Chico's FAS, Inc. Reports First Quarter Earnings Per Share Up 23% To A Record $0.32 -- 13th consecutive quarter of double digit EPS growth

-- 9.6% comparable sales increase - 12th consecutive positive quarter

-- Record net sales of $651 million

FORT MYERS, Fla., May 16, 2012 /PRNewswire/ -- Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2012 first quarter ended April 28, 2012. 

(Logo:  http://photos.prnewswire.com/prnh/20110920/FL71045LOGO )

Net Income and Earnings per Share 

For the first quarter, net income was $53.6 million, or $0.32 per diluted share, compared to net income of $45.9 million, or $0.26 per diluted share for last year's first quarter, reflecting an earnings per share increase of 23%.

Net Sales

For the first quarter, net sales were $650.8 million, an increase of 21.2% compared to $537.2 million in last year's first quarter.  The increase reflects a consolidated comparable sales increase of 9.6%, an 8.0% increase in square footage and $33.7 million in sales for Boston Proper.  The consolidated comparable sales increase of 9.6% for the first quarter was on top of a 7.7% increase for last year's first quarter, and reflects increases in both average dollar sale and transaction count. The Chico's/Soma Intimates brands' comparable sales increased 8.8% on top of a 7.8% increase in last year's first quarter and the White House | Black Market ("WH|BM") brand's comparable sales increased 11.3% on top of a 7.4% increase in last year's first quarter.

Gross Margin

For the first quarter, gross margin was $378.6 million, an increase of 19.2% compared to $317.7 million in last year's first quarter.  As a percentage of net sales, gross margin was 58.2%, a 90 basis point decrease from last year's first quarter, reflecting the cycling of 2011's four-year record gross margin rate, a more promotional environment, and the inclusion of Boston Proper's results.

Selling, General and Administrative Expenses

For the first quarter, selling, general and administrative expenses ("SG&A") were $291.7 million, an increase of 19.1% compared to $244.8 million in last year's first quarter.  As a percentage of net sales, SG&A was 44.8%, a 70 basis point improvement from last year's first quarter, reflecting leverage on store expenses from our comparable sales increase and the inclusion of Boston Proper's results, partially offset by higher marketing expenses and increased performance-based incentive compensation. 

Tax Rate

For the first quarter, the effective tax rate was 38.0% compared to 37.3% in last year's first quarter.  The effective tax rate for last year reflected favorable state tax settlements.

Inventories

At the end of the first quarter, total inventories were $213.7 million compared to $198.5 million for the first quarter last year.  Inventories in the current year include $13.6 million of inventory related to Boston Proper.  

Outlook

For fiscal 2012, including Boston Proper, the Company's planning assumptions are as follows:

  • Net sales increase at a mid to high teens percentage rate to approximately $2.5 to 2.6 billion, which includes comparable sales growth at a mid single digit rate, approximately 9% growth in store square footage and approximately $30 million in sales from the 53rd week; 
  • Gross margin rate down approximately 50 basis points;
  • SG&A expense, as a percentage of net sales, down approximately 50 basis points;
  • Effective tax rate approximately 38%;
  • Inventories in-line with sales growth; and
  • Capital expenditures approximately $150 million, which include 120 to 130 gross new stores.

A conference call to review the first quarter is scheduled for today at 8:30 a.m. EDT.  A live webcast of the call will be available at the Events Calendar page of the Chico's FAS, Inc. corporate website, www.chicosfas.com.

ABOUT CHICO'S FAS, INC.

The Company, through its brands – Chico's, White House | Black Market, Soma Intimates, and Boston Proper, is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items.

The Chico's brand offers women a combination of great style, one-of-a-kind details and warm personal service. Chico's currently operates 606 boutiques and 86 outlets throughout the U.S., publishes a monthly catalog and offers round-the-clock shopping at www.chicos.com.

White House | Black Market strives to make women feel beautiful with apparel and accessories in the honest simplicity of black and white and the individuality of styles built from it. White House | Black Market currently operates 376 boutiques and 31 outlets, publishes a catalog highlighting its latest fashions and connects with customers at www.whbm.com.

