- Second quarter sales of $419.9 million with all brands reporting
positive comparable store sales - Quarter-end inventories decreased
10% per selling square foot - Cash and marketable securities were
$377.5 million at quarter-end FORT MYERS, Fla., Aug. 25
/PRNewswire-FirstCall/ -- Chico's FAS, Inc. (NYSE:CHS) today
announced its financial results for the 2009 second quarter ended
August 1, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20080211/CHICOSLOGO ) 2009
Second Quarter and Six Months Financial Results For the second
quarter ended August 1, 2009, the Company had net income of $14.9
million or $0.08 per diluted share, compared to net income of $6.7
million, or $0.04 per diluted share for the second quarter ended
August 2, 2008. The second quarter 2009 results include non-cash
impairment charges totaling approximately $3.1 million, net of tax,
or nearly $0.02 per diluted share. These charges consist of $2.4
million, net of tax, related to the impaired portion of a note
receivable and $0.7 million, net of tax, related to underperforming
stores. Excluding these charges, the Company's second quarter net
income approximated $18.0 million, or $0.10 per diluted share
compared to net income of $6.7 million, or $0.04 per diluted share
for the like period last year. For the six months ended August 1,
2009, the Company had net income of $29.4 million or $0.17 per
diluted share, compared to net income of $19.4 million, or $0.11
per diluted share in the first six months of the prior year.
Excluding all impairment charges recorded in the first half of
2009, the Company had net income of $37.6 million, or $0.21 per
diluted share, compared to net income of $19.4 million, or $0.11
per diluted share for the first six months of 2008. Sales Net sales
for the thirteen-week period ended August 1, 2009 increased from
$405.2 million to $419.9 million. Consolidated comparable store
sales increased 1.3% for the thirteen-week period ended August 1,
2009 compared to the 15.9% decrease for the like period last year
ended August 2, 2008. The Chico's/Soma brand's same store sales
increased approximately 0.4% and the White House | Black Market
(WH|BM) brand's same store sales increased approximately 3.7%.
Direct-to-consumer sales, not included in comparable store sales,
increased 46% over second quarter 2008. Gross Margin Gross margin
for the second quarter of 2009 increased from $213.4 million to
$231.0 million and increased 230 basis points, expressed as a
percentage of net sales, to 55.0% from 52.7% in the prior year's
second quarter. The increase in gross margin was primarily due to
lower markdowns in the Chico's brand and to a lesser extent, higher
initial markups for the WH|BM brand. However, the improvements in
merchandise margins was partially offset by the continued
investment in merchandise payroll including the support for
planning and allocation initiatives. Selling, General and
Administrative Expenses Selling, general and administrative
expenses ("SG&A") for the second quarter of 2009 increased from
$205.5 million in the prior period to $207.0 million in the current
period. However, expressed as a percentage of net sales, SG&A
in the current quarter decreased by approximately 140 basis points
compared to the prior period primarily as the result of ongoing
cost reduction strategies. The dollar savings from these
implemented strategies were offset by the recognition of pre-tax
impairment charges totaling $5.0 million. Excluding these charges,
total SG&A expense would have decreased by $3.4 million, or 260
basis points, compared to the like period last year. The Company's
expense reduction strategies were further offset in part by an
increase in performance-based compensation accruals resulting from
the Company's improved year-to-date results. Store operating
expenses for the second quarter of 2009 decreased by $2.8 million,
or 210 basis points, primarily as a result of on-going store level
cost reduction strategies including payroll, supplies and shipping
costs. Marketing expense for the second quarter 2009 decreased by
$0.6 million due to reduced direct mail advertising in the current
quarter versus the second quarter of 2008. Shared services costs,
including headquarters and other non-brand specific expenses, for
the second quarter of 2009 were flat compared to the prior year's
second quarter and includes the impact of the aforementioned
performance-based compensation accruals. Inventories Consolidated
inventory per selling square foot at the end of the second quarter
was $50, reflecting a decrease of approximately 10% compared to $56
at the end of the prior year's second quarter. Quarter-ended
inventory decreased $12.6 million or approximately 9% from the
prior year's second quarter, while including approximately $5.4
million of incremental inventory in-transit over the prior period.
Quarter-ended inventory for the WH|BM brand decreased approximately
18% per selling square foot over the prior year's second quarter
while Chico's brand inventory was down 5% and includes the impact
of $5.0 million of incremental in-transit inventory. Cash and
Marketable Securities Cash and marketable securities at the end of
the second quarter totaled $377.5 million, approximately $100
million higher than the prior year's second quarter end. Net cash
provided from operating activities for the six months ended August
1, 2009 increased by $71.6 million compared to the prior year as a
result of an increase in accounts payables and accrued expenses,
lower inventory levels and higher cash flow from operations.
Additionally, the Company expended $36.2 million in capital
expenditures for the first six months in fiscal 2009 versus $69.5
million for the same period last year. Note Receivable During the
second quarter of 2009, the Company determined that a note
receivable which originated from a transaction in 2007 to sell a
parcel of land was impaired. Accordingly, the Company recorded a
non-cash, pre-tax impairment charge of approximately $3.8 million.
