FORT MYERS, Fla., May 27,
2015 /PRNewswire/ -- Chico's FAS, Inc. (NYSE: CHS) today
announced its financial results for the fiscal 2015 first
quarter.
For the thirteen weeks ended May 2, 2015 ("the first
quarter"), the Company reported adjusted net income of $41.8 million compared to net income of
$39.9 million for the thirteen weeks
ended May 3, 2014, and first quarter 2015 adjusted earnings
per diluted share of $0.28 compared
to earnings per diluted share of $0.26 in last year's first quarter. The first
quarter adjusted results exclude EPS charges of $0.06 in 2015 related to restructuring and
strategic charges (the "Charges"), as presented in the accompanying
GAAP to Non-GAAP Reconciliation. Including the impact of the
Charges, the Company reported first quarter 2015 net income of
$32.5 million, or $0.22 per diluted share.
Net Sales
For the first quarter, net sales were $693.3 million, an increase of 1.7% compared to
$681.6 million in last year's first
quarter, primarily reflecting 56 net new stores for a square
footage increase of 3.3%, partially offset by a 0.1% decrease in
comparable sales. The 0.1% decrease in comparable sales for the
first quarter was following a 2.6% decrease in last year's first
quarter, and reflected approximately flat average dollar sale and
transaction count.
Comparable Sales
|
Thirteen Weeks
Ended
|
|
May 2,
2015
|
|
May 3,
2014
|
Chico's
|
(2.3)
|
%
|
|
(0.9)
|
%
|
White House | Black
Market
|
1.7
|
%
|
|
(8.6)
|
%
|
Soma
|
6.5
|
%
|
|
9.3
|
%
|
Total
Company
|
(0.1)
|
%
|
|
(2.6)
|
%
|
Gross Margin
For the first quarter, gross margin was $395.8 million compared to $382.9 million in last year's first quarter.
Gross margin was 57.1% of net sales, a 90 basis point increase from
last year's first quarter, primarily reflecting a decrease in
promotional activity in response to improved inventory management,
partially offset by the impact of product delayed by port issues in
2015 and the return to accrued incentive compensation at a target
level.
Selling, General and Administrative Expenses
For the first quarter, selling, general and administrative
expenses ("SG&A") were $328.2
million compared to $319.0
million in last year's first quarter. SG&A was 47.4% of
net sales, a 60 basis point increase from last year's first
quarter, primarily reflecting sales deleverage of occupancy
expenses and the return to accrued incentive compensation at a
target level, partially offset by benefits from cost reduction
efforts announced last quarter.
Restructuring and Strategic Charges
For the first quarter, the Company recorded pre-tax
restructuring and strategic charges of $14.9
million primarily related to employee-related costs and
property and equipment impairment charges. On an after-tax basis,
the first quarter restructuring and strategic charges impact was
$9.3 million, or $0.06 per diluted share.
Inventories
At the end of the first quarter of 2015, total inventories per
selling square foot decreased 2.8%, primarily reflecting improved
inventory management and lower average unit cost compared to the
first quarter last year. Total inventories increased by less than
one percent compared to the first quarter of last year.
Credit Facility
At the end of the first quarter of 2015, the Company had
$124 million in borrowings
outstanding under its revolving credit facility dated July 27, 2011 ("Existing Credit Facility"), which
was used to fund a portion of the accelerated stock repurchase
agreements ("ASR Agreements") entered into in the first quarter. On
May 4, 2015, the Company executed a
new $200 million credit agreement,
with a term of five years, of which $124
million was drawn at closing and used to repay all
borrowings outstanding under its Existing Credit Facility.
Accelerated Stock Repurchase Agreements
In March 2015, the Company entered
into ASR Agreements with a group of banks to purchase $250 million in outstanding shares of the
Company's common stock. The repurchase was funded through a
combination of available cash on hand and $124 million in borrowings under our Existing
Credit Facility. The Company received an initial delivery of
approximately 10.7 million common shares, which represents
approximately 75% of the shares expected to be repurchased based on
the share price on the date of the agreement. The specific final
number of shares to be repurchased will be based on the
volume-weighted average share price of the Company's common stock
during the calculation period of the ASR Agreements, which are
scheduled to expire no later than October
2015.