Soma Intimates offers beautiful and sensual lingerie, loungewear and beauty. Soma Intimates currently operates 180 boutiques and 15 outlets, publishes a catalog coinciding with key shopping periods and sells direct-to-consumer at www.soma.com.  

Boston Proper is a leading direct-to-consumer retailer of women's high-end apparel and accessories. Boston Proper provides unique, distinctive fashion designed for today's independent, confident and active woman. The merchandise focus is about creating a daring, modern style with a sensual feel and is available exclusively through the Boston Proper catalog and website, www.bostonproper.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995  Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry.  There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur.  Users of forward-looking statements are encouraged to review the Company's latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's latest annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition.  The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.

For more detailed information on Chico's FAS, Inc., please go to our corporate website, www.chicosfas.com.

(Financial Tables Follow)

 

Chico's FAS, Inc.

Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)






Thirteen Weeks Ended












April 28, 2012


April 30, 2011












Amount


% of

Sales


  Amount


% of

Sales










Net Sales:









Chico's/Soma Intimates


$   425,342


65.3


$     374,934


69.8

White House | Black Market


191,727


29.5


162,224


30.2

Boston Proper


33,748


5.2



    Net sales


650,817


100.0


537,158


100.0










Cost of goods sold


272,221


41.8


219,495


40.9

    Gross margin


378,596


58.2


317,663


59.1










Selling, general and administrative expenses:









Selling, general and administrative expenses


291,676


44.8


244,845


45.5

Acquisition and integration costs


558


0.1



    Total selling, general and administrative expenses


292,234


44.9


244,845


45.5










    Income from operations


86,362


13.3


72,818


13.6










Interest income, net


183


0.0


400


0.0

    Income before income taxes


86,545


13.3


73,218


13.6










Income tax provision


32,900


5.1


27,300


5.1

    Net income


$    53,645


8.2


$      45,918


8.5










    Per share data:









Net income per common share–basic


$        0.32




$          0.26












Net income per common and common equivalent share–diluted


$        0.32




$          0.26












Weighted average common shares outstanding–basic


163,974




174,881












Weighted average common and common equivalent shares outstanding–diluted


164,876




176,112



Dividends declared per share


$     0.105




$          0.10



 

Chico's FAS, Inc.

Consolidated Balance Sheets

(in thousands)








April 28,


January 28,


April 30,


2012


2012


2011


(Unaudited)




(Unaudited)

ASSETS

 Current Assets:






     Cash and cash equivalents

$         147,077


$           58,919


$         123,409

     Marketable securities, at fair value

193,446


188,934


442,815

     Inventories

213,676


194,469


198,544

     Prepaid expenses and other current assets

50,973


55,104


45,150

          Total Current Assets

605,172


497,426


809,918







           Property and Equipment, Net

564,904


550,230


507,963







Other Assets:






     Goodwill

238,693


238,693


96,774

     Other intangible assets

131,022


132,112


38,930

     Other assets, net

6,821


6,691


7,133

          Total Other Assets

376,536


377,496


142,837


$      1,546,612


$      1,425,152


$      1,460,718







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:






     Accounts payable

$         147,925


$         100,395


$         129,894

     Other current liabilities

164,746


137,714


140,692

          Total Current Liabilities

312,671


238,109


270,586







Noncurrent Liabilities:






     Deferred liabilities

128,054


125,690


127,769

     Deferred taxes

49,528


52,125


          Total Noncurrent Liabilities

177,582


177,815


127,769







Stockholders' Equity:






     Preferred stock



     Common stock

1,677


1,657


1,762

     Additional paid-in capital

313,756


302,612


287,853

     Retained earnings

740,720


704,631


772,215

     Accumulated other comprehensive income     

206


328


533

        Total Stockholders' Equity

1,056,359


1,009,228


1,062,363


$      1,546,612


$      1,425,152


$      1,460,718








                                                                                                            

Chico's FAS, Inc.

