Capital expenditure for the quarter under review was $15.3 million.

Store Update

The company’s Chico’s brand currently operates 598 boutique and 50 outlet stores, White House|Black Market runs 334 boutique and 17 outlet stores, and Soma Intimates operates 100 boutique stores and 5 outlet stores. The total comes to 1,104 stores. The company has operations in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.

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