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House | Black
Market, Soma, and Boston Proper, is a leading omni-channel
specialty retailer of women's private branded, sophisticated,
casual-to-dressy clothing, intimates, complementary accessories,
and other non-clothing items.
As of May 2, 2015, the Company operated 1,552 stores in the
US and Canada and sold merchandise
through franchise locations in Mexico. 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:
Jennifer
Powers Adkins
Vice President – Investor Relations
Chico's FAS, Inc.
(239) 346-4199
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
(in thousands, except
per share amounts)
|
|
|
|
Thirteen Weeks
Ended
|
|
May 2,
2015
|
|
May 3,
2014
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
sales:
|
|
|
|
|
|
|
|
Chico's
|
$
|
368,492
|
|
|
53.2
|
%
|
|
$
|
372,288
|
|
|
54.6
|
%
|
White House | Black
Market
|
224,520
|
|
|
32.4
|
%
|
|
217,173
|
|
|
31.9
|
%
|
Soma
|
76,546
|
|
|
11.0
|
%
|
|
67,833
|
|
|
10.0
|
%
|
Boston
Proper
|
23,781
|
|
|
3.4
|
%
|
|
24,311
|
|
|
3.5
|
%
|
Total net
sales
|
693,339
|
|
|
100.0
|
%
|
|
681,605
|
|
|
100.0
|
%
|
Cost of goods
sold
|
297,569
|
|
|
42.9
|
%
|
|
298,714
|
|
|
43.8
|
%
|
Gross
margin
|
395,770
|
|
|
57.1
|
%
|
|
382,891
|
|
|
56.2
|
%
|
Selling, general and
administrative expenses
|
328,217
|
|
|
47.4
|
%
|
|
319,049
|
|
|
46.8
|
%
|
Restructuring and
strategic charges
|
14,875
|
|
|
2.1
|
%
|
|
—
|
|
|
0.0
|
%
|
Income from
operations
|
52,678
|
|
|
7.6
|
%
|
|
63,842
|
|
|
9.4
|
%
|
Interest (expense)
income, net
|
(453)
|
|
|
(0.1)
|
%
|
|
40
|
|
|
0.0
|
%
|
Income before
income taxes
|
52,225
|
|
|
7.5
|
%
|
|
63,882
|
|
|
9.4
|
%
|
Income tax
provision
|
19,700
|
|
|
2.8
|
%
|
|
24,000
|
|
|
3.5
|
%
|
Net
income
|
$
|
32,525
|
|
|
4.7
|
%
|
|
$
|
39,882
|
|
|
5.9
|
%
|
Per share
data:
|
|
|
|
|
|
|
|
Net income per common
share-basic
|
$
|
0.22
|
|
|
|
|
$
|
0.26
|
|
|
|
Net income per common
and common equivalent share–diluted
|
$
|
0.22
|
|
|
|
|
$
|
0.26
|
|
|
|
Weighted average
common shares outstanding–basic
|
143,378
|
|
|
|
|
148,475
|
|
|
|
Weighted average
common and common equivalent shares outstanding–diluted
|
143,771
|
|
|
|
|
149,044
|
|
|
|
Dividends declared
per share
|
$
|
0.155
|
|
|
|
|
$
|
0.150
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
May 2,
2015
|
|
January 31,
2015
|
|
May 3,
2014
|
|
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
97,651
|
|
|
$
|
133,351
|
|
|
$
|
80,529
|
|
Marketable
securities, at fair value
|
48,447
|
|
|
126,561
|
|
|
90,984
|
|
Inventories
|
270,313
|
|
|
235,159
|
|
|
268,917
|
|
Prepaid expenses and
other current assets
|
53,484
|
|
|
51,088
|
|
|
51,801
|
|
Assets held for
sale
|
24,042
|
|
|
16,800
|
|
|
—
|
|
Total Current
Assets
|
493,937
|
|
|
562,959
|
|
|
492,231
|
|
Property and
Equipment, net
|
584,616
|
|
|
606,147
|
|
|
636,614
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
145,627
|
|
|
145,627
|
|
|
171,427
|
|
Other intangible
assets, net
|
108,449
|
|
|
109,538
|
|
|
117,107
|
|
Other assets,
net
|
13,728
|
|
|
14,310
|
|
|
10,210
|
|
Total Other
Assets
|
267