Chico's FAS, Inc. Reports Second Quarter Earnings Per Share of $0.27

     Chico's FAS, Inc. Reports Second Quarter Earnings Per Share of $0.27

PR Newswire

FORT MYERS, Fla., Aug. 28, 2013

FORT MYERS, Fla., Aug. 28, 2013 /PRNewswire/ --Chico's FAS, Inc. (NYSE: CHS)
today announced its financial results for the fiscal 2013 second quarter and
twenty-six weeks ended August 3, 2013.

(Logo: http://photos.prnewswire.com/prnh/20110920/FL71045LOGO)

For the second quarter, the Company reported net income of $43.6 million, a
decrease of 18.4% compared to net income of $53.4 million in last year's
second quarter, and earnings per diluted share of $0.27, a decrease of 15.6%
compared to a record $0.32 per diluted share in last year's second quarter.

For the twenty-six weeks ended August 3, 2013, the Company reported net income
of $94.7 million, a decrease of 11.5% compared to net income of $107.0 million
in the same period last year, and earnings per diluted share of $0.58, a
decrease of 9.4% compared to $0.64 per diluted share in the same period last
year.

Net Sales

For the second quarter, net sales were a record $649.5 million, an increase of
1.2% compared to $641.7 million in last year's second quarter, primarily
reflecting 112 net new stores for a square footage increase of 8.8%.
Comparable sales for the second quarter decreased 2.6% following a 5.6%
increase in last year's second quarter, reflecting lower transaction count and
average dollar sale primarily as a result of the impact of lower traffic and
the cycling of strong comparable sales last year.

The Chico's/Soma Intimates brands' comparable sales decreased 3.1% following a
7.2% increase in last year's second quarter for a two-year stack of up 4.1%
and the White House | Black Market brand's comparable sales decreased 1.5%
following a 2.3% increase in last year's second quarter for a two-year stack
of up 0.8%.

Gross Margin

For the second quarter, gross margin was $356.1 million compared to $362.2
million in last year's second quarter. Gross margin was 54.8% of net sales, a
160 basis point decrease from last year's second quarter, primarily reflecting
increased promotional activity in response to lower traffic and investment in
new distribution automation, partially offset by lower incentive compensation
as a percent of net sales.

Selling, General and Administrative Expenses

For the second quarter, selling, general and administrative expenses ("SG&A")
were $286.3 million compared to $276.1 million in last year's second quarter.
SG&A was 44.0% of net sales, a 100 basis point increase from last year's
second quarter, primarily reflecting deleverage of occupancy and marketing
expenses and the impact of investment spending on strategic initiatives,
partially offset by lower incentive compensation as a percent of net sales. 

Inventories

At the end of the second quarter, total inventories were $211.1 million
compared to $191.7 million at the end of the second quarter last year.
Inventories increased by $19.4 million, or 10.1%, primarily reflecting the
impact of new stores and the calendar shift from last fiscal year's 53^rd
week. Excluding the impact of the calendar shift as it relates to the timing
of merchandise receipts, inventories increased approximately 2.1% from prior
year, in line with planned sales growth. In-store inventory per selling square
foot decreased approximately 1.4% compared to the second quarter of last year.

Share Repurchase Program

During the second quarter of fiscal 2013, the Company repurchased 1.4 million
shares for $25 million under its $300 million share repurchase program
announced in February 2013. During the twenty-six weeks ended August 3, 2013
and July 28, 2012, the Company repurchased a total of 4.9 million shares for
$85.0 million and 1.8 million shares for $25.6 million, respectively, with
$215 million remaining under the program as of the end of the second quarter
of fiscal 2013.

ABOUT CHICO'S FAS, INC.

The Company, through its brands – Chico's, White House | Black Market, Soma
Intimates, and Boston Proper, is a leading women's omni-channel specialty
retailer of private branded, sophisticated, casual-to-dressy clothing,
intimates, complementary accessories, and other non-clothing items.

As of August 3, 2013, the Company operated 1,427 stores in the US. The
Company's merchandise is also available at www.chicos.com, www.whbm.com,
www.soma.com, and www.bostonproper.com. For more detailed information on
Chico's FAS, Inc., please go to our corporate website at www.chicosfas.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.

