UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report: (Date of earliest event reported): May 28, 2014
Chicos FAS, Inc.
(Exact Name of Registrant as Specified in its Charter)
Florida
(State or Other Jurisdiction
of Incorporation)
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001-16435 |
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59-2389435 |
(Commission
File Number) |
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(IRS Employer
Identification No.) |
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11215 Metro Parkway, Fort Myers, Florida |
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33966 |
(Address of Principal Executive Offices) |
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(Zip code) |
(239) 277-6200
(Registrants Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition
On May 28, 2014, Chicos FAS, Inc. (the Company) held a conference call with the investment community to discuss its
financial results for the first quarter ended May 3, 2014. A copy of the transcript of the conference call is attached hereto as Exhibit 99.1.
The information presented herein shall not be deemed filed for purposes of Section 18 of the Securities and Exchange Act of
1934, as amended (the Exchange Act), or otherwise subject the Company to liability pursuant to that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as
expressly stated by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
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Exhibit 99.1 |
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Transcript of conference call held by Chicos FAS, Inc. on May 28, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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CHICOS FAS, INC. |
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Date: May 29, 2014 |
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By: |
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/s/ Pamela K Knous |
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Pamela K Knous, |
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Executive Vice President Chief Financial Officer |
INDEX TO EXHIBITS
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Exhibit Number |
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Description |
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Exhibit 99.1 |
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Transcript of conference call held by Chicos FAS, Inc. on May 28, 2014 |
Exhibit 99.1
THOMSON REUTERS STREETEVENTS
EDITED TRANSCRIPT
CHS Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
EVENT DATE/TIME: MAY 28, 2014 / 12:30PM GMT
OVERVIEW:
CHS reported 1Q14 net sales of $682m and EPS of $0.26.
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1
MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
CORPORATE PARTICIPANTS
Todd Vogensen Chicos FAS, Inc. SVP Finance
Dave Dyer Chicos FAS, Inc. CEO
Pam Knous Chicos FAS, Inc. CFO
Donna Noce Chicos FAS, Inc. Brand President, White House/Black Market
Cinny Murray Chicos FAS, Inc. Brand President, Chicos
Laurie Van Brunt Chicos FAS, Inc. Brand President, Soma Intimates
Sheryl Clark Chicos FAS, Inc. Brand President, Boston Proper
CONFERENCE CALL PARTICIPANTS
Edward Yruma
KeyBanc Capital Markets Analyst
Susan Anderson FBR Capital Markets & Co. Analyst
Janet Kloppenburg JJK Research Analyst
Anna Andreeva Oppenheimer Capital Analyst
Roxanne Meyer UBS Analyst
Kayla
Berg Piper Jaffray Analyst
Dana Telsey Telsey Advisory Group Analyst
Liz Dunn Macquarie Research Analyst
Lorraine Hutchinson BofA Merrill Lynch Analyst
Richard Jaffe Stifel Nicolaus Analyst
Unidentified Participant Analyst
PRESENTATION
Operator
Good morning. And welcome to the Chicos
FAS, Inc. first-quarter 2014 earnings conference call.
(Operator Instructions)
I would now like to turn the conference over to Todd Vogensen, Senior Vice President of Finance. Please go ahead.
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
Thanks, Denise. And good morning everyone. Welcome to the Chicos FAS first-quarter earnings conference call and Webcast. Joining me today at our national
store support center in Fort Myers are Dave Dyer, CEO, and Pam Knous, CFO. Also, for the Q&A portion of the call, we will be joined by our Brand Presidents, Cinny Murray for Chicos, Donna Noce for White House/Black Market, Laurie Van Brunt
for Soma Intimates, and Sheryl Clark for Boston Proper.
Before Dave begins his executive overview, we would like to remind you that our discussion this
morning includes forward-looking statements and quarter-to-date data points which are subject to and protected by the Safe Harbor statement found in our SEC filings and in todays earnings release. These forward-looking statements are subject
to a number of factors and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that
projected results, expressed or implied by such statements, will not be realized.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Also, the results discussed on this call exclude last years nonrecurring
acquisition and integration costs for Boston Proper. A reconciliation to GAAP results is included in todays press release for your reference.
And
with that, I will turn it over to Dave.
Dave Dyer - Chicos FAS, Inc. - CEO
Thanks, Todd. Im pleased to have all four brand presidents on the call with us this morning to help answer any questions that you have on their business.
I believe that I speak for all of them in saying that we are thrilled to see the return of warmer weather. In fact, our sales trends have improved since the first quarter.
Through Memorial Day, quarter-to-date total Company sales are up approximately 5%, reflecting a 1% positive comp on our unaudited daily flash sales report.
For the first quarter, Chicos FAS was not immune to the unseasonable weather that plagued other retailers in our sector, and which prolonged the highly promotional environment that marked retails fourth quarter.
Comparable store sales by brand were a mixed bag, resulting in a minus 2.6% total Company comp versus a flat comp in the first quarter of 2013. Additionally,
the promotional environment, as well as other brand-specific issues, led to results that did not meet our expectations. Earnings per share for the first quarter were $0.26, down from our all-time high of $0.32 per share last year.
Lets start with the White House/Black Market brand. Through Memorial Day, White House has low single positive digit comp, which is a significant
improvement in trend from the first-quarter comp. White House/Black Market is up against a strong 6.4% comp performance from last year.
The White House
plan for this spring was to deliver a truly differentiated collection by emphasizing elevated fashions and by de-emphasizing our basic offerings. We believe that basics were over-penetrated last year, particularly in quarter two. We did successfully
deliver on our promise to offer unique assortment of couture-like items, such as our polished casual jacket collections, the launch of Saint Honore denim, and our instantly slimming dress styles, all of which performed very well in the first
quarter.
However, our decision to reduce investment in basics, and the reduction of depth and color, did not leave us with the appropriate inventory to
drive volume in this highly promotional environment. Due to weather-related traffic weakness early in the quarter, promotions were needed to sell through the new higher average unit cost assortments pressuring both sales and margin.
