* Net sales rose 31.6% to a record $376 million for the fourth quarter
* Fourth quarter net income up 34.9% to a record $44 million
* Fiscal year net sales rose 31.7% to a record $1.4 billion
* Net income climbed 37.4% to a record $194 million for the fiscal year
* Operating margin of 21.2% is the highest ever
* Fiscal 2005 net selling square footage increased 22%; added 106 stores,
net
FORT MYERS, Fla., March 1 /PRNewswire-FirstCall/ -- Chico's FAS, Inc.
(NYSE: CHS) today announced its financial results for the fourth quarter and
fiscal year ended January 28, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030428/CHICOLOGO )
For the fiscal year ended January 28, 2006, which included fifty-two
weeks, net income rose 37.4% to a record $194 million, or $1.06 per diluted
share, compared to net income of $141 million, or $0.78 per diluted share, in
the fifty-two week fiscal year ended January 29, 2005. Net sales for the
fiscal year increased 31.7% to a record $1.4 billion from $1.1 billion in the
prior fiscal year. Comparable store sales for the Company-owned stores
increased 14.3% for the fifty-two week fiscal year compared to the same fifty-
two week period last year.
For the thirteen-week fourth quarter ended January 28, 2006, net income
rose 34.9% to a record $44 million, or $0.24 per diluted share, compared to
net income of $33 million, or $0.18 per diluted share, in the thirteen-week
fourth quarter ended January 29, 2005. Net sales for the fourth quarter
climbed 31.6% to a record $376 million from $286 million in the prior year's
comparable period. Comparable store sales for the Company-owned stores
increased 14.6% for the thirteen-week period ended January 28, 2006, compared
to the same thirteen-week period last year.
Scott A. Edmonds, Chico's President and CEO, commented, "Fiscal 2005
resulted in our highest operating margin ever as we improved from 21.0% last
year to 21.2% this year. Both the Chico's and White House | Black Market
brands ended fiscal 2005 with over $1,000 per net selling square foot, while
the initial 10 Soma stores exceeded $450 per net selling square foot on over
$1 million in average sales per store in their first full year of operations.
We ended the year with over $400 million in cash and marketable securities, no
debt, and an inventory increase that was generally in line with our sales
increases."
Mr. Edmonds continued, "Considering the impact of the increase in fourth
quarter marketing costs that we planned and implemented, we are pleased with
the quarter's consolidated profitability and with the quarter's merchandise
margins that improved in each of our brands over the fourth quarter margins
last year. During the fourth quarter, Chico's, White House | Black Market,
and Soma all achieved their highest fourth quarter front-line merchandise
margins ever as Chico's quarter over quarter merchandise margins improved by
50 basis points, White House | Black Market improved by 90 basis points, and
Soma improved by 490 basis points. In spite of these brand by brand
improvements in merchandise margins, the overall gross margin in the fourth
quarter showed a decline from the fourth quarter last year mostly due to a 40
basis point decline in the outlet gross margins, the larger relative growth of
the lower margin White House | Black Market and Soma brands, and relatively
small increases in other inventory clearance costs and freight costs."
Mr. Edmonds further stated, "The success in our Chico's stores over the
years has been phenomenal and we see opportunities for further expansion in
the Chico's brand. We are making important investments in our other brands as
we transition to a future of multiple platforms for growth. Our recent
investment in the Fitigues brand, our accelerated rollout of the Soma brand
and the continued emphasis on store growth for our particularly successful
White House | Black Market brand, are positioning the Company for what we
envision to be sustained long term growth for our shareholders. Earlier this
year, we stepped up the rollout plans in fiscal 2006 with the goal of moving
more quickly to profitability in the Soma brand and to take advantage of the
momentum of the White House | Black Market brand, which has consistently added
increasing levels of earnings per share to our overall results. Each of these
growth strategies is likely to have some short-term downward impact on both
our gross margins and our operating margins. With these continuing long term
investments, we expect there will be continued pressure on the overall gross
margin for each quarter of fiscal 2006, and we anticipate a decline of between
10 and 50 basis points quarter over quarter, with the first half of the year
likely to be less impacted than the second half. Further, these investments,
including certain longer term initiatives in the MIS and store payroll areas,
can be expected to require a slightly higher level of selling, general and
administrative costs as a percentage of sales. We are optimistic that we will
be able to manage these costs so as to mitigate the extent of any negative
impact on the percentage. Like many other companies, we will be affected by
FAS 123R and we anticipate that these new expensing requirements will reduce
annual earnings in fiscal 2006 by between eight and nine cents a share.