(Financial Tables Follow)

Executive Contact:
Todd Vogensen
Vice President-Investor Relations
Chico's FAS, Inc.
(239) 346-4199

Chico's FAS, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share amounts)
                     Twenty-Six Weeks Ended                    Thirteen Weeks Ended
                     August 3, 2013       July 28, 2012        August 3, 2013     July 28, 2012
                     Amount       % of    Amount       % of    Amount     % of    Amount     % of
                                  Sales                Sales              Sales              Sales
Net sales:
Chico's/Soma         $ 839,395    63.6%   $ 839,960    65.0%   $ 414,734  63.8%   $ 414,618  64.6%
Intimates
White House | Black    425,488    32.2%     386,225    29.9%     205,090  31.6%     194,498  30.3%
Market
Boston Proper          55,342     4.2%      66,354     5.1%      29,679   4.6%      32,606   5.1%
 Total net sales     1,320,225  100.0%    1,292,539  100.0%    649,503  100.0%    641,722  100.0%
Cost of goods sold     577,239    43.7%     551,763    42.7%     293,361  45.2%     279,542  43.6%
 Gross margin        742,986    56.3%     740,776    57.3%     356,142  54.8%     362,180  56.4%
Selling, general
and administrative     591,161    44.7%     567,797    43.9%     286,262  44.0%     276,121  43.0%
expenses
Acquisition and        914        0.1%      841        0.1%      -        0.0%      283      0.0%
integration costs
 Income from         150,911    11.5%     172,138    13.3%     69,880   10.8%     85,776   13.4%
operations
Interest income,       299        0.0%      402        0.0%      108      0.0%      219      0.0%
net
 Income before       151,210    11.5%     172,540    13.3%     69,988   10.8%     85,995   13.4%
income taxes
Income tax             56,500     4.3%      65,500     5.0%      26,400   4.1%      32,600   5.1%
provision
Net income           $ 94,710     7.2%    $ 107,040    8.3%    $ 43,588   6.7%    $ 53,395   8.3%
Per share data:
Net income per       $ 0.58               $ 0.64               $ 0.27             $ 0.32
common share-basic


Net income per       $ 0.58               $ 0.64               $ 0.27             $ 0.32
common and common
equivalent
share–diluted


Weighted average       157,379              163,898              156,589            163,822
common shares
outstanding–basic


Weighted average       158,322              164,834              157,573            164,732
common and common
equivalent shares
outstanding–diluted

                     $ 0.165              $ 0.1575             $ 0.055            $ 0.0525
Dividends declared
per share



Chico's FAS, Inc.

Condensed Consolidated Balance Sheets

(in thousands)
                               August 3, 2013  February 2, 2013  July 28, 2012
                               (Unaudited)                       (Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents      $   93,417      $    56,859       $  109,466
Marketable securities, at          208,434          272,499         248,480
fair value
Inventories                        211,148          206,849         191,694
Prepaid expenses and other         57,492           61,786          52,642
current assets
 Total          570,491          597,993         602,282
Current Assets
Property and Equipment, net        622,708          608,120         576,788
Other Assets:
Goodwill                           238,693          238,693         238,693
Other intangible assets, net       125,988          127,754         129,933
Other assets, net                  8,212            8,068           6,628
 Total          372,893          374,515         375,254
Other Assets
                               $   1,566,092   $    1,580,628    $  1,554,324
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable               $   139,727     $    129,387      $  139,800
Other current liabilities          140,197          173,024         151,936
 Total          279,924          302,411         291,736
Current Liabilities
Noncurrent Liabilities:
Deferred liabilities               141,708          132,374         129,782
Deferred taxes                     51,018           52,644          50,840
 Total          192,726          185,018         180,622
Noncurrent Liabilities
Stockholders' Equity:
Preferred stock                    -                -               -
Common stock                       1,609            1,628           1,660
Additional paid-in capital         366,032          348,775         320,161
Retained earnings                  725,736          742,580         759,838
Accumulated other                  65               216             307
comprehensive income
 Total          1,093,442        1,093,199       1,081,966
Stockholders' Equity
                               $   1,566,092   $    1,580,628    $  1,554,324



Chico's FAS, Inc.

Condensed Consolidated Cash Flow Statements

(Unaudited)

(in thousands)
                                                 Twenty-Six Weeks Ended
                                                 August 3, 2013  July 28, 2012
Cash Flows From Operating Activities:
Net income                                       $   94,710      $  107,040
Adjustments to reconcile net income to net cash
provided by operating activities —
Depreciation and amortization                        58,628         52,655
Deferred tax expense (benefit)                       3,556          (4,490)
Stock-based compensation expense                     14,304         11,005
Excess tax benefit from stock-based compensation     (1,437)        (3,367)
Deferred rent and lease credits                      (8,602)        (8,082)
Loss on disposal and impairment of property and      753            1,759
equipment
Changes in assets and liabilities, net of
effects of acquisition:
 Inventories                        (4,299)        2,775
 Prepaid expenses and other         (2,148)        5,519
assets
 Accounts payable                   1,483          30,689
 Accrued and other liabilities      (13,491)       30,032
  Net cash provided by      143,457        225,535
operating activities
Cash Flows From Investing Activities:
Decrease (increase) in marketable securities         63,914         (59,568)
Purchases of property and equipment, net             (71,745)       (78,755)
Purchases of intangibles                             (420)          -
Net cash used in          (8,251)        (138,323)
investing activities
Cash Flows From Financing Activities:
Proceeds from issuance of common stock               7,900          6,524
Excess tax benefit from stock-based compensation     1,437          3,367
Dividends paid                                      (17,777)       (17,530)
Repurchase of common stock                           (90,208)       (29,026)
 Net cash used in          (98,648)       (36,665)
financing activities
 Net increase in cash      36,558         50,547
and cash equivalents
Cash and Cash Equivalents, Beginning of period       56,859         58,919
Cash and Cash Equivalents, End of period         $   93,417      $  109,466

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 ("PSUs").