With negative comp sales results, we ended the quarter with about $5 million higher in White House inventory levels than we would have desired. We anticipate
selling through these units will impact sales and margin in the current quarter. We also believe that were fully on track for fall and are confident about having rectified the balance of our assortments and the rest of the years color
flow.
As I commented earlier, White House/Black Markets momentum improved at the start of quarter two. Mothers Day was strong, especially in
our fashion sweaters, woven tops and dress collections. Our new blue color is resonating with customers. Most importantly, though, we believe that going forward weve made much progress on the assortment balance between couture-like fashion and
basics.
At the Chicos brand, when the weather turned late in the first quarter, customers were ready to buy, loving the trend-right and unique
fashion they expect from us. In particular, they loved the white-on-white and feminine tones in our boutiques, especially the effortless shirt, long-over-lean tops, and statement necklaces that we featured in our TV spots. All of these categories
performed above expectations.
Chicos comparable sales for the first quarter were slightly negative, just under 1%, with the trend getting
progressively stronger throughout the quarter, ending with a positive high single-digit comp in April. Once again, Im pleased to report that the Chicos customer file was at an all-time high. We defended our market share through the
highly promotional period over the last several months, selectively targeting customers with promotional offers most relevant to her. I believe that Chicos is poised and ready for a strong second quarter and fall season.
As for Soma, I couldnt be more proud of our team for the exceptional performance they continued to deliver. Somas high single-digit comp for the
first quarter takes them to 20 consecutive quarters with a positive comp. Sales performance was strong throughout the entire quarter.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
This quarter, continuing our focus on being a bra destination, we significantly
increased our styles and fashion assortment in smaller bra bands and cup sizes. Somas active customer file growth continues to outpace our new store growth as the marketing, driven by ongoing national TV, provides us a broad reach and further
extends brand awareness.
In the first quarter we launched a truly innovative bra that offers exclusive stay cool technology that breathes and supports in
sizes ranging from 32A to 40DD. Additionally, our sleepwear business is terrific. Somas sleepwear has developed a very loyal following, driven by its soft and luxurious exclusive cool nights fabric and embraceable PJ collection.
To quickly update Somas Q2 performance, we just cycled Mothers Day. Soma is likewise starting the quarter with positive momentum.
Boston Propers principal focus in quarter one was to keep a laser focus on balancing their assortment. And there were encouraging signs of progress in
late quarter catalog results. The focus centers on delivering the appropriate mix of color, print, boho chic, best sellers and bringing sexy back.
I
believe were on track to deliver a full fall offering that our core Boston Proper customers will be thrilled with. Boston Propers boutique roll-out plans are on track and our store grand openings remain strong. For the stores that opened
in 2013, Boston Propers sales productivity is the highest in the Company.
As we expand the Boston Proper footprint outside the state of Florida,
brand recognition will increase significantly. The unique technology deployed in our boutiques is driving sales for the brands entire online assortment, where she can find many more colors, styles, sizes and collections that are not available
in the boutique or in the catalog. Our belief in Boston Propers growth potential remains as strong as ever.
Before I turn the call over to Pam, I
wanted to provide an update on some of our strategic capital investments, including omnichannel development, international expansion, and the evolution of our loyalty programs. Lets start with omnichannel which Ive said before is central
to our long-term growth strategy.
We continue to invest in technology that allows our customers to shop how, when, and where she chooses to shop. We
remain focused on our cloud-based digital retail theater, which will fully integrate community, content and commerce on all of her devices and in the boutiques that she favors.
Chicos testing of iPads in boutiques has been very promising, as we empower our associates with our customers purchase history and personalize
suggested selling options, enabling associates to create an impactful assortment specific to each customers wants and needs. iPads have been rolled out to our top boutiques with plans to expand to additional boutiques in time for the holidays.
Chicos iPads, along with the tech tables in Boston Proper, and the tech tables in test mode at White House/Black Market, now offer the full breadth of our DTC exclusive assortment to our customers in our boutiques.
As for international news Hola, Mexico. Chicos, along with our franchise partner Liverpool, successfully launched the Chicos brand in
Mexico in April. And I might say it was a splash. I witnessed this launch and was beyond thrilled to see hundreds of customers lined up for our boutique grand opening and ribbon cutting. It was truly amazing.
Our grand openings were among the highest sales volumes that Liverpool has experienced with any US retail brand. Our expansion in Mexico includes standalone
boutiques as well as shop-in-shops located within Liverpool department stores. Currently there are two boutiques and six shop-in-shops operating in Mexico, with a plan to expand our footprint further and faster this fall.
Up north, White House/Black Markets Canadian locations continue to outpace expectations. Chicos will be joining White House in Canada with three
locations opening later this summer. More to come as we embark on a very exciting time as our Company grows globally.
Turning to loyalty, I mentioned in
our last call that White House had relaunched its loyalty programs as WHBM Rewards. This tier-based program benefits our most loyal customers with even more rewards, and provides incentives for all customers to move up to the next level. Early
results are very promising. Were experiencing record sign-ups for the programs and the brands active customer file again is at an all-time high. We fully expect to realize our own rewards from this initiative, including an increase in
shopping frequency and higher average purchases.
This summer Soma will get its own well-deserved loyalty program titled Love Soma Rewards. It, too, will
be a tier-based program designed to increase frequency and spend. And we will happily grandfather our current Passport members into the program. Ill have more details on this new Soma launch in our next call.
Finally, turning back to the Chicos brand, a quick update on our burgeoning golf line. As you all know, Chicos has been rapidly expanding its golf
assortment, which is currently available in over 400 boutiques and online at Chicos.com. It provides women with unique and stylish golfwear, otherwise in short supply in the marketplace. Our Zenergy golf collection provides the golfer with real
functionality, including pockets in all the right places, UV protection, and moisture-wicking technology.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Just last month Chicos held its first golf tournament, the Chicos Patty Berg
Memorial, here in Fort Myers. 144 LPGA hopefuls teed up for the Symetra tour event to help fight ovarian cancer. The field included our own sponsored Symetra circuit pro, Stefanie Kenoyer, who proudly wears Zenergy golf collection on tour. If
youve seen our golf commercial on the Golf channel, thats Stefanie.
