Net sales increased 11.5% to $537.2 million with comparable sales increasing 7.7%
FORT MYERS, Fla., May 18, 2011 /PRNewswire via COMTEX/ --
Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2011 first quarter ended April 30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20091112/FL09527LOGO )
Net Income and Earnings per Share
The Company reported net income of $45.9 million, or $0.26 per diluted share, for the first quarter of fiscal 2011 compared to net income of $35.4 million, or $0.20 per diluted share, reported for the same period last year.
Net Sales
Net sales for the first quarter increased 11.5% to $537.2 million from $481.6 million in last year's first quarter. Consolidated comparable sales, which include direct-to-consumer (DTC) sales, increased 7.7% for the first quarter on top of a 16.0% increase for the same period last year. The Chico's/Soma Intimates brands' comparable sales increased 7.8% following a 16.1% increase for the same period last year, and the White House | Black Market ("WH|BM") brand's comparable sales increased 7.4% following a 15.7% increase for the same period last year.
Gross Margin
Gross margin for the first quarter, expressed as a percentage of net sales, increased 60 basis points to 59.1% from 58.5% in last year's first quarter. The gross margin rate increase was attributable to increased margins at Chico's and WH|BM frontline stores primarily driven by improved in-season sell-through in the current period versus the same period last year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") for the first quarter, expressed as a percentage of net sales, decreased 150 basis points compared to last year's first quarter. SG&A dollars, however, increased $18.3 million, or 8.1%, over last year's first quarter primarily due to higher store and direct operating costs associated with 85 net new stores opened since the end of last year's first quarter.
Store and direct operating expenses increased by $12.3 million over last year's first quarter primarily due to increased occupancy expense and store labor costs associated with 85 net new stores over last year, accompanied by increased credit card fees due to higher sales volume compared to last year. However, expressed as a percentage of net sales, store and direct operating expenses decreased 130 basis points due to the leverage associated with the comparable store sales increase.
Marketing expenses increased $1.8 million over last year's first quarter primarily due to incremental television advertising for the Soma brand as well as increased e-marketing initiatives for all three brands.
National Store Support Center ("NSSC") expenses, including corporate and other non-brand specific expenses, increased by $3.6 million from last year's first quarter but were flat to last year as a percentage of net sales.
Inventories
End of quarter inventory increased $38.1 million or approximately 23.7% from last year's first quarter. Excluding an incremental $9.6 million of in-transit inventories this year over last year, inventory per selling square foot would have been $66 versus $60, an increase of 9.5% compared to last year. The increase in year-over-year comparable sales including DTC, along with the anticipated opening of 21 net, new stores in the May-June 2011 timeframe, contributed to the increased inventory per selling square foot over last year.
Share Repurchase Program
During the first quarter of 2011, the Company repurchased 2.6 million shares for $36.3 million and has $145.4 million remaining under the original $200 million authorization approved by the Board of Directors in August 2010.
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 1,192 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 593 boutique and 71 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.
White House | Black Market currently operates 351 boutique and 24 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whbm.com.
Soma Intimates is the Company's developing concept with 141 boutique stores and 12 outlet stores today. Soma Intimates also publishes a catalog for its customers and conducts e-commerce at 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, www.chicosfas.com.
Executive Contact:Robert C. Atkinson Vice President-Investor Relations Chico's FAS, Inc. (239) 274-4199
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(Financial Tables Follow)
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Chico's FAS, Inc.
Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
|
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, 2011
|
|
May 1, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
% of Sales
|
|
Amount
|
|
% of Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales:
|
|
|
|
|
|
|
|
|
|
|
Chico's/Soma Intimates
|
|
$ 374,934
|
|
69.8
|
|
$ 336,700
|
|
69.9
|
|
|
White House | Black Market
|
|
162,224
|
|
30.2
|
|
144,888
|
|
30.1
|
|
|
Net sales
|
|
537,158
|
|
100.0
|
|
481,588
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
219,495
|
|
40.9
|
|
200,008
|
|
41.5
|
|
|
Gross margin
|
|
317,663
|
|
59.1
|
|
281,580
|
|
58.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Store and direct operating expenses
|
|
180,114
|
|
33.5
|
|
167,826
|
|
34.8
|
|
|
Marketing
|
|
30,898
|
|
5.7
|
|
29,080
|
|
6.0
|
|
|
National Store Support Center
|
|
32,431
|
|
6.0
|
|
28,800
|
|
6.0
|
|
|
Impairment charges
|
|
1,402
|
|
0.3
|
|
822
|
|
0.2
|
|
|
Total selling, general and administrative expenses
|
|
244,845
|
|
45.5
|
|
226,528
|
|
47.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
72,818
|
|
13.6
|
|
55,052
|
|
11.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
400
|
|
0.0
|
|
450
|
|
0.0
|
|
|
Income before income taxes
|
|
73,218
|
|
13.6
|
|
55,502
|
|
11.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
27,300
|
|
5.1
|
|
20,100
|
|
4.1
|
|
|
Net income
|
|
$ 45,918
|
|
8.5
|
|
$ 35,402
|
|
7.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
Net income per common share-basic
|
|
$ 0.26
|
|
|
|
$ 0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common and common equivalent share-diluted
|
|
$ 0.26
|
|
|
|
$ 0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding-basic
|
|
174,881
|
|
|
|
177,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding-diluted
|
|
176,112
|
|
|
|
178,833
|
|
|
|
|
Dividends declared per share
|
|
$ 0.10
|
|
|
|
$ 0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's FAS, Inc.
