Chico's FAS, Inc. Reports Earnings Per Share Increase of 27% in Fourth Quarter and 32% in Fiscal 2012 --$0.20 fourth quarter earnings per share --16th consecutive quarter of double digit earnings per share growth --3.7% increase in fourth quarter comparable sales, on top of last year's 8.7% PR Newswire FORT MYERS, Fla., Feb. 28, 2013 FORT MYERS, Fla., Feb. 28, 2013 /PRNewswire/ --Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2012 fourth quarter and fiscal year ended February 2, 2013. The Company also provided its outlook. (Logo: http://photos.prnewswire.com/prnh/20110920/FL71045LOGO ) For the fourteen-weeks ended February 2, 2013 (the fourth quarter), when excluding non-recurring acquisition and integration costs related to the Boston Proper acquisition, the Company reported net income of $32.7 million, an increase of 29.8% compared to net income of $25.2 million in last year's thirteen-week fourth quarter, and earnings per diluted share of $0.20, an increase of 33.3% compared to $0.15 per diluted share in last year's fourth quarter. Including non-recurring acquisition and integration costs, the Company reported net income of $31.5 million, an increase of 25.6% compared to net income of $25.1 million in last year's fourth quarter, and earnings per diluted share of $0.19, an increase of 26.7% compared to $0.15 per diluted share in last year's fourth quarter. These results represent the highest fourth quarter earnings per share since 2005. For the fifty-three weeks ended February 2, 2013 (fiscal 2012), when excluding non-recurring acquisition and integration costs, the Company reported net income of $182.2 million, an increase of 26.1% compared to net income of $144.4 million for the fifty-two week year ended January 28, 2012 (fiscal 2011), and record earnings per diluted share of $1.09, an increase of 29.8% compared to $0.84 per diluted share in fiscal 2011. Including non-recurring acquisition and integration costs, the Company reported net income of $180.2 million, an increase of 27.9% compared to net income of $140.9 million in fiscal 2011, and earnings per diluted share in fiscal 2012 of a record $1.08, an increase of 31.7% compared to $0.82 per diluted share in fiscal 2011. Net Sales For the fourth quarter, net sales were $651.9 million, an increase of 14.5% compared to $569.2 million in last year's fourth quarter, primarily reflecting comparable sales growth of 3.7% and 101 net new stores for a square footage increase of 8.1%. The 3.7% increase in comparable sales for the fourth quarter followed an 8.7% increase in last year's fourth quarter, for a two-year stack of 12.4%, and reflected increases in both average dollar sale and transaction count. The comparable sales growth primarily reflected a positive customer response to the fashion assortments and the effectiveness of the Company's innovative marketing plans. The fifty-third week is excluded from comparable sales calculations. The Chico's/Soma Intimates brands' comparable sales increased 2.3%, which followed a 5.5% increase in last year's fourth quarter for a two-year stack of 7.8%, and the White House | Black Market ("WH|BM") brand's comparable sales increased 6.3%, which followed a 15.4% increase in last year's fourth quarter for a two-year stack of 21.7%. Gross Margin For the fourth quarter, gross margin was $346.7 million compared to $297.9 million in last year's fourth quarter. As a percentage of net sales, gross margin was 53.2%, a 90 basis point improvement from last year's fourth quarter, primarily reflecting a higher level of full-price selling and effective inventory management, partially offset by incentive compensation. Selling, General and Administrative Expenses For the fourth quarter, selling, general and administrative expenses ("SG&A") were $296.1 million compared to $259.1 million in last year's fourth quarter. As a percentage of net sales, SG&A was 45.4%, a 10 basis point improvement from last year's fourth quarter, primarily reflecting sales leverage on marketing and store expenses, partially offset by incentive compensation. Inventories At the end of the fourth quarter, total inventories were $206.8 million compared to $194.5 million at the end of the fourth quarter last year. Inventories increased by $12.4 million, or 6.4%, in line with planned sales growth. Share Repurchase Program During the fourth quarter of fiscal 2012, the Company repurchased 3.9 million shares for $70.1 million under its $200 million share repurchase program announced in November 2011. During fiscal 2012, the Company repurchased a total of 6.3 million shares for $107.5 million. Outlook The Company's goal has been to establish financial targets that are both sustainable and reflect strong growth metrics. The Company believes that by delivering on its long-term objectives to increase sales by a low double-digit percentage and diluted earnings per share by a mid-teen percentage over a meaningful period of time, the Company will provide its shareholders with substantial value. Consistent with these objectives, the Company announced today several strategic investments in 2013 to fuel future growth, including omni-channel capabilities, expansion into Canada, and opening its first Boston Proper stores. A conference call to review the fourth quarter and fiscal year results is scheduled for today at 8:30 a.m. EST. A live webcast of the call can be accessed at the Events Calendar page of the Chico's FAS, Inc. corporate website at 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 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 611 boutiques and 99 outlets throughout the U.S., mails a 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 401 boutiques and 45 outlets, mails 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 198 boutiques and 16 outlets, mails 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 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 at 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 go to our corporate website at www.chicosfas.com. (Financial Tables Follow) Chico's FAS, Inc. Condensed Consolidated Statements of Income (in thousands, except per share amounts) Fifty-Three Weeks Fifty-Two Weeks Fourteen Weeks Thirteen Weeks Ended Ended Ended Ended February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012 (Unaudited) (Unaudited) (Unaudited) Amount % of Amount % of Amount % of Amount % of Sales Sales Sales Sales Net sales: Chico's/Soma $ 1,647,476 63.8% $ 1,460,518 66.5% $ 395,844 60.7% $ 354,052 62.2% Intimates White House | Black 809,775 31.4% 696,358 31.7% 226,302 34.7% 186,681 32.8% Market Boston Proper 123,806 4.8% 39,484 1.8% 29,706 4.6% 28,474 5.0% Total net sales 2,581,057 100.0% 2,196,360 100.0% 651,852 100.0% 569,207 100.0% Cost of goods sold 1,129,257 43.8% 969,989 44.2% 305,124 46.8% 271,335 47.7% Gross margin 1,451,800 56.2% 1,226,371 55.8% 346,728 53.2% 297,872 52.3% Selling, general and administrative 1,161,105 45.0% 998,861 45.5% 296,118 45.4% 259,138 45.5% expenses Acquisition and 3,157 0.1% 5,133 0.2% 1,836 0.3% 148 0.0% integration costs Income from 287,538 11.1% 222,377 10.1% 48,774 7.5% 38,586 6.8% operations Interest income, 881 0.0% 1,597 0.1% 248 0.0% 212 0.0% net Income before 288,419 11.1% 223,974 10.2% 49,022 7.5% 38,798 6.8% income taxes Income tax 108,200 4.2% 83,100 3.8% 17,500 2.7% 13,700 2.4% provision Net income $ 180,219 6.9% $ 140,874 6.4% $ 31,522 4.8% $ 25,098 4.4% Per share data: Net income per $ 1.09 $ 0.82 $ 0.19 $ 0.15 common share-basic Net income per common and common $ 1.08 $ 0.82 $ 0.19 $ 0.15 equivalent share–diluted Weighted average common shares 162,989 169,153 161,051 163,871 outstanding–basic Weighted average common and common 164,119 170,250 162,203 164,801 equivalent shares outstanding–diluted Dividends declared $ 0.21 $ 0.20 $ 0.0525 $ 0.05 and paid per share Chico's FAS, Inc. Condensed Consolidated Balance Sheets (in thousands) February 2, 2013 January 28, 2012 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 56,859 $ 58,919 Marketable securities, at fair value 272,499 188,934 Inventories 206,849 194,469 Prepaid expenses and other current assets 61,786 55,104 Total Current Assets 597,993 497,426 Property and Equipment, net 608,120 550,230 Other Assets: Goodwill 238,693 238,693 Other intangible assets, net 127,754 132,112 Other assets, net 8,068 6,691 Total Other Assets 374,515 377,496 $ 1,580,628 $ 1,425,152 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 129,387 $ 100,395 Other current liabilities 173,024 137,714 Total Current Liabilities 302,411 238,109 Noncurrent Liabilities: Deferred liabilities 132,374 125,690 Deferred taxes 52,644 52,125 Total Noncurrent Liabilities 185,018 177,815 Stockholders' Equity: Preferred stock - - Common stock 1,628 1,657 Additional paid-in capital 348,775 302,612 Retained earnings 742,580 704,631 Accumulated other comprehensive income 216 328 Total Stockholders' Equity 1,093,199 1,009,228 $ 1,580,628 $ 1,425,152 Chico's FAS, Inc. Condensed Consolidated Cash Flow Statements (in thousands) Fifty-three Fifty-two Weeks Ended Weeks Ended February 2, 2013 January 28, 2012 (Unaudited) Cash Flows From Operating Activities: Net income $ 180,219 $ 140,874 Adjustments to reconcile net income to net cash provided by operating activities — Depreciation and amortization 108,467 99,430 Deferred tax (benefit) expense (4,208) 19,489 Stock-based compensation expense 26,453 15,198 Excess tax benefit from stock-based (7,952) (2,643) compensation Deferred rent and lease credits (16,812) (19,073) Loss on disposal and impairment of property 2,765 2,949 and equipment Changes in assets and liabilities, net of effects of acquisition — Inventories (12,379) (20,812) Prepaid expenses and other assets (3,956) (3,491) Accounts payable 28,992 (14,571) Accrued and other liabilities 66,683 37,831 Net cash provided by operating activities 368,272 255,181 Cash Flows From Investing Activities: Purchases of marketable securities (298,460) (592,962) Proceeds from sale of marketable securities 214,783 937,987 Acquisition of Boston Proper, Inc., net of - (213,561) cash acquired Purchases of property and equipment, net (164,690) (131,757) Net cash used in investing activities (248,367) (293) Cash Flows From Financing Activities: Proceeds from issuance of common stock 16,531 4,549 Excess tax benefit from stock-based 7,953 2,643 compensation Dividends paid (34,928) (34,152) Repurchase of common stock (111,521) (183,290) Cash paid for deferred financing costs - (414) Net cash used in financing activities (121,965) (210,664) Net (decrease) increase in cash and cash (2,060) 44,224 equivalents Cash and Cash Equivalents, Beginning of 58,919 14,695 period Cash and Cash Equivalents, End of period $ 56,859 $ 58,919 Supplemental Detail on Earnings Per Share Calculation In accordance with accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of basic earnings per share pursuant to the "two-class" method. For the Company, participating securities are comprised of unvested restricted stock awards. Earnings per share is determined using the two-class method, as it is more dilutive than the treasury stock method. Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of potential common shares from securities such as stock options and performance-based restricted stock units. The following table sets forth the computation of basic and diluted earnings per share shown on the face of the accompanying consolidated statements of income (in thousands, except per share amounts): Fifty-three Fifty-two Fourteen Thirteen Weeks Ended Weeks Ended Weeks Ended Weeks Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 Numerator $ 180,219 $ 140,874 $ 31,522 $ 25,098 Net income Net income and dividends (3,309) (1,834) (580) (355) declared allocated to unvested restricted stock Net income available to $ 176,910 $ 139,040 $ 30,942 $ 24,743 common stockholders Denominator Weighted average common 162,988,767 169,152,870 161,051,252 163,871,369 shares outstanding – basic Dilutive effect of 1,130,313 1,097,574 1,151,804 929,542 outstanding awards Weighted average common and common 164,119,080 170,250,444 162,203,056 164,800,911 equivalent shares outstanding – diluted Net income per common share Basic $ 1.09 $ 0.82 $ 0.19 $ 0.15 Diluted $ 1.08 $ 0.82 $ 0.19 $ 0.15 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-three Fifty-two Fourteen Thirteen Weeks Ended Weeks Ended Weeks Ended Weeks Ended Net income: February 2, January 28, February 2, January 28, 2013 2012 2013 2012 GAAP basis 180,219 140,874 31,522 25,098 Add: Impact of acquisition and integration costs, net 1,973 3,574 1,181 96 of tax Non-GAAP adjusted basis $182,192 $144,448 $32,703 $25,194 Net income per diluted share: GAAP basis 1.08 0.82 0.19 $0.15 Add: Impact of acquisition and integration costs, net 0.01 0.02 0.01 0.00 of tax Non-GAAP adjusted basis $1.09 $0.84 $0.20 $0.15 Store Count and Square Footage As of February 2, 2013 (Unaudited) As of New Closures As of 1/28/2012 Stores 2/2/2013 Store count: Chico's frontline 601 14 (9) 606 boutiques Chico's outlets 83 16 - 99 WH|BM frontline 364 40 (6) 398 boutiques WH|BM outlets 27 18 - 45 Soma frontline 164 36 (7) 193 boutiques Soma outlets 17 1 (2) 16 Total Chico's FAS, 1,256 125 (24) 1,357 Inc. As of New Closures Other changes in As of 1/28/2012 Stores SSF 2/2/2013 Net selling square footage (SSF): Chico's frontline 1,631,674 37,474 (21,583) 5,687 1,653,252 boutiques Chico's outlets 213,475 38,371 - - 251,846 WH|BM frontline 768,442 102,689 (10,859) 12,911 873,183 boutiques WH|BM outlets 53,263 38,356 - - 91,619 Soma frontline 326,858 70,446 (12,112) (14,422) 370,770 boutiques Soma outlets 32,676 1,716 (3,669) 50 30,773 Total Chico's FAS, 3,026,388 289,052 (48,223) 4,226 3,271,443 Inc. Executive Contact: Todd Vogensen Vice President-Investor Relations Chico's FAS, Inc. (239) 346-4199 SOURCE Chico's FAS, Inc. Website: http://www.chicos.com
Chico's FAS, Inc. Reports Earnings Per Share Increase of 27% in Fourth Quarter and 32% in Fiscal 2012
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