Consolidated Cash Flow Statements

(Unaudited)

(in thousands)





Thirteen Weeks Ended





April 28,

2012

April 30,

2011

CASH FLOWS FROM OPERATING ACTIVITIES:



  Net income

$        53,645

$         45,918

  Adjustments to reconcile net income to net cash

     provided by operating activities —



     Depreciation and amortization

26,092

24,188

     Deferred tax benefit

(2,014)

(1,375)

     Stock-based compensation expense

5,318

3,636

     Excess tax benefit from stock-based compensation

(3,136)

(762)

     Deferred rent and lease credits

(4,027)

(4,330)

     Loss on disposal and impairment of property and equipment

1,285

1,434

  (Increase) decrease in assets —

     Inventories

(19,206)

(38,730)

     Prepaid expenses and other assets

3,284

3,459

  Increase in liabilities —

     Accounts payable

38,726

14,404

     Accrued and other deferred liabilities

36,845

29,119

          Total adjustments

83,167

31,043

          Net cash provided by operating activities

136,812

76,961

 

CASH FLOWS FROM INVESTING ACTIVITIES:



  (Increase) decrease in marketable securities

(4,633)

91,349

  Purchases of property and equipment

(40,942)

(16,208)

          Net cash (used in) provided by investing activities

(45,575)

75,141


 

CASH FLOWS FROM FINANCING ACTIVITIES:




  Proceeds from issuance of common stock

5,815

1,373


  Excess tax benefit from stock-based compensation

3,136

762


  Dividends paid  

(8,753)

(8,835)


  Repurchase of common stock

(3,277)

(36,688)


         Net cash used in financing activities

(3,079)

(43,388)


    

         Net increase in cash and cash equivalents

88,158

108,714


CASH AND CASH EQUIVALENTS, Beginning of period

58,919

14,695


CASH AND CASH EQUIVALENTS, End of period

$      147,077

$      123,409










Supplemental Detail on Earnings Per Share Calculation

In accordance with accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities.  As a result, such awards are required to be included in the calculation of basic earnings per common share pursuant to the "two-class" method.  For the Company, participating securities are comprised of unvested restricted stock awards. 

Earnings per share is determined using the two-class method, as it is more dilutive than the treasury stock method.  Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share reflects the dilutive effect of potential common shares from securities such as stock options and performance-based restricted stock units.

The following table sets forth the computation of basic and diluted earnings per share shown on the face of the accompanying consolidated statements of income (in thousands, except per share amounts):

 



  Thirteen Weeks Ended



 

April 28,

2012

 

April 30,

2011





Net income


$      53,645

$  45,918

Net income and dividends declared allocated to unvested restricted stock 


(933)

(537)

Net income available to common shareholders


$      52,712

$  45,381





 Weighted average common shares outstanding – basic


163,974

174,881

 Weighted average common and common equivalent shares outstanding – diluted


 

164,876

 

176,112

Net income per common share:




     Basic


$         0.32

$         0.26

     Diluted


$         0.32

$         0.26

 

Chico's FAS, Inc.

Boutique Count and Square Footage

As of April 28, 2012








































As of


New




As of






1/28/2012


Stores


Closures


4/28/2012



Store count:
























Chico's frontline boutiques



601


3


(1)


603



Chico's outlets



83


3



86



WH|BM frontline boutiques



364


9


(1)


372



WH|BM outlets



27


3



30



Soma frontline boutiques



164


15


(2)


177



Soma outlets



17



(2)


15



Total Chico's FAS, Inc.



1,256


33


(6)


1,283




































Remodels/












Relos and






As of


New




change in


As of




1/28/2012


Stores


Closures


SSF


4/28/2012













Net selling square footage (SSF):
























Chico's frontline boutiques



1,631,674


7,703


(2,725)


887


1,637,539

Chico's outlets



213,475


7,189




220,664

WH|BM frontline boutiques



768,442


23,578


(2,507)


4,150


793,663

WH|BM outlets



53,263


6,512




59,775

Soma frontline boutiques



326,858


28,773


(3,809)


(5,466)


346,356

Soma outlets



32,676



(3,669)


50


29,057

Total Chico's FAS, Inc.



3,026,388


73,755


(12,710)


(379)


3,087,054

 

Executive Contact: 
Todd Vogensen
Vice President-Investor Relations
Chico's FAS, Inc.
(239) 346-4199

SOURCE Chico's FAS, Inc.



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