In the days leading up to the tournament she represented Chicos on
Golf channels morning drive program, and is a great brand investor who advises on the functionality of our apparel. All in all, the tournament was a huge success, the first of many more, we hope. Well keep you posted on further
developments in this exciting new round for Chicos.
And with that, Im going to turn the call over to Pam.
Pam Knous - Chicos FAS, Inc. - CFO
Thanks, Dave. And good morning, everyone. I would like to provide additional details on our first-quarter results.
Net sales were $682 million, an increase of 1.6% compared to our prior record of $671 million in quarter one last year, reflecting 99 net new stores, offset
by decreases in comparable sales and in Boston Proper, compared to the prior year. Consistent with others in our sector, weather impacted our results in a major way, as inclement weather early in the quarter led to a highly promotional environment,
while we transitioned our fashion offering from spring to summer. The volume and depth of promotions in the quarter impacted both sales and margin.
Total
Company comparable sales for the quarter decreased 2.6% following flat comparable sales in last years first quarter, reflecting lower average dollar sales with flat transaction count. Combined, Chicos/Soma comparable sales increased
0.4%, following a 2.8% decrease in last years first quarter. The White House/Black Market brands comparable sales decreased 8.6%, following a 6.4% increase last year.
With the exception of a brief period of positive sales performance post the Valentines holiday, February and March were challenging for us, with
significantly improved performance in April as weather improved. For the first quarter, gross margin was $383 million, compared to $387 million in last years first quarter. Gross margin rate was 56.2% of net sales, a 150 basis point decrease
from last years first quarter.
As previously mentioned, in response to lower traffic early in the quarter, promotional activity resulted in a
decrease in gross margin rate, partially offset by lower incentive compensation as a percent of net sales. In-store inventories per square foot increased 4.9%, when compared to last years first quarter, which reflects the higher average unit
costs at White House/Black Market, as both Chicos and Soma have slightly lower in-store inventory per square foot compared to last year.
When
excluding the $11.9 million of inventory related to new store activity, total inventories increased 5.6%, or $13.5 million over the same period last year, again reflecting higher AUC at White House. Exiting the first quarter, we feel that our
inventory is between $5 million to $10 million higher than we would like.
For the first quarter, selling, general and administrative expenses were 46.8%
of net sales, a 130 basis point increase from last years first quarter, primarily reflecting sales deleverage of store expenses including occupancy and the impact of our strategic initiatives, partially offset by lower incentive compensation
as a percent of net sales. In quarter one, SG&A expenses were $319 million, an increase of $14 million compared to last year, $4 million of which reflects our strategic initiatives of international, Boston Proper new stores, loyalty program
updates, and omnichannel expenses.
Total SG&A less strategic initiatives increased just 3% over the same quarter last year, compared to square
footage growth of 7%. This demonstrates that in a challenging environment, we controlled the controllables.
Capital expenditures in the quarter totaled
$34.5 million, primarily comprised of new stores and our strategic initiatives. We opened 32 new stores in the quarter, for a year-over-year net increase of 99 stores. In light of current business trends, we have reduced the total new store opening
count for 2014 to 107, compared to our previous estimate of 120 to 130.
Our 2014 new stores include 35 Soma front-line stores and one outlet, 15 Boston
Proper stores, 5 international stores including one outlet, 15 Chicos front-line stores and 9 outlets, and 18 White House/Black Market front-line stores and 9 outlets. This reduction in new stores planned for this year does not temper our
long-term goal of annual high single-digit square footage growth, nor does it change our estimates of domestic store potential.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Likewise, we believe that our strategic initiatives are the right investments for the
long term. Our current estimate for capital spend on our strategic initiatives in 2014 is approximately $25 million, $9 million of which occurred in the first quarter. This represents a decrease of approximately $5 million from our previous estimate
for 2014, reflecting our decision to deploy our new point-of-sale hardware in 2015 to eliminate any potential disruption during the holiday selling season. Taking into account the aforementioned update to our capital plan, we anticipate our capital
spend for 2014 to be between $125 million and $130 million, down approximately $15 million from the target we communicated last quarter.
As we start the
quarter with total sales up, I would also like to comment that the highly competitive environment continues. And we anticipate a higher level of promotional activity for the remainder of the quarter. Even in this environment, our portfolio brands
are well positioned to defend and grow our share of the business.
With that, I will turn the call back over to Dave for his wrap-up comments.
Dave Dyer - Chicos FAS, Inc. - CEO
Okay. Thanks, Pam. As we discussed, quarter one was a challenging quarter as we battled both the elements and a continued highly promotional competitive
environment.
At Chicos FAS, we play to win. We have the right formula to win. We have the right people to win. And where we see opportunities for
improvement, we have the flexibility and nimbleness to course correct.
In the end, the things that set us apart from our competition are our innovative,
unique, trend-right fashion and our most amazing personal service which we provide to our customers. We remain committed to making the strategic investments in omnichannel, store growth, and international that will enable us to win over the long
term. We will continue to react to the business environment to properly manage our investments and expenses.
As we look to the remainder of the second
quarter and to the back half of the year, Im encouraged by our current sales trends. Im excited about the plans we have in place for the fall season. Despite having inventory balances $5 million to $10 million for total Chicos FAS,
higher than I would like, and a persistent promotional environment, I believe we will achieve our 2014 goals of an increase in total sales, comparable sales, and gross margin dollars in earnings per share.
Thank you and we will now open up the call for questions. Todd?