Excluding the impact of the initial adoption of FAS 123R, we anticipate our
earnings to grow in the neighborhood of 25% in fiscal 2006."
The Company is a specialty retailer of private label, sophisticated,
casual-to-dressy clothing, intimates, complementary accessories, and other
non-clothing gift items. The Company operates 780 women's specialty stores,
including stores in 47 states, the District of Columbia, the U.S. Virgin
Islands and Puerto Rico operating under the Chico's, White House | Black
Market, Soma by Chico's and Fitigues names. The Company owns 501 Chico's
front-line stores, 31 Chico's outlet stores, 198 White House | Black Market
front-line stores, 8 White House | Black Market outlet stores, 16 Soma by
Chico's stores, 11 Fitigues front-line stores and 1 Fitigues outlet store;
franchisees own and operate 14 Chico's stores.
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, please call (877) 424-4267 to listen to Chico's
monthly sales information and investor relations line
A copy of a slide show addressing Chico's recent financial results and current
plans for expansion is available on the Chico's website at
http://www.chicos.com in the investor relations section
Additional investor information on Chico's FAS, Inc. is available free of
charge on the Chico's website at http://www.chicos.com in the
investor relations section
(Financial Tables Follow)
Chico's FAS, Inc.
Consolidated Balance Sheets
(In thousands)
January 28, January 29,
2006 2005
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $3,035 $14,426
Marketable securities, at market 401,445 251,199
Receivables 7,240 5,106
Income taxes receivable 5,013 --
Inventories 95,421 73,223
Prepaid expenses 13,497 9,429
Deferred taxes 12,327 11,184
Total Current Assets 537,978 364,567
Property and Equipment:
Land and land improvements 44,893 6,055
Building and building improvements 35,573 29,286
Equipment, furniture and fixtures 187,970 140,360
Leasehold improvements 209,342 166,096
Total Property and Equipment 477,778 341,797
Less accumulated depreciation and
amortization (131,846) (93,834)
Property and Equipment, Net 345,932 247,963
Other Assets:
Goodwill 61,796 61,796
Other intangible assets 34,041 34,042
Other assets, net 19,666 7,361
Total Other Assets 115,503 103,199
$999,413 $715,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $47,434 $36,725
Accrued liabilities 74,586 58,258
Current portion of deferred liabilities 648 332
Total Current Liabilities 122,668 95,315
Noncurrent Liabilities:
Deferred liabilities 65,189 47,149
Deferred taxes 5,129 12,397
Total Noncurrent Liabilities 70,318 59,546
Stockholders' Equity:
Common stock 1,817 1,790
Additional paid-in capital 202,878 147,652
Unearned compensation (3,710) --
Retained earnings 605,537 411,556
Accumulated other comprehensive loss (95) (130)
Total Stockholders' Equity 806,427 560,868
$999,413 $715,729
Chico's FAS, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
Fifty-Two Weeks Ended
(Unaudited)
January 28, 2006 January 29, 2005
Amount % of Amount % of
Sales Sales
Net sales by Chico's/Soma
stores $1,095,938 78.0 $889,429 83.4
Net sales by White House |
Black Market stores 261,601 18.6 142,092 13.3
Net sales by catalog & Internet 36,151 2.6 26,831 2.5
Net sales to franchisees 10,885 0.8 8,530 0.8
Net sales 1,404,575 100.0 1,066,882 100.0
Cost of goods sold 547,532 39.0 411,908 38.6
Gross profit 857,043 61.0 654,974 61.4
General, administrative and
store operating expenses 514,529 36.6 398,117 37.3
Depreciation and amortization 44,201 3.2 32,481 3.1
Income from operations 298,313 21.2 224,376 21.0
Interest income, net 8,236 0.6 2,327 0.2
Income before taxes 306,549 21.8 226,703 21.2
Income tax provision 112,568 8.0 85,497 8.0
Net income $193,981 13.8 $141,206 13.2
