- Third quarter sales increased 13.4% to $446.9 million -
Quarter-end inventories decreased $27.2 million or 15% per selling
square foot - Cash and marketable securities were $423.3 million at
quarter-end FORT MYERS, Fla., Nov. 18 /PRNewswire-FirstCall/ --
Chico's FAS, Inc. (NYSE:CHS) today announced its financial results
for the fiscal 2009 third quarter and nine months ended October 31,
2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20091112/FL09527LOGO ) 2009
Third Quarter and Nine Months Financial Results For the third
quarter ended October 31, 2009, the Company had net income of $22.7
million or $0.13 per diluted share, compared to net income of $2.0
million, or $0.01 per diluted share for the third quarter ended
November 1, 2008. For the nine months ended October 31, 2009, the
Company had net income of $52.1 million or $0.29 per diluted share,
compared to net income of $21.4 million, or $0.12 per diluted share
in the first nine months of the prior year. Excluding the
impairment charges recorded prior to the fiscal third quarter of
2009, the Company had net income of $60.3 million, or $0.34 per
diluted share compared to net income of $21.4 million, or $0.12 per
diluted share for the first nine months of 2008. Sales Net sales
for the thirteen-week period ended October 31, 2009 increased from
$394.2 million to $446.9 million. Consolidated comparable store
sales increased 12.8% for the thirteen-week period ended October
31, 2009 compared to a 13.4% decrease for the like period last year
ended November 1, 2008. The Chico's/Soma Intimates brands'
comparable store sales increased 12.2% compared to a 16.2% decrease
for the like period last year, and the White House | Black Market
(WH|BM) brand's comparable store sales increased 14.4% compared to
a 4.8% decrease for the like period last year. Direct-to-consumer
sales, not included in comparable store sales, increased
approximately 33% over third quarter 2008. Gross Margin Gross
margin, expressed as a percentage of net sales, increased by 400
basis points to 57.6% from 53.6% in the prior year's third quarter
and in dollars from $211.4 million to $257.3 million. The gross
margin increase was attributable to significant improvements in the
brand merchandise margins at both Chico's and WH|BM. The increased
merchandise margins benefited from both lower markdowns and higher
initial markups for the Chico's and WH|BM brands. However, the
improvements in gross margins were partially offset by the
continued investment in merchandise payroll. Selling, General and
Administrative Expenses Selling, general and administrative
expenses ("SG&A") for the third quarter of fiscal 2009
increased from $213.1 million in the prior period to $221.0 million
in the current period. However, expressed as a percentage of net
sales, SG&A in the current quarter decreased by 450 basis
points compared to the prior period primarily from leverage
associated with improved comparable store sales as well as
effective implementation of on-going cost reduction strategies at
the store level. Store operating expenses for the third quarter of
fiscal 2009 increased by $0.6 million, but decreased by 470 basis
points, primarily due to leverage resulting from improved
comparable store sales. Marketing expense for the third quarter of
fiscal 2009 increased by $2.9 million primarily due to increases in
print and broadcast advertisement associated with expanded national
marketing campaigns designed to more effectively target purchasing
during the fall and holiday shopping seasons. National Store
Support Center costs, including corporate and other non-brand
specific expenses, for the third quarter of 2009 increased by $4.4
million dollars due primarily to the increase in performance-based
compensation accruals. Inventories Quarter-ended inventory
decreased $27.2 million or approximately 14.5% from the prior
year's third quarter. Consolidated inventory at the end of the
third quarter was $61 per selling square foot, reflecting a
decrease of approximately 15% compared to $72 at the end of the
prior year's third quarter. Quarter-ended inventory for the WH|BM
brand decreased approximately 22% per selling square foot over the
prior year's third quarter, while Chico's brand inventory decreased
approximately 17% quarter over quarter. Cash and Marketable
Securities Cash and marketable securities at the end of the third
quarter totaled $423.3 million, approximately $167 million higher
than the prior year's third quarter end. Net cash provided from
operating activities for the nine months ended October 31, 2009
increased by $126.1 million compared to the prior year as a result
of higher cash flows from operations, an increase in accounts
payables and accrued expenses, as well as lower inventory levels.
Additionally, the Company invested $51.0 million in capital
expenditures for the first nine months in fiscal 2009 versus $92.3
million for the same period last year. 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 1,074 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 608 boutique and 43 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 331 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 75 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) Thirty-Nine Weeks Ended
--------------------------------------- October 31, 2009 November
1, 2008 ------------------- ------------------- Amount % of Amount
% of Sales Sales -------- ----- -------- ----- Net sales by
Chico's/Soma stores $853,374 66.8 $832,052 68.8 Net sales by White
House | Black Market stores 357,319 28.0 328,696 27.2 Net sales by
direct-to-consumer 66,727 5.2 48,278 4.0 --------- ----- ---------
----- Net sales 1,277,420 100.0 1,209,026 100.0 Cost of goods sold
555,713 43.5 555,490 45.9 --------- ----- --------- ----- Gross
margin 721,707 56.5 653,536 54.1 Selling, general and
administrative expenses: Store operating expenses 482,481 37.8
485,436 40.2 Marketing 58,976 4.6 61,673 5.1 National Store Support
Center 85,123 6.7 83,553 6.9 Impairment charges 13,026 1.0 - -
--------- ----- --------- ----- Total selling, general, and
administrative expenses 639,606 50.1 630,662 52.2 --------- -----
--------- ----- Income (loss) from operations 82,101 6.4 22,874 1.9
Interest income, net 1,337 0.1 6,433 0.5 --------- ----- ---------
----- Income before income taxes 83,438 6.5 29,307 2.4 Income tax
provision (benefit) 31,300 2.4 7,900 0.6 --------- ----- ---------
----- Net income $52,138 4.1 $21,407 1.8 ========= ===== =========
===== Per share data: Net income per common share-basic $0.29 $0.12
========= ========= Net income per common & common equivalent
share-diluted $0.29 $0.12 ========= ========= Weighted average
common shares outstanding-basic 177,348 176,452 ========= =========
Weighted average common & common equivalent shares
outstanding-diluted 178,516 176,599 ========= ========= Thirteen
Weeks Ended --------------------------------------- October 31,
2009 November 1, 2008 ------------------- -------------------
Amount % of Amount % of Sales Sales -------- ----- -------- -----
Net sales by Chico's/Soma stores $300,957 67.3 $269,079 68.2 Net
sales by White House | Black Market Stores 121,408 27.2 106,751
27.1 Net sales by direct-to-consumer 24,498 5.5 18,413 4.7
--------- ----- --------- ----- Net sales 446,863 100.0 394,243
100.0 Cost of goods sold 189,585 42.4 182,870 46.4 --------- -----
--------- ----- Gross margin 257,278 57.6 211,373 53.6 Selling,
general and administrative expenses: Store operating expenses
165,106 37.0 164,494 41.7 Marketing 24,974 5.6 22,043 5.6 National
Store Support Center 30,887 6.9 26,535 6.7 Impairment charges - - -
- --------- ----- --------- ----- Total selling, general, and
administrative expenses 220,967 49.5 213,072 54.0 --------- -----
--------- ----- Income (loss) from operations 36,311 8.1 (1,699)
(0.4) Interest income, net 334 0.1 2,394 0.6 --------- -----
--------- ----- Income before income taxes 36,645 8.2 695 0.2
Income tax provision (benefit) 13,900 3.1 (1,300) (0.3) ---------
----- --------- ----- Net income $22,745 5.1 $1,995 0.5 =========
===== ========= ===== Per share data: Net income per common
share-basic $0.13 $0.01 ========= ========= Net income per common
& common equivalent share-diluted $0.13 $0.01 =========
========= Weighted average common shares outstanding-basic 177,662
176,517 ========= ========= Weighted average common & common
equivalent shares outstanding-diluted 179,251 176,604 =========
========= Chico's FAS, Inc. Consolidated Balance Sheets (in
thousands) October 31, January 31, November 1, 2009 2009 2008
---------- ---------- ---------- (Unaudited) (Unaudited) ASSETS
Current Assets: Cash and cash equivalents $60,985 $26,549 $50,233
Marketable securities, at market 362,322 242,153 206,105
Receivables 5,845 33,993 38,287 Income tax receivable 728 11,706 -
Inventories 160,030 132,413 187,271 Prepaid expenses 24,152 21,702
24,063 Deferred taxes 7,524 17,859 19,131 ------- ------- -------
Total Current Assets 621,586 486,375 525,090 Property and
Equipment: Land and land improvements 20,311 18,627 18,225 Building
and building improvements 84,062 74,998 74,542 Equipment, furniture
and fixtures 395,225 376,218 381,812 Leasehold improvements 416,003
418,691 428,755 ------- ------- ------- Total Property and
Equipment 915,601 888,534 903,334 Less accumulated depreciation and
amortization (386,999) (327,989) (319,083) ------- ------- -------
Property and Equipment, Net 528,602 560,545 584,251 Other Assets:
Goodwill 96,774 96,774 96,774 Other intangible assets 38,930 38,930
38,930 Deferred taxes 39,398 38,458 29,406 Other assets, net 27,323
5,101 9,368 ------- ------- ------- Total Other Assets 202,425
179,263 174,478 ------- ------- ------- $1,352,613 $1,226,183
$1,283,819 ========= ========= ========= LIABILITIES AND
STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $97,238
$56,542 $81,948 Accrued liabilities 123,069 88,446 83,883 Current
portion of deferred liabilities 2,236 1,748 1,528 ------- -------
------- Total Current Liabilities 222,543 146,736 167,359
Noncurrent Liabilities: Deferred liabilities 167,819 177,251
174,307 Stockholders' Equity: Common stock 1,779 1,771 1,765
Additional paid-in capital 266,112 258,312 257,854 Retained
earnings 694,116 641,978 682,522 Other accumulated comprehensive
income 244 135 12 ------- ------- ------- Total Stockholders'
Equity 962,251 902,196 942,153 ------- ------- ------- $1,352,613
$1,226,183 $1,283,819 ========= ========= ========= Chico's FAS,
Inc. Consolidated Cash Flow Statements (Unaudited) (in thousands)
Thirty-Nine Weeks Ended ------------------------ October 31,
November 1, 2009 2008 ---------- ---------- CASH FLOWS FROM
OPERATING ACTIVITIES: Net income $52,138 $21,407 ------- -------
Adjustments to reconcile net income to net cash provided by
operating activities - Depreciation and amortization, cost of goods
sold 5,770 7,122 Depreciation and amortization, other 66,637 68,190
Deferred tax expense (benefit) 9,394 (12,728) Stock-based
compensation expense, cost of goods sold 1,994 2,612 Stock-based
compensation expense, other 4,549 6,822 Excess tax benefit from
stock-based compensation (1,473) (100) Impairment charges 13,026 -
Deferred rent expense, net 1,963 5,423 Loss on disposal of property
and equipment 1,361 711 Decrease (increase) in assets -
Receivables, net 2,314 (528) Income tax receivable 10,978 23,973
Inventories (27,617) (43,010) Prepaid expenses and other (2,671)
(3,035) Increase (decrease) in liabilities - Accounts payable
40,696 (6,186) Accrued and other deferred liabilities 21,200 3,492
------- ------- Total adjustments 148,121 52,758 ------- -------
Net cash provided by operating activities 200,259 74,165 -------
------- CASH FLOWS FROM INVESTING ACTIVITIES: (Purchases) sales of
marketable securities, net (120,061) 54,376 Purchases of property
and equipment (51,016) (92,320) ------- ------- Net cash used in
investing activities (171,077) (37,944) ------- ------- CASH FLOWS
FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock
3,960 307 Excess tax benefit from stock-based compensation 1,473
100 Repurchase of common stock (179) (196) ------- ------- Net cash
provided by financing activities 5,254 211 ------- ------- Net
increase in cash and cash Equivalents 34,436 36,432 CASH AND CASH
EQUIVALENTS, Beginning of period 26,549 13,801 ------- ------- CASH
AND CASH EQUIVALENTS, End of period $60,985 $50,233 ======= =======
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 the first
nine 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) 39 weeks ended October 31, 2009
---------------- Diluted EPS on a GAAP basis (as reported) $0.29
Add: Impact of impairment charges 0.05 ---------------- Non-GAAP
Diluted EPS $0.34 ================ Executive Contact: Robert C.
Atkinson Vice President-Investor Relations Chico's FAS, Inc. (239)
274-4199
http://www.newscom.com/cgi-bin/prnh/20091112/FL09527LOGODATASOURCE:
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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