Todd Vogensen - Chicos FAS, Inc. -
SVP Finance
All right. Thank you, Dave. That concludes our prepared comments. Since we have several executives on the call today Im
going to request that everyone please limit yourself to one question. This way, we will be better able to accommodate as many callers as time permits. And with that, I will turn the call back over to Denise.
QUESTION AND ANSWER
Operator
(Operator Instructions)
Edward Yruma of KeyBanc.
Edward Yruma - KeyBanc Capital Markets - Analyst
Hi. Good morning and thanks for taking my question. I just wanted to try to understand the objective that youre hoping to accomplish by pulling back on
the store openings this year, particularly given that I think you are seeing some improvement in sales trend. And is there a negative financial implication either in terms of payments to landlords or things like that, that we should consider as a
result of fewer store openings? Thank you.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Dave Dyer - Chicos FAS, Inc. - CEO
No, theres no negative payment to landlords or anything like that. A lot of the stores that were committed late in the fourth quarter, we were able to
push into the next year. So it just is a temporary delay in them.
And I just think in the environment, we wanted to try to get our capital expenses more
in line with our business. And thats what we really reacted to. Were still opening 100 net new stores next year. So if you look at that, I assume how many are we closing? around 20? About 20. So thats 120 stores
were still opening to get 100 net new stores. Thats still a pretty aggressive launch of new stores.
So, yes, were pedal to the medal on
it. Were still going to be very aggressive in store openings as we get into 2015.
You may see more stores open in Canada. Stores have been
absolutely fantastic, exceeding our performance, as we have opened those. And with the Chicos opening this fall well now have two brands there that will give us a lot of insight into what our potential in the Canadian market is.
So we may grow a little faster there. But were still very bullish on doing both bricks and mortar and online. This whole seamless omnichannel to us is
really what its all about.
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
And Dave, we were talking earlier about how this really doesnt impact the long-term goals of growing at a high single-digit rate of square footage
growth, nor does it impact any of the potential store openings that we see over the course of time.
Edward Yruma - KeyBanc Capital Markets -
Analyst
Great. Thanks so much.
Operator
Susan Anderson of FBR Capital Markets.
Susan Anderson - FBR Capital
Markets & Co. - Analyst
Hi. Thanks for taking my question and a good job managing through a really tough quarter. I was wondering
if you could maybe talk about I thought you did a really good job on highlighting the second quarter to date trends, which it sounds like things have improved. Maybe whats driving a little bit more color on the White House/Black
Market improvement there.
And then also if you could talk about just the Chicos momentum in the second quarter. Im not sure if you really
provide too much color on that one. It sounds like Somas off to a good start, though, too.
Dave Dyer - Chicos FAS, Inc. -
CEO
Ive got reinforcements here today so Im going to let them comment on that. Donna, do you want to start?
Donna Noce - Chicos FAS, Inc. - Brand President, White House/Black Market
Good morning, Susan, how are you? Just to highlight a little bit about whats happening in White House/Black Market, as Dave mentioned, we made a
conscious effort to adjust our assortments going into 2014 to really bring back more of the couture-like differentiated collections that the brands been known for. And with that, we pulled back probably a little too aggressively on some of our
basic entry level price point offering as well as color.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
As we moved into second quarter, were getting an improved balance, although we are
really looking forward to third and fourth quarter when everything normalizes. But we have an improved balance in our color assortment. Our new color and our new print and pattern direction is really resonating with the customer.
And weve also geared ourselves up to compete more effectively in a very competitive environment. So we really feel that we are better positioned in
second quarter to handle the promotional environment.
Cinny Murray - Chicos FAS, Inc. - Brand President, Chicos
Hi. This is Cinny with Chicos, Susan. I feel great about second quarter for a couple reasons. One, our inventorys in a good position. And, as Dave
alluded to in his comments, really, we were highly impacted by the weather and so saw a dramatic turnaround in the April time period, which is when our knit business opened up. And as you know, in the apparel business, if your knits are working
youre in good shape.
So, weve taken a lot of time to rebrand our basics, brought a lot of newness in. If youve been to our stores, took
a major position on fashion knits. So, theres a lot thats working.
And where we had great success in the woven category with our TV spots,
the basic whites, the long over lean, all of the novelty fashion, that continues in our assortments for second quarter. So, I anticipate a nice quarter.
Susan Anderson - FBR Capital
Markets & Co. - Analyst
Great, thanks. So, it sounds like all the formats are comping positive second quarter to date then?
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
Yes. I think what Id say is we feel like were positioned really well and we have good momentum going into the quarter.
Dave Dyer - Chicos FAS, Inc. - CEO
We commented specifically on White House because it has been a very nice turnaround. But, other than that, as we get our point in time snapshot of where our
business is which, by the way, as weve always said is not guidance, is not a reflection of where we anticipate the quarter will be, but rather a snapshot in time of where we are., But I think we have come through both Mothers Day
and Memorial Day which are two certainly pretty good events as you enter this quarter. Soma, how are you doing?
Laurie Van Brunt - Chicos FAS, Inc.
- Brand President, Soma Intimates
Good. We feel good about our trends going forward in second quarter. Weve had great success with
our sleepwear assortments and our lounge assortments. Our goal is to be a bra destination and we feel were progressing in that path.
We also have a
new loyalty program thats going to be launching later in the second quarter, which really will drive and increase our frequency and our customer spend. So were very excited about that, as well. And also in the quarter we have our
semi-annual sale and we will promote to be competitive.
Dave Dyer - Chicos FAS, Inc. - CEO
And Boston Proper has strong, positive momentum going in second quarter, too. You want to just talk a little about your business, Sheryl?
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Sheryl Clark - Chicos FAS, Inc. - Brand President, Boston Proper
Yes. We are pleased to see an improvement this quarter. Our refocus on color, prints, boho chic styling, and a generally more sexy appeal are driving customer
demand. We need to consistently deliver what shes looking for to regain her loyalty. And, as you know, in the direct business it takes a little longer to get her back, but we are focused on getting her back and we feel well see the full
effect of our efforts in the fall assortment.