Consolidated Balance Sheets
(in thousands)
|
|
|
|
|
April 30,
|
|
January 29,
|
|
May 1,
|
|
|
2011
|
|
2011
|
|
2010
|
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$ 123,409
|
|
$ 14,695
|
|
$ 32,694
|
|
|
Marketable securities, at fair value
|
442,815
|
|
534,019
|
|
449,167
|
|
|
Receivables
|
5,590
|
|
3,845
|
|
3,857
|
|
|
Income tax receivable
|
713
|
|
6,565
|
|
631
|
|
|
Inventories
|
198,544
|
|
159,814
|
|
160,448
|
|
|
Prepaid expenses
|
27,368
|
|
26,851
|
|
25,546
|
|
|
Deferred taxes
|
11,479
|
|
10,976
|
|
10,684
|
|
|
Total Current Assets
|
809,918
|
|
756,765
|
|
683,027
|
|
|
|
|
|
|
|
|
|
Property and Equipment:
|
|
|
|
|
|
|
|
Land and land improvements
|
43,161
|
|
42,468
|
|
22,043
|
|
|
Building and building improvements
|
90,813
|
|
89,328
|
|
82,440
|
|
|
Equipment, furniture and fixtures
|
434,330
|
|
428,217
|
|
398,132
|
|
|
Leasehold improvements
|
429,559
|
|
426,141
|
|
414,369
|
|
|
Total Property and Equipment
|
997,863
|
|
986,154
|
|
916,984
|
|
|
Less accumulated depreciation and amortization
|
(489,900)
|
|
(468,777)
|
|
(405,140)
|
|
|
Property and Equipment, Net
|
507,963
|
|
517,377
|
|
511,844
|
|
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
|
Goodwill
|
96,774
|
|
96,774
|
|
96,774
|
|
|
Other intangible assets
|
38,930
|
|
38,930
|
|
38,930
|
|
|
Deferred taxes
|
1,791
|
|
964
|
|
38,755
|
|
|
Other assets, net
|
5,342
|
|
5,211
|
|
25,119
|
|
|
Total Other Assets
|
142,837
|
|
141,879
|
|
199,578
|
|
|
$ 1,460,718
|
|
$ 1,416,021
|
|
$ 1,394,449
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
$ 127,758
|
|
$ 106,665
|
|
$ 101,570
|
|
|
Accrued liabilities
|
121,974
|
|
94,852
|
|
126,720
|
|
|
Current portion of deferred liabilities
|
20,854
|
|
19,760
|
|
19,622
|
|
|
Total Current Liabilities
|
270,586
|
|
221,277
|
|
247,912
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities:
|
|
|
|
|
|
|
|
Deferred liabilities
|
127,769
|
|
129,837
|
|
139,600
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
Preferred stock
|
-
|
|
-
|
|
-
|
|
|
Common stock
|
1,762
|
|
1,779
|
|
1,787
|
|
|
Additional paid-in capital
|
287,853
|
|
282,528
|
|
272,153
|
|
|
Retained earnings
|
772,215
|
|
780,212
|
|
732,741
|
|
|
Accumulated other comprehensive income
|
533
|
|
388
|
|
256
|
|
|
Total Stockholders' Equity
|
1,062,363
|
|
1,064,907
|
|
1,006,937
|
|
|
$ 1,460,718
|
|
$ 1,416,021
|
|
$ 1,394,449
|
|
|
|
|
|
|
|
|
|
|
|
Chico's FAS, Inc.
Consolidated Cash Flow Statements
(Unaudited)
(in thousands)
|
|
|
|
|
Thirteen Weeks Ended
|
|
|
April 30,
2011
|
|
May 1,
2010
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
Net income
|
$ 45,918
|
|
$ 35,402
|
|
|
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization
|
24,188
|
|
23,362
|
|
|
Deferred tax benefit
|
(1,375)
|
|
(3,640)
|
|
|
Stock-based compensation expense
|
3,636
|
|
2,831
|
|
|
Excess tax benefit from stock-based compensation
|
(762)
|
|
(707)
|
|
|
Impairment charges
|
1,402
|
|
822
|
|
|
Deferred rent and lease credits
|
(4,330)
|
|
(4,140)
|
|
|
Loss on disposal of property and equipment
|
32
|
|
766
|
|
|
(Increase) decrease in assets --
|
|
|
|
|
|
Receivables, net
|
(1,745)
|
|
65
|
|
|
Income tax receivable
|
5,852
|
|
(319)
|
|
|
Inventories
|
(38,730)
|
|
(21,932)
|
|
|
Prepaid expenses and other
|
(648)
|
|
(1,373)
|
|
|
Increase in liabilities --
|
|
|
|
|
Accounts payable
|
12,283
|
|
15,203
|
|
|
Accrued and other deferred liabilities
|
31,240
|
|
33,123
|
|
|
Total adjustments
|
31,043
|
|
44,061
|
|
|
Net cash provided by operating activities
|
76,961
|
|
79,463
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Decrease (increase) in marketable securities
|
91,349
|
|
(62,816)
|
|
|
Purchases of property and equipment
|
(16,208)
|
|
(15,264)
|
|
|
Net cash provided by (used in) investing activities
|
75,141
|
|
(78,080)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from issuance of common stock
|
1,373
|
|
920
|
|
|
Excess tax benefit from stock-based compensation
|
762
|
|
707
|
|
|
Dividends paid
|
(8,835)
|
|
(7,136)
|
|
|
Repurchase of common stock
|
(36,688)
|
|
(223)
|
|
|
Net cash used in financing activities
|
(43,388)
|
|
(5,732)
|
|
|
Net increase (decrease) in cash and cash equivalents
|
108,714
|
|
(4,349)
|
|
|
CASH AND CASH EQUIVALENTS, Beginning of period
|
14,695
|
|
37,043
|
|
|
CASH AND CASH EQUIVALENTS, End of period
|
$ 123,409
|
|
$ 32,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's FAS, Inc.
|
|
|
Boutique Count and Square Footage
|
|
|
As of April 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
New
|
|
|
|
As of
|
|
|
|
|
|
|
1/29/2011
|
|
Stores
|
|
Closures
|
|
4/30/2011
|
|
|
|
|
Store count:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's frontline boutiques
|
|
|
597
|
|
2
|
|
(4)
|
|
595
|
|
|
|
|
Chico's outlets
|
|
|
63
|
|
8
|
|
-
|
|
71
|
|
|
|
|
WH|BM frontline boutiques
|
|
|
342
|
|
9
|
|
(1)
|
|
350
|
|
|
|
|
WH|BM outlets
|
|
|
21
|
|
3
|
|
-
|
|
24
|
|
|
|
|
Soma frontline boutiques
|
|
|
120
|
|
16
|
|
(2)
|
|
134
|
|
|
|
|
Soma outlets
|
|
|
8
|
|
4
|
|
(2)
|
|
10
|
|
|
|
|
Total Chico's FAS, Inc.
|
|
|
1,151
|
|
42
|
|
(9)
|
|
1,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remodels/
|
|
|
|
|
|
|
|
|
|
|
|
|
Relos and
|
|
|
|
|
|
|
As of
|
|
New
|
|
|
|
change in
|
|
As of
|
|
|
|
|
1/29/2011
|
|
Stores
|
|
Closures
|
|
SSF
|
|
4/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net selling square footage (SSF):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's frontline boutiques
|
|
|
1,606,394
|
|
4,582
|
|
(7,102)
|
|
1,877
|
|
1,605,751
|
|
|
Chico's outlets
|
|
|
166,123
|
|
18,933
|
|
-
|
|
-
|
|
185,056
|
|
|
WH|BM frontline boutiques
|
|
|
710,480
|
|
20,035
|
|
(1,273)
|
|
1,383
|
|
730,625
|
|
|
WH|BM outlets
|
|
|
40,421
|
|
5,925
|
|
-
|
|
-
|
|
46,346
|
|
|
Soma frontline boutiques
|
|
|
246,688
|
|
32,346
|
|
(5,240)
|
|
(446)
|
|
273,348
|
|
|
Soma outlets
|
|
|
14,817
|
|
8,138
|
|
(4,207)
|
|
(594)
|
|
18,154
|
|
|
Total Chico's FAS, Inc.
|
|
|
2,784,923
|
|
89,959
|
|
(17,822)
|
|
2,220
|
|
2,859,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Chico's FAS, Inc.