The following table sets forth the computation of basic and diluted earnings
per share shown on the face of the accompanying condensed consolidated
statements of income:

                Twenty-Six Weeks Ended         Thirteen Weeks Ended
                August 3, 2013  July 28, 2012  August 3, 2013   July 28, 2012
                (dollars in thousands)
Numerator
Net income      $  94,710       $ 107,040      $ 43,588         $  53,395
Net income and
dividends
declared
allocated to       (2,612)        (1,941)        (1,284)           (1,006)
unvested
restricted
stock
Net income
available to    $  92,098       $ 105,099      $ 42,304         $  52,389
common
shareholders
Denominator
Weighted
average common
shares             157,378,652    163,897,542    156,589,110       163,822,041
outstanding –
basic
Dilutive
effect of
stock options      943,068        935,972        983,505           910,234
and PSUs
outstanding
Weighted
average common
and common
equivalent         158,321,720    164,833,514    157,572,615       164,732,275
shares
outstanding –
diluted
Net income per
common share:
Basic           $  0.58         $ 0.64         $ 0.27           $  0.32
Diluted         $  0.58         $ 0.64         $ 0.27           $  0.32



Chico's FAS, Inc.
Store Count and Square Footage
Thirteen Weeks Ended August 3, 2013
(Unaudited)
                              As of      New     Closures  As of
                              5/4/2013   Stores            8/3/2013
Store count:
Chico's frontline boutiques   611        5       -         616
Chico's outlets               102        4       -         106
WH|BM frontline boutiques     409        7       -         416
WH|BM outlets                 48         4       -         52
Soma frontline boutiques      209        12      (3)       218
Soma outlets                  16         1       -         17
Boston Proper frontline       2          -       -         2
boutiques
Total Chico's FAS, Inc.       1,397      33      (3)       1,427
                              As of      New               Other     As of
                              5/4/2013   Stores  Closures  changes   8/3/2013
                                                           in SSF
Net selling square footage
(SSF):
Chico's frontline boutiques   1,667,756  13,193  -         111       1,681,060
Chico's outlets               258,491    9,273   -         (91)      267,673
WH|BM frontline boutiques     910,115    18,318  -         3,623     932,056
WH|BM outlets                 97,604     8,636   -         -         106,240
Soma frontline boutiques      398,717    23,951  (5,550)   (3,619)   413,499
Soma outlets                  30,773     1,909   -         -         32,682
Boston Proper frontline       2,878      -       -         -         2,878
boutiques
Total Chico's FAS, Inc.       3,366,334  75,280  (5,550)   24        3,436,088



Chico's FAS, Inc.
Store Count and Square Footage
Twenty-Six Weeks Ended August 3, 2013
(Unaudited)
                             As of      New      Closures  As of
                             2/3/2013   Stores             8/3/2013
Store count:
Chico's frontline boutiques  606        13       (3)       616
Chico's outlets              99         7        -         106
WH|BM frontline boutiques    398        20       (2)       416
WH|BM outlets                45         7        -         52
Soma frontline boutiques     193        29       (4)       218
Soma outlets                 16         1        -         17
Boston Proper frontline      -          2        -         2
boutiques
Total Chico's FAS, Inc.      1,357      79       (9)       1,427
                             As of      New                Other     As of
                             2/3/2013   Stores   Closures  changes   8/3/2013
                                                           in SSF
Net selling square footage
(SSF):
Chico's frontline boutiques  1,653,252  33,955   (7,777)   1,630     1,681,060
Chico's outlets              251,846    16,095   -         (268)     267,673
WH|BM frontline boutiques    873,183    50,436   (4,247)   12,684    932,056
WH|BM outlets                91,619     14,621   -         -         106,240
Soma frontline boutiques     370,770    57,698   (7,863)   (7,106)   413,499
Soma outlets                 30,773     1,909    -         -         32,682
Boston Proper frontline      -          2,878    -         -         2,878
boutiques
Total Chico's FAS, Inc.      3,271,443  177,592  (19,887)  6,940     3,436,088



SOURCE Chico's FAS, Inc.

Website: http://www.chicos.com
 
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