As of August 1, 2009, the note has been classified with a balance
of approximately $22.0 million, within other assets on the
Company's consolidated balance sheets. The Company expects to
reclaim ownership of the land during the third quarter of 2009.
ABOUT CHICO'S FAS, INC. The Company is a women's specialty retailer
of private branded, sophisticated, casual-to-dressy clothing,
intimates, complementary accessories, and other non-clothing gift
items. The Company operates 1,068 specialty stores, including
stores in 48 states, the District of Columbia, the U.S. Virgin
Islands and Puerto Rico. The Chico's brand currently operates 611
boutique and 40 outlet stores, publishes a catalog during key
shopping periods throughout the year, and conducts e-commerce at
http://www.chicos.com/. White House | Black Market currently
operates 328 boutique and 16 outlet stores, publishes a catalog
highlighting its latest fashions and conducts e-commerce at
http://www.whitehouseblackmarket.com/. Soma Intimates is the
Company's developing concept with 72 boutique stores and 1 outlet
store today. Soma Intimates also publishes a catalog for its
customers and conducts e-commerce at http://www.soma.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, http://www.chicosfas.com/. (Financial Tables Follow)
Chico's FAS, Inc. Consolidated Statements of Income (Unaudited) (in
thousands, except per share amounts) Twenty-Six Weeks Ended
------------------------------- August 1, 2009 August 2, 2008
-------------- -------------- Amount % of Amount % of Sales Sales
-------- ---- -------- ---- Net sales by Chico's/Soma stores
$552,417 66.5 $562,974 69.1 Net sales by White House | Black Market
stores 235,911 28.4 221,945 27.2 Net sales by direct-to-consumer
42,229 5.1 29,864 3.7 ------ --- ------ --- Net sales 830,557 100.0
814,783 100.0 Cost of goods sold 366,128 44.1 372,620 45.7 -------
---- ------- ---- Gross margin 464,429 55.9 442,163 54.3 Selling,
general and administrative expenses: Store operating expenses
317,375 38.2 320,942 39.4 Marketing 34,002 4.1 39,630 4.9 Shared
services 54,235 6.5 57,018 7.0 Impairment charges 13,026 1.6 - -
------ --- ---- ---- Total selling, general, and administrative
expenses 418,638 50.4 417,590 51.3 Income from operations 45,791
5.5 24,573 3.0 Interest income (expense), net 1,003 0.1 4,038 0.5
----- --- ----- --- Income before income taxes 46,794 5.6 28,611
3.5 Income tax provision 17,400 2.1 9,200 1.1 ------ --- ----- ---
Net income $29,394 3.5 $19,411 2.4 ======= === ======= === Per
share data: Net income per common share-basic $0.17 $0.11 =====
===== Net income per common & common equivalent share-diluted
$0.17 $0.11 ===== ===== Weighted average common shares 177,192
176,421 outstanding-basic ======= ======= Weighted average common
& common 178,021 176,578 equivalent shares outstanding-diluted
======= ======= Thirteen Weeks Ended ------------------------------
August 1, 2009 August 2, 2008 -------------- -------------- Amount
% of Amount % of Sales Sales -------- ----- -------- ----- Net
sales by Chico's/Soma stores $279,911 66.7 $277,279 68.4 Net sales
by White House | Black Market stores 119,744 28.5 114,095 28.2 Net
sales by direct-to-consumer 20,260 4.8 13,844 3.4 ------ --- ------
--- Net sales 419,915 100.0 405,218 100.0 Cost of goods sold
188,874 45.0 191,857 47.3 ------- ---- ------- ---- Gross margin
231,041 55.0 213,361 52.7 Selling, general and administrative
expenses: Store operating expenses 157,180 37.4 159,957 39.5
Marketing 16,168 3.9 16,786 4.1 Shared services 28,701 6.8 28,737
7.1 Impairment charges 4,968 1.2 - - ----- --- ---- ---- Total
selling, general, and administrative expenses 207,017 49.3 205,480
50.7 Income from operations 24,024 5.7 7,881 2.0 Interest income
(expense), net (19) 0.0 1,799 0.4 --- --- ----- --- Income before
income taxes 24,005 5.7 9,680 2.4 Income tax provision 9,100 2.2
3,000 0.7 ----- --- ----- --- Net income $14,905 3.5 $6,680 1.7
======= === ====== === Per share data: Net income per common
share-basic $0.08 $0.04 ===== ===== Net income per common &
common equivalent share-diluted $0.08 $0.04 ===== ===== Weighted
average common shares outstanding-basic 177,228 176,473 =======
======= Weighted average common & common equivalent shares
outstanding-diluted 178,566 176,616 ======= ======= Chico's FAS,
Inc. Consolidated Balance Sheets (in thousands) August 1, January
31, August 2, 2009 2009 2008 ---- ---- ---- (Unaudited) (Unaudited)
ASSETS Current Assets: Cash and cash equivalents $44,143 $26,549
$25,381 Marketable securities, at market 333,367 242,153 252,307