Susan Anderson - FBR Capital Markets & Co. - Analyst
Great. It sounds like things are off to a good start. Good luck in the second quarter.
Operator
Janet Kloppenburg of JJK Research.
Janet Kloppenburg - JJK Research - Analyst
Good morning, everyone. I got on a little bit late, Pam, so I was wondering if you detailed where the inventory levels would be at the end of the quarter, and
if your clearance markdowns would be comparable to last year at the end of the quarter.
And also for Cinny and for Donna, I was wondering if you could
share your thoughts on the core categories, lets say, of woven tops and bottoms at Chicos and dresses at White House. It seems that theres a lot of pricing pressure in those categories. And Im wondering if you think that you
could normalize your full price selling or if youll have to continue to be promotional in those categories. Thank you.
Pam Knous - Chicos FAS, Inc. -
CFO
I would say, Janet, you did join late but we did not provide any commentary on quarter two ending inventory balances.
Dave Dyer - Chicos FAS, Inc. - CEO
Were about $5 million to $10 million higher than we would like to be right now.
Janet Kloppenburg - JJK Research - Analyst
Do you think youll be improved by the end of the quarter, Dave?
Dave Dyer - Chicos FAS, Inc. -
CEO
We certainly are trying to clear anything that we have that we dont think carries forward. Luckily with us, some of the
investment in additional inventory is in seasonal basics, which means that we may have too much too soon, but hopefully not too much as long as we can make a reasonable sales plan in the second quarter.
There is about a $5 million excess in White House/Black Market which we identified. And that obviously is going to cost us some to liquidate. And I assume,
Donna, you plan to address it in the quarter.
Donna Noce - Chicos FAS, Inc. - Brand President, White House/Black Market
Yes. What we carried into second quarter we will address in second quarter, so the intention is that it will not carry over into third quarter.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Janet Kloppenburg - JJK Research - Analyst
Okay. What about the pricing pressure in the dress category? I see it all around you, Donna, and Im just wondering what youre thinking about your
reg price selling there.
Donna Noce - Chicos FAS, Inc. - Brand President, White House/Black Market
Janet, theres a couple of things with dresses. As with the whole assortment, we went back to a lot of our couture-like unique product, and that product
is working very well for us. Those are our differentiators. As we see the environment, we definitely see it remaining extremely competitive.
And as it
relates to the dress business, as we need to move, we are prepared to move in second quarter. But right now we are seeing great success in where weve made investments. Instantly slimming was very strong for us coming out of second quarter. Our
casual knit dress business is actually quite strong. And our little bit more upscale couture-like dresses have been performing and resonating.
But we
will not sit on inventory. And as we need to move through things as the environment calls for and as our customer votes we will do that so that we clear through the inventory in the quarter.
Dave Dyer - Chicos FAS, Inc. - CEO
Its an interesting thing in White House/Black Market, we said that our inventory was driven by higher average unit costs. So, when you really look at
their inventory, their units are down from last year but their dollar inventory is up. So, its a little bit of a different situation.
Its not
that we have excess units that we have to move. Its just that price point, when you look at the mix of it, is at a much higher average unit cost price, which causes our total inventory to be elevated. And, again, we said that amount for White
House was around $5 million. And I know that shes aggressively working through that. And getting the unit, the average unit cost, more in balance by bringing back in some of the basics that she needs to really drive her business, especially in
this promotional environment.
Janet Kloppenburg - JJK Research - Analyst
And Cinny, whats happening there?
Cinny Murray - Chicos FAS, Inc. -
Brand President, Chicos
Hi, Janet. As I mentioned earlier, knits are in great shape, and wovens, as well, continue to trend go
forward. I think what youre seeing is we deliver a new floorset every three weeks, and we change out both sides of the floor and center stage, and we change out the color palette.
So, to keep our inventory turn in line, we move quickly to get rid of things. And Im just finding, if I get to a very sharp price quickly on big items,
I clear it faster. So, youre probably noticing we took a couple pants to a new price point. Ill continue to do that because I really dont want the inventory to grow in the sales section. I think it takes away from the fashion
aesthetic of the floor.
Janet Kloppenburg - JJK Research - Analyst
Okay. Lots of luck. Thank you.
Operator
Anna Andreeva of Oppenheimer.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Anna Andreeva - Oppenheimer Capital - Analyst
Great. Thanks and good morning, guys. A couple of questions. To Pam, could you give us a little bit more color on the $9 million in the strategic investments
during the quarter? I think you had called out $4 million in the release. And just how should we think about SG&A ramp as we go through the year?
And
second question, on the buyback, we noticed you guys werent as active as you are historically. How does the Board view priorities for cash? How much minimum cash do you need on the balance sheet? Thanks.
Pam Knous - Chicos FAS, Inc. - CFO
Okay. As far as the initiatives, we did update the total impact to be about $25 million this year. We do see that playing out fairly evenly across the course
of the quarter, so nothing particularly lumpy in that.
If you think about the initiatives being the opening of the Boston Proper store, thats
happening primarily over the first three quarters. International for Chicos is happening in the August time frame. The loyalty programs are occurring across the course of the year. And the development of the point of sale is something that is
occurring over the course of the year.
So, theres nothing particularly spikey. So, you can think of that as being fairly evenly spread over the
remainder of the year.
As far as the buyback program, we did not purchase any shares under our $300 million authorization this quarter. We did purchase
shares associated with employee exercises and other employee-related matters. There are many factors that our Board considers when they think about share repurchase activity.
That is something that, if you consider our past performance, is a very key part of our program, to return excess cash to shareholders. So that program
continues. We have $300 million available to us. And were clearly comfortable with our position at the end of the first quarter.
Operator
Roxanne Meyer of UBS.
Roxanne Meyer - UBS - Analyst
Good morning. My question is on your loyalty programs that youre going to be launching. Im just wondering if you could share some metrics
on the Chicos program that will help us appreciate the impact as you create these tiered programs for White House and Soma, and what kind of benefits we could see. Thanks.
Dave Dyer - Chicos FAS, Inc. - CEO
Chicos really hasnt launched their loyalty program. What we have done is in White House and maybe Donna you can talk a little bit about
that, and then Laurie can talk about Soma. Chicos will come next spring. Actually were still working on it. Right now, our traditional Passport program is still in effect at Chicos.
The nice thing, as weve said, about our loyalty programs is, when you look at our brands, over 90% of our customers are in our loyalty programs, which
gives us really great knowledge about how and where they shop. And that is a very rich database that we are really looking to I guess exploit is maybe the wrong word, but certainly were trying to take advantage of our knowledge of our
customer. Donna?
Donna Noce - Chicos FAS, Inc. - Brand President, White House/Black Market
Hi, Roxanne. As you know, we launched the rewards program in early first quarter. And probably as youre aware its going to take time for us to
really be able to report on significant metrics. But what we are seeing very early on is extremely promising. We are at record sign-ups for our rewards program. And, as Dave mentioned earlier, our active customer file is at an all-time high.
So, what the expectation is, is that we would see an increase in shopping frequency from our customer, a higher average purchase. But, also, the most
important thing is we went from a one size fits all, treat every customer the same, to treating customers uniquely and rewarding them for their spend, which is what they told us over two years worth of research is what they wanted from us. So
were very excited about it. They are extremely excited about the rewards program and so far the response has been very positive.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Dave Dyer - Chicos FAS, Inc. - CEO
It might be a little bit early to get into too much detail on Soma, but maybe just a couple highlights.
Laurie Van Brunt - Chicos FAS, Inc. - Brand President, Soma Intimates
I think the biggest change is that currently were part of Chicos Passport program. So, the biggest change for us is that we will now have our own
Love Soma Rewards program. Were still working through the details but the goal is to increase brand spend and frequency.
Todd Vogensen - Chicos FAS, Inc. -
SVP Finance
If you think about it, Roxanne, thats going to be the common theme. Weve got such a high amount of customer
participation in all of our loyalty programs. This isnt about necessarily getting our penetration from 90% to 90.5%. Its about getting customers more engaged and getting them to spend more and increase their frequency over time. Thanks a
bunch for the question.
Operator
Neely Tamminga of Piper Jaffray.
Kayla Berg - Piper Jaffray - Analyst
Good morning. This is Kayla Berg on for Neely. Just wondering if you guys could dig in a bit more on your status around omnichannel. Are all the divisions
operating on omnichannel at this point? And if not, where are you in the integration process in terms of buy online/pick up in stores, or fulfilling e-commerce orders directly out of stores to avoid stock-out? Thanks.
Dave Dyer - Chicos FAS, Inc. - CEO
All of our divisions are very engaged in what we would call the omnichannel experience. We understand, because of our loyalty programs, if she looks at a page
search online, or browses online and then shops in store, we understand the relationship between her web search and her ultimate purchase. So, theres a lot of information we certainly understand. And we are, as we said, making it easier and
easier for her to shop.
The first thing that we have is the one that led us with it tech tables in Boston Proper. And as weve said,
in our little Boston Proper stores, about 20% of the business is being done from that tech table. So, I think that that is because, when you look at it, theyre only carrying half the assortment that we have online. So, really, what it
says is it becomes a very important tool to blend online and the store experience.
In the other brands, weve had Locate in for some two, maybe even
four years now, which was very early, to make sure that we could take advantage of our e-commerce assortment and our distribution center and fill from other stores. So, a customer actually can shop and ring up in a store, and when they shop and ring
up their sale, its then shipped either from another store directly to the customer or most likely from our direct-to-consumer distribution center in Winder, Georgia.
While we have the capability to reserve online/pick up in stores, shop online/pick up in store, the problem that we have right now is our systems are all
batch. And on a batch system, where we record sales overnight, it is not always when you promise that somethings going to be there in the store and then they go in and its actually sold before that batch updated in the night, we
wind up with a customer disappoint.
So, right now we have not turned that functionality on. I think it will come down the road, but theres some
other issues that we have to address before were confident that we can turn it on and have the level of customer service that our customers certainly expect.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
With our shared service, we all share the same technology and the same technology
platform. We had a DC upgrade, which some of you guys saw. Was it a year ago, Todd?
Todd Vogensen - Chicos FAS, Inc. -
SVP Finance
It was about a year ago.
Dave Dyer - Chicos FAS, Inc. -
CEO
A year ago. That continues to be very efficient for us. We built our distribution center with a direct-to-consumer capability to darn
near double our business, with very little extra investment. So, we think that we have all the infrastructure and tools in place. And some of it is just making sure that we dont disappoint the customer.
I think the customer service factor of it is our biggest concern as we roll these things out. We want to make sure we dont disappoint.
Operator
Dana Telsey of Telsey Advisory Group.
Dana Telsey - Telsey Advisory Group - Analyst
Hi. Good morning everyone. Can you talk a little bit about marketing and how you think about marketing spend for the balance of the year, and how you see it
being organized and categorized? And then, also, any more details on Canada Canada for White House/Black Market and also timing of the Chicos openings over there. And, just lastly, anything else on the outlet business and what
youre seeing. Thank you.
Dave Dyer - Chicos FAS, Inc. - CEO
Ill turn it over to our Presidents here.
Cinny Murray - Chicos FAS, Inc. -
Brand President, Chicos
Hi, this is Cinny. Ill address a couple of your questions. The marketing spend will be the same in the
back half. Well continue to be aggressive with television, our direct spend. So, we continue to look at how we spend those dollars but Id say the actual dollar amount as a percent of the business will remain pretty much in line.
I think Dave mentioned earlier, were opening three stores in August in Canada Square One, Mapleview and Upper Canada. Were very excited
about getting up there based on White Houses results.
And then you had a third question about outlets. And I think we would represent most
companies as the front-line businesses have become so promotional, defining how we drive business into the outlets is certainly a challenge for all of us, but it continues to be a great profit center for us. Were doing a great job with
assortments that were putting in there. So I have challenges but happy with their performance as results to profits right now.
Donna Noce - Chicos FAS, Inc. -
Brand President, White House/Black Market
Dana, this is Donna. In regard to marketing at White House/Black Market, our marketing spend in
the back half is flat. And our mix will remain similar with a little bit more emphasis on digital marketing, which we feel is very aligned to our consumer and our demographic.
Outlets we are still building our outlet business. Very pleased with the progress the teams have made with our made-for-outlet product, as we are
building that assortment and that penetration in the outlets and reducing our front-line liquidation. And were managing our liquidation of inventory much more effectively in our front-line stores.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
And then Canada, we also are opening an additional store this year. We just opened our
outlet store most recently in Canada. And were also opening in Mapleview along with Chicos.
Dana Telsey - Telsey Advisory Group -
Analyst
Thank you.
Operator
Liz Dunn of Macquarie.
Liz Dunn - Macquarie Research -
Analyst
Hi. Thanks for taking my question. Are there any other things that youre pulling back on this year in light of the
environment, any other spending items that you didnt highlight? And are there any things that youre accelerating in light of the environment to maybe be more aggressive about driving traffic, just as youre reacting to the soft
traffic environment and the promotional environment thats out there? What are the other elements that youre adapting? Thanks.
Dave Dyer - Chicos FAS, Inc. -
CEO
I think in terms of SG&A, we ask ourselves is it nice or is it necessary. And I think that those things that may be nice but
not necessary, we certainly have taken a second look at. And weve been, throughout our whole Company, very conservative in our expenses for this year. And I think that with the sales expectations, if you take out I think Pam said if you
take out the investments that weve made in technology and international and other items like that, it was up what?
Pam Knous - Chicos FAS, Inc. -
CFO
3.
Dave Dyer - Chicos FAS, Inc. -
CEO
3% in SG&A. Which is certainly I guess Id say Id like for it to be flat. But I think managing it to 3%, based on
very aggressive plans going into the year, and being able to pull back and manage the SG&A, I think is great.
One of the things that we have not
done, as you heard our marketing spend is flat. The things that drive sales and the things that touch the customer, were continuing to spend money on. The things that are back of house that we think that we can either delay or cut, those are
where we have taken the serious looks. And I think we took a look at some of the capital.
As you know, when you open up a store in the fourth quarter,
you get full expense and no sales. So, its much better to open them in the first quarter or early in the year versus the last quarter of the year. Certainly in times like this, I think just as we get into fourth quarter we want to have less
distraction and eliminate anything thats really not going to drive sales or profit during the year. So thats why weve delayed some of those projects. Anything else anybody wants to add?
Operator
Lorraine Hutchinson of Bank of America.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Lorraine Hutchinson - BofA Merrill Lynch - Analyst
Thank you. Good morning. Its clearly a very promotional environment out there and I know some of this was driven by weather. But what if this is the new
state of affairs? Will that change your view on the higher average unit cost strategy at White House? And then also at Chicos, are there any contingency plans that would allow you to hold or grow gross margin in this kind of environment?
Donna Noce - Chicos FAS, Inc. - Brand President, White House/Black Market
Lorraine, this is Donna. First of all, I want to be clear that while the first half of the year we are working with a higher average unit cost, we returned to
a much more normalized average unit cost in the back half of the year for third and fourth quarter. And I feel very confident that we are positioned to be responsive and be able to react to the business as we need.
Cinny Murray - Chicos FAS, Inc. - Brand President, Chicos
Lorraine, this is Cinny with Chicos. Its a great question, and certainly a question every retailers facing today because I dont think
any of us see the environment changing quickly. For Chicos specifically, I am focused on bringing AUC down.
Its a very comprehensive program.
I virtually have the entire brand involved in achieving those goals. Were doing a lot more traveling overseas because I anticipate it will be something that we will face for quite a while.
One of the things I think we would all want to say is we will not sacrifice quality. Thats just going to be we need to be more meaningful to the
mills, more meaningful to certain factories. We just had a summit. We had all our international vendors here talking strategically how we reposition ourselves. So, this will be a big focus for us certainly as we move forward.
Dave Dyer - Chicos FAS, Inc. - CEO
I think if you look at the total business, you could say that our conversion is at an all-time high. So, when shes coming into the stores, we are
converting her store visit, her traffic visit, to sales. Our file is at an all-time high. So were attracting new customers to the brand.
Whats happening is shes not spending as much. Our transactions are even slightly ahead when you look at it for a total Company. The entire sales
decrease can be attributed to average unit retail, which basically says that youre in a very promotional environment. So, that is the place that we are concentrating, both in the way we promote and perhaps over time with additional higher
markups where we think that higher markups are warranted.
But, as Cinny said and Donna said, we will not take quality out of the product. I think that
others have chosen to do that. That is not what were going to be doing. We have a quality expectation and certainly on my watch we will continue to ensure that our quality is where it needs to be for our brands. I think that thats the
best long-term strategy.
Lorraine Hutchinson - BofA Merrill Lynch - Analyst
Thank you.
Operator
Richard Jaffe of Stifel.
Richard Jaffe - Stifel Nicolaus -
Analyst
Thanks very much, guys. Two quick questions. One, the online business, are you seeing any difference between the brands online? And
then if you could provide a little bit more color on the average unit cost, the increases, what happened and how thats going to be overcome, or if we should not count on that. Thank you.
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15
MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
Probably we could start with the online and what we see between the brands. I think weve talked about before, Soma is starting off with national TV and
being a product that lends itself to reorder online, has historically had a higher penetration. But online and omnichannel in general, as we look at it, is growing really across the business. We talked earlier about growing our multichannel
customers, growing our online exclusives, and thats something that we really look at across the entire Company.
Dave Dyer - Chicos FAS, Inc. -
CEO
The real focus is on growing the multichannel customers, because, as weve said, the multichannel customer is worth 7 times an
online customer that only shops online, and is worth 2.5 to 3 times a customer that shops only in stores. Our whole focus is to be seamless, is to get customers to shop in both channels. And that really is the holy grail.
We look at them as seamless, as really one big channel and dont really differentiate that much. But we want them to shop everywhere that we can attract
them.
Richard Jaffe - Stifel Nicolaus - Analyst
To word the question better, really, which customers are responding better to your omnichannel initiative?
Dave Dyer - Chicos FAS, Inc. - CEO
Generally, the more loyal a customer, the more that they shop with us in all channels. And I think that thats given because of their spending average. So
wed look at them, its our best customers. And I think that at the end of last year we said that our omnichannel customers were up about 18%, I believe.
Pam Knous - Chicos FAS, Inc. -
CFO
Thats right.
Dave Dyer - Chicos FAS, Inc. -
CEO
At the end of the year. And that is where we are really trying to grow it, is in getting customers to shop both places. I havent
looked at a number as to where we are this year yet, but I know we ended the year up with omnichannel customers, up about 18%.
Todd Vogensen - Chicos FAS, Inc. -
SVP Finance
And you had an AUC question, probably for Donna.
Donna Noce - Chicos FAS, Inc. -
Brand President, White House/Black Market
Yes. Richard, the AUC situation is really an issue of balance. We talked about since last quarter
we made the decision to adjust our assortments to be reflective of more differentiated, unique products. And we lost balance and we cut back too much on our core basics and it created an imbalance in AUC.
As we move forward, that has been adjusted. And I am very confident as we move into third quarter and fourth quarter that we have a very balanced level of
both our volume-driving basics along with maintaining this couture-like assortment which is part of the White House/Black Market success and our core DNA. And as Dave and Cinny both spoke to, it is not an issue of taking quality away, its
really about rebalancing our assortment.
Operator
Brian Tunick of JPMorgan.
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MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Unidentified Participant Analyst
Hi. This is Kate on for Brian. My question is on Soma. Should we be on the lookout for any launches into the back half? And can you just expand on what you see
as the biggest category opportunities for the brand? You spoke to the strong sleepwear response.
And then, secondly, if you could just speak to what
youre seeing in terms of the store productivity ramp and the delta in profitability between the older stores and the new stores. Thanks.
Laurie Van Brunt - Chicos FAS, Inc.
- Brand President, Soma Intimates
Our number one goal is to be a bra destination, so obviously bras are a big part of what we do. We
periodically have launches and we usually back them up with national TV. So thats just what we do. As far as store productivity, our older stores have comparable maybe Ill let Todd do it.
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
Our stores that are greater than five years old we see still growing at a fast pace. When we look at those stores, they have a four-wall contribution that is
right in line with our four-wall contribution Chicos and White House. Going back to the concepts weve talked about quite a bit in the past, it takes a little bit of time for the Soma stores to mature as they gain new customers. And
were seeing that play out in terms of the performance of the stores that have been around for a little bit longer time.
Unidentified Participant Analyst
So, just in terms of when we might be able to see the drag for the brand, the margin lift up relative to the rest of the brand, is that
something that we should still think about being a year-plus out, two years-plus out?
Todd Vogensen - Chicos FAS, Inc. -
SVP Finance
The sellers in percent. So, as were opening new stores, were consistently opening a fair amount of new stores
that are earlier in the maturity curve, and at the same time we have more stores that are getting into that four, five years. The stores that are further on in their maturity curve are dropping dollars to the bottom line very quickly. The stores
that are newer are going to take time to ramp into that. So, as were going through this growth phase, there will be a consistent improvement over time.
Dave Dyer - Chicos FAS, Inc. -
CEO
If we quit opening stores and waited for three years youd see it perform pretty close to Chicos, if not better than
Chicos and White House. Thats the point is when youre opening up the stores that we are, were opening up something like 15% new stores every year. So, you can look at it, and the last two years one-third of our fleet
is basically new, or 25% maybe of our fleet is new. So, that does weigh down the total results of the older stores.
I think that we see that were
opening some stores a little stronger than we have before. I think that the national branding is beginning to pay off. And, honestly, I think that its a good, long-term bet. So, even though it does deleverage us in a lot of ways when you look
at our total corporate numbers in the short term, I think over the long term to build out the Soma fleet is a very good long-term investment. And it does have the ROI that we would want or we wouldnt open the stores.
Unidentified Participant Analyst
Great. Thank you.
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17
MAY 28, 2014 / 12:30PM GMT, CHS - Q1 2014 Chicos FAS, Inc. Sales and Earnings Conference Call
Todd Vogensen - Chicos FAS, Inc. - SVP Finance
All right. Thank you, Kate. And I think that might run us out of time for Q&A. Well probably turn it over to Pam for just a couple of closing
announcements.
Pam Knous - Chicos FAS, Inc. - CFO
That concludes our time for Q&A this morning. I would like to make a couple of announcements. First, Im excited to announce that Todd Vogensen was
promoted to Senior Vice President Finance. Congratulations to Todd on this well-deserved promotion.
Im pleased to announce Dave Slater as our new
Vice President of Investor Relations. Dave has been with Chicos for three and-a-half years, most recently serving as the Brand Finance Executive for the Chicos brand. Dave brings nearly 20 years of retail experience to this role, working
for Walmart and Dollar Tree prior to his arrival at Chicos. Todd will be transitioning his Investor Relations responsibilities to Dave Slater, who is looking forward to working with all of you and will be your main contact going forward.
In addition, I would like to announce that we will be holding our annual Analyst Day event on Tuesday, September 7. Dave Slater will be reaching out to
you with further details. This concludes our call. And thank you for your continued interest in Chicos FAS.
Operator
Ladies and gentlemen, the conference has now concluded. We thank you for attending todays presentation. You may now disconnect your lines.
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