2014

Chico's FAS, Inc. Reports Fourth Quarter Earnings Per Share up 25% to $0.15 -- 8.7% comparable sales increase in fourth quarter - 11th consecutive positive quarter

-- 20% quarterly sales increase, including first full quarter of Boston Proper

-- Annual sales over $2 billion for first time, with comparable sales increasing 8.2%

-- Full year EPS up 31%, excluding Boston Proper acquisition costs

FORT MYERS, Fla., Feb. 22, 2012 /PRNewswire/ -- Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2011 fourth quarter and fiscal year ended January 28, 2012.

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

Net Income and Earnings per Share

For the fourth quarter, net income was $25.1 million, or $0.15 per diluted share, an earnings per share increase of 25% compared to net income of $20.7 million, or $0.12 per diluted share, for last year's fourth quarter.

For the fiscal year ended January 28, 2012, excluding non-recurring acquisition and integration costs, net income was $144.4 million, or $0.84 per diluted share, an earnings per share increase of 31% compared to net income of $115.4 million, or $0.64 per diluted share in fiscal 2010.  For fiscal 2011, net income, including acquisition and integration costs, was $140.9 million, or $0.82 per diluted share.

Net Sales

For the fourth quarter, net sales were $569.2 million, an increase of 19.8% compared to $475.0 million in last year's fourth quarter. The increase reflects a comparable sales increase of 8.7%, an 8.7% increase in square footage and $28.5 million in sales for Boston Proper.  The consolidated comparable sales increase of 8.7% for the fourth quarter was on top of a 4.5% increase for last year's fourth quarter, and reflects increases in both average dollar sale and transaction count.  The Chico's/Soma Intimates brands' comparable sales increased 5.5% on top of a 4.4% increase in last year's fourth quarter and the White House | Black Market ("WH|BM") brand's comparable sales increased 15.4% on top of a 4.7% increase in last year's fourth quarter.  

Gross Margin

For the fourth quarter, gross margin was $297.9 million, an increase of 17.9% compared to $252.7 million in last year's fourth quarter.  As a percentage of net sales, gross margin was 52.3%, which was a 90 basis point decrease from last year's fourth quarter.  This decrease was primarily attributable to planned strategic use of Chico's brand inventory for traffic-driving promotions during the fourth quarter and the inclusion of Boston Proper's results, which were partially offset by higher margins at the WH|BM and Soma Intimates brands due to increased full-price selling and effective promotional activities.

Selling, General and Administrative Expenses

For the fourth quarter, selling, general and administrative expenses (SG&A) were $259.3 million, an increase of 16.7% compared to $222.2 million in last year's fourth quarter.  As a percentage of net sales, SG&A was 45.5%, which was a 130 basis point decrease from last year's fourth quarter.  This decrease was primarily attributable to the sales leverage impact on store expenses and the inclusion of Boston Proper's results, partially offset by incremental marketing expenses.

Tax Rate

For the fourth quarter, the effective tax rate was 35.3% compared to 33.0% in last year's fourth quarter.  The effective tax rate for last year reflected relatively higher levels of favorable state tax settlements.

Inventories

Excluding $15.1 million of inventory related to Boston Proper, inventories increased approximately $19.6 million or 12.3% over last year, of which $11 million was for year-over-year new stores and $3 million was due to higher average unit costs.  At the end of the fourth quarter, total inventories were $194.5 million compared to $159.8 million for the fourth quarter last year.

Cash and Marketable Securities

Cash and marketable securities at the end of the year totaled $247.9 million compared to $548.7 million at the end of last year, reflecting earnings in 2011, partially offset by $213 million for the acquisition of Boston Proper, $132 million in capital expenditures, $183 million of share repurchases, or 14 million shares, and $34 million in dividend payments.  

Share Repurchase Program

During the fourth quarter of 2011, the Company repurchased 2.4 million shares for $25.0 million under its new $200 million share repurchase program announced in November.

Outlook

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

  • Net sales increase at a mid teens percentage rate to approximately $2.5 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 to be approximately 38%;
  • Inventories to be in-line with sales growth; and
  • Capital expenditures of approximately $150 million.

A conference call to review the fourth quarter and year results is scheduled for today at 8:30 a.m. EST.  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 gift 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 601 boutiques and 84 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 363 boutiques and 27 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 169 boutiques and 17 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 visit www.chicosfas.com.

(Financial Tables Follow)


Chico's FAS, Inc.

Consolidated Statements of Income

(in thousands, except per share amounts)




Fifty-Two Weeks Ended




Thirteen Weeks Ended



January 28, 2012


January 29, 2011


January 28, 2012


January 29, 2011


(Unaudited)




(Unaudited)


(Unaudited)


Amount


% of Sales


 Amount


% of Sales


Amount


% of Sales


 Amount


% of Sales

Net Sales:
















Chico's/Soma Intimates

$  1,460,518


66.5


$1,314,649


69.0


$354,052


62.2


$320,660


67.5

White House | Black Market

696,358


31.7


590,305


31.0


186,681


32.8


154,314


32.5

Boston Proper

39,484


1.8




28,474


5.0



       Total net sales

2,196,360


100.0


1,904,954


100.0


569,207


100.0


474,974


100.0

















Cost of goods sold

969,989


44.2


836,379


43.9


271,335


47.7


222,251


46.8

       Gross margin

1,226,371


55.8


1,068,575


56.1


297,872


52.3


252,723


53.2

















Selling, general and administrative expenses:
















Selling, general and administrative expenses

998,861


45.5


891,493


46.8


259,138


45.5


222,214


46.8

Acquisition and integration costs

5,133


0.2




148


0.0



 Total selling, general and administrative expenses

1,003,994


45.7


891,493


46.8


259,286


45.5


222,214


46.8

       Income from operations

222,377


10.1


177,082


9.3


38,586


6.8


30,509


6.4

















Interest income, net

1,597


0.1


1,712


0.1


212


0.0


385


0.1

       Income before income taxes

223,974


10.2


178,794


9.4


38,798


6.8


30,894


6.5

















Income tax provision

83,100


3.8


63,400


3.3


13,700


2.4


10,200


2.1

       Net income

$     140,874


6.4


$   115,394


6.1


$ 25,098


4.4


$   20,694


4.4


















Per share data:

















Net income per common share-basic

$          0.82




$         0.65




$     0.15




$     0.12



















Net income per common & common equivalent share–diluted

$          0.82




$         0.64




$     0.15




$     0.12



















Weighted average common shares

outstanding–basic

169,153




176,778




163,871




176,029



















Weighted average common & common

equivalent shares outstanding–diluted

170,250




178,034




164,801




177,197



















Dividends declared per share

$         0.20




$         0.16




$      0.05




$      0.04








Chico's FAS, Inc.

Consolidated Balance Sheets

(in thousands)


January 28,


January 29,


January 30,


2012


2011


2010


(Unaudited)





ASSETS

Current Assets:






    Cash and cash equivalents

$           58,919


$           14,695


$          37,043

    Marketable securities, at fair value

188,934


534,019


386,500

    Inventories

194,469


159,814


138,516

    Prepaid expenses and other current assets

55,104


48,237


37,921

         Total Current Assets

497,426


756,765


599,980







          Property and Equipment, Net

550,230


517,377


521,529







Other Assets:






    Goodwill

238,693


96,774


96,774

    Other intangible assets

132,112


38,930


38,930

    Other assets, net

6,691


6,175


61,590

         Total Other Assets

377,496


141,879


197,294


$     1,425,152


$      1,416,021


$      1,318,803







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:






    Accounts payable

$         100,395


$         106,665


$          79,219

    Other current liabilities

137,714


114,612


115,487

         Total Current Liabilities

238,109


221,277


194,706







Noncurrent Liabilities:






    Deferred liabilities

125,690


129,837


142,179

    Deferred taxes

52,125



         Total Deferred Liabilities

177,815


129,837


142,179







Stockholders' Equity:






    Preferred stock



    Common stock

1,657


1,779


1,781

    Additional paid-in capital

302,612


282,528


268,109

    Retained earnings

704,631


780,212


711,624

    Accumulated other comprehensive income      

328


388


404

       Total Stockholders' Equity

1,009,228


1,064,907


981,918


$      1,425,152


$      1,416,021


$       1,318,803





Chico's FAS, Inc.

Consolidated Cash Flow Statements

(Unaudited)

(in thousands)


Fifty-Two Weeks Ended


January 28,


January 29,


2012


2011





CASH FLOWS FROM OPERATING ACTIVITIES:




 Net income

$   140,874


$     115,394

 Adjustments to reconcile net income to net cash




    provided by operating activities -




    Depreciation and amortization

99,430


94,113

    Deferred tax expense

19,489


32,501

    Stock-based compensation expense

15,198


10,548

    Excess tax benefit from stock-based compensation

(2,643)


(2,655)

    Deferred rent and lease credits

(19,073)


(16,624)

    Loss on disposal of property and equipment

2,949


3,085

 (Increase) in assets, net of effects of acquisition -




    Inventories

(20,812)


(21,298)

    Prepaid expenses and other current assets

(3,491)


(8,946)

 (Decrease) increase in liabilities, net of effects of acquisition -




    Accounts payable

(14,571)


27,446

    Accrued and other deferred liabilities

37,831


6,062

         Total adjustments

114,307


124,232

         Net cash provided by operating activities

255,181


239,626





CASH FLOWS FROM INVESTING ACTIVITIES:




 Purchases of marketable securities

(592,962)


(579,488)

 Proceeds from sale of marketable securities

937,987


431,953

 Acquisition of Boston Proper, Inc., net of cash acquired

(213,561)


 Purchases of property and equipment, net

(131,757)


(73,045)

         Net cash used in investing activities

(293)


(220,580)





CASH FLOWS FROM FINANCING ACTIVITIES:




 Proceeds from issuance of common stock

4,549


3,648

 Excess tax benefit from stock-based compensation

2,643


2,655

 Dividends paid

(34,152)


(28,489)

 Repurchase of common stock

(183,290)


(19,208)

 Cash paid for deferred financing costs

(414)


        Net cash used in financing activities

(210,664)


(41,394)





        Net increase (decrease) in cash and cash equivalents

44,224


(22,348)

CASH AND CASH EQUIVALENTS, Beginning of period

14,695


37,043

CASH AND CASH EQUIVALENTS, End of period

$58,919


$ 14,695







SEC Regulation G - The Company reports its consolidated financial results in accordance with generally accepted accounting principles (GAAP).  However, to supplement these consolidated financial results, management believes that certain non-GAAP operating results, which exclude certain non-recurring charges including acquisition and integration costs, may provide a more meaningful measure on which to compare the Company's results of operations between periods.  The Company believes these non-GAAP results provide useful information to both management and investors by excluding certain expenses that impact the comparability of the results.  A reconciliation of net income and earnings per diluted share on a GAAP basis to net income and earnings per diluted share on a non-GAAP basis is presented in the table below:


Chico's FAS, Inc.

Non-GAAP to GAAP Reconciliation of Net Income and Diluted EPS

(in thousands, except per share amounts)




Fifty-Two Weeks Ended

Net income:


January 28, 2012




GAAP basis


$ 140,874

Add: Impact of acquisition and integration costs, net of tax


3,574

Non-GAAP adjusted basis


$ 144,448




Net income per diluted share:






GAAP basis


$    0.82

Add: Impact of acquisition and integration costs, net of tax  


0.02

Non-GAAP adjusted basis


$    0.84










Chico's FAS, Inc.

Boutique Count and Square Footage

As of January 28, 2012








































As of


New




As of






1/29/2011


Stores


Closures


1/28/2012



Store count:
























Chico's frontline boutiques



597


16


(12)


601



Chico's outlets



63


20



83



WH|BM frontline boutiques



342


31


(9)


364



WH|BM outlets



21


6



27



Soma frontline boutiques



120


52


(8)


164



Soma outlets



8


12


(3)


17



Total Chico's FAS, Inc.



1,151


137


(32)


1,256




































Remodels/












Relos and






As of


New




change in


As of




1/29/2011


Stores


Closures


SSF


1/28/2012













Net selling square footage (SSF):
























Chico's frontline boutiques



1,606,394


42,107


(28,686)


11,859


1,631,674

Chico's outlets



166,123


47,630



(278)


213,475

WH|BM frontline boutiques



710,480


71,132


(19,903)


6,733


768,442

WH|BM outlets



40,421


12,492



350


53,263

Soma frontline boutiques



246,688


104,661


(18,521)


(5,970)


326,858

Soma outlets



14,817


23,969


(6,178)


68


32,676

Total Chico's FAS, Inc.



2,784,923


301,991


(73,288)


12,762


3,026,388





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

SOURCE Chico's FAS, Inc.



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