Receivables 6,110 33,993 38,293 Income tax receivable 1,156 11,706
- Inventories 130,238 132,413 142,868 Prepaid expenses 26,088
21,702 23,004 Deferred taxes 15,555 17,859 15,276 ------ ------
------ Total Current Assets 556,657 486,375 497,129 Property and
Equipment: Land and land improvements 20,293 18,627 17,888 Building
and building improvements 83,600 74,998 73,021 Equipment, furniture
and fixtures 385,503 376,218 371,863 Leasehold improvements 416,003
418,691 421,771 ------- ------- ------- Total Property and
Equipment 905,399 888,534 884,543 Less accumulated depreciation and
amortization (367,151) (327,989) (298,495) -------- --------
-------- Property and Equipment, Net 538,248 560,545 586,048 Other
Assets: Goodwill 96,774 96,774 96,774 Other intangible assets
38,930 38,930 38,930 Deferred taxes 38,261 38,458 25,601 Other
assets, net 27,131 5,101 11,318 ------ ----- ------ Total Other
Assets 201,096 179,263 172,623 ------- ------- ------- $1,296,001
$1,226,183 $1,255,800 ========== ========== ========== LIABILITIES
AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable
$82,827 $56,542 $65,811 Accrued liabilities 108,719 88,446 80,339
Current portion of deferred liabilities 2,002 1,748 1,606 -----
----- ----- Total Current Liabilities 193,548 146,736 147,756
Noncurrent Liabilities: Deferred liabilities 169,958 177,251
170,799 Stockholders' Equity: Common stock 1,774 1,771 1,765
Additional paid-in capital 259,331 258,312 254,952 Retained
earnings 671,372 641,978 680,526 Other accumulated comprehensive
income 18 135 2 -- --- -- Total Stockholders' Equity 932,495
902,196 937,245 ------- ------- ------- $1,296,001 $1,226,183
$1,255,800 ========== ========== ========== Chico's FAS, Inc.
Consolidated Cash Flow Statements (Unaudited) (In thousands)
Twenty-Six Weeks Ended ---------------------- August 1, August 2,
2009 2008 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $29,394 $19,411 ------- ------- Adjustments to reconcile
net income to net cash provided by operating activities -
Depreciation and amortization, cost of goods sold 3,271 5,465
Depreciation and amortization, other 45,359 45,750 Deferred tax
expense (benefit) 2,501 (5,068) Stock-based compensation expense,
cost of goods sold 1,435 1,807 Stock-based compensation expense,
other 2,742 4,562 Excess tax benefit from stock-based compensation
(115) (100) Impairment charges 13,026 - Deferred rent expense, net
1,133 4,123 Loss on disposal of property and equipment 711 181
Decrease (increase) in assets - Receivables, net 2,048 (535) Income
tax receivable 10,550 23,973 Inventories 2,175 1,393 Prepaid
expenses and other (4,416) (3,925) Increase (decrease) in
liabilities - Accounts payable 26,285 (22,323) Accrued and other
deferred liabilities 8,263 (1,939) ----- ------- Total adjustments
114,968 53,364 ------- ------ Net cash provided by operating
activities 144,362 72,775 ------- ------ CASH FLOWS FROM INVESTING
ACTIVITIES: (Purchases) sales of marketable securities, net
(91,331) 8,165 Purchases of property and equipment (36,235)
(69,490) -------- -------- Net cash used in investing activities
(127,566) (61,325) -------- -------- CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from issuance of common stock 773 163 Excess
tax benefit from stock-based compensation 115 100 Repurchase of
common stock (90) (133) ---- ----- Net cash provided by financing
activities 798 130 --- --- Net increase in cash and cash
equivalents 17,594 11,580 CASH AND CASH EQUIVALENTS, Beginning of
period 26,549 13,801 ------ ------ CASH AND CASH EQUIVALENTS, End
of period $44,143 $25,381 ======= ======= 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
impairment and certain other non-recurring charges, 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 second quarter and the first six
months of 2009 earnings per diluted share on a GAAP basis to
earnings per share on a non-GAAP basis is presented in the table
below: Chico's FAS, Inc. Non-GAAP to GAAP Reconciliation Diluted
Earnings Per Share (EPS) 26 weeks ended 13 weeks ended August 1,
2009 August 1, 2009 -------------- -------------- Diluted EPS on a
GAAP basis (as reported) $0.17 $0.08 Add: Impact of impairment
charges 0.04 0.02 ---- ---- Non-GAAP Diluted EPS $0.21 $0.10 =====
===== Executive Contact: Robert C. Atkinson Vice President -
Investor Relations Chico's FAS, Inc. (239) 274-4199
http://www.newscom.com/cgi-bin/prnh/20080211/CHICOSLOGODATASOURCE:
Chico's FAS, Inc. CONTACT: Robert C. Atkinson, Vice President -
Investor Relations, Chico's FAS, Inc., +1-239-274-4199 Web Site:
http://www.chicosfas.com/
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