Per share data:
Net income per common share-
basic $1.07 $0.79
Net income per common & common
equivalent share-diluted $1.06 $0.78
Weighted average common shares
outstanding-basic 180,465 178,256
Weighted average common &
common equivalent shares
outstanding-diluted 182,408 180,149
Thirteen Weeks Ended
(Unaudited) (Unaudited)
January 28, 2006 January 29, 2005
Amount % of Amount % of
Sales Sales
Net sales by Chico's/Soma
stores $279,266 74.3 $230,958 80.9
Net sales by White House |
Black Market stores 82,057 21.8 44,975 15.7
Net sales by catalog & Internet 11,624 3.1 7,429 2.6
Net sales to franchisees 2,783 0.8 2,189 0.8
Net sales 375,730 100.0 285,551 100.0
Cost of goods sold 152,597 40.6 115,304 40.4
Gross profit 223,133 59.4 170,247 59.6
General, administrative and
store operating expenses 143,488 38.2 107,342 37.5
Depreciation and amortization 13,009 3.5 11,733 4.1
Income from operations 66,636 17.7 51,172 18.0
Interest income, net 2,578 0.7 955 0.3
Income before taxes 69,214 18.4 52,127 18.3
Income tax provision 24,754 6.6 19,159 6.7
Net income $44,460 11.8 $32,968 11.6
Per share data:
Net income per common share-
basic $0.25 $0.18
Net income per common & common
equivalent share-diluted $0.24 $0.18
Weighted average common shares
outstanding-basic 181,206 178,787
Weighted average common &
common equivalent shares
outstanding-diluted 183,184 180,518
Chico's FAS, Inc.
Consolidated Cash Flow Statements
(In thousands)
January 28, January 29,
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited)
Net income $193,981 $141,206
Adjustments to reconcile net income to
net cash provided by operating
activities --
Depreciation and amortization, cost of
goods sold 4,651 3,605
Depreciation and amortization, other 44,201 32,481
Deferred tax benefit (8,411) (2,986)
Stock-based compensation expense 1,614 --
Tax benefit of stock options exercised 21,461 27,297
Deferred rent expense, net 3,673 6,450
Loss on impairment and disposal of
property and equipment 753 311
(Increase) decrease in assets --
Receivables, net (7,147) 1,069
Inventories (22,198) (18,280)
Prepaid expenses and other (5,958) (2,734)
Increase in liabilities --
Accounts payable 10,709 8,929
Accrued and other deferred liabilities 31,073 26,272
Total adjustments 74,421 82,414
Net cash provided by operating
activities 268,402 223,620
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (357,237) (404,211)
Proceeds from sale of marketable
securities 207,026 257,299
Acquisition of equity investment (10,418) --
Acquisition of franchise store -- (1,307)
Purchases of property and equipment (147,635) (93,065)
Net cash used in investing
activities (308,264) (241,284)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 28,471 22,684
Repurchase of common stock -- (4,992)
Payments on capital leases -- (1,278)
Net cash provided by financing
activities 28,471 16,414
Net decrease in cash and cash
equivalents (11,391) (1,250)
CASH AND CASH EQUIVALENTS, Beginning of period 14,426 15,676
CASH AND CASH EQUIVALENTS, End of period $3,035 $14,426
Executive Contacts:
Charles J. Kleman
Chief Financial Officer
Chico's FAS, Inc.
(239) 274-4105
F. Michael Smith
Vice President
Investor and Community Relations
Chico's FAS, Inc.
(239) 274-4797
SOURCE Chico's FAS, Inc.
-0- 03/01/2006
/CONTACT: Charles J. Kleman, Chief Financial Officer, +1-239-274-4105, or
F. Michael Smith, Vice President, Investor and Community Relations,
+1-239-274-4797, both of Chico's FAS, Inc./
/Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20030428/CHICOLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, [email protected] /
/Web site: http://www.chicos.com /
(CHS)
CO: Chico's FAS, Inc.
ST: Florida
IN: REA FAS TEX
SU: ERN ERP
MR-MD
-- FLW024 --
6336 03/01/2006 16:05 EST http://www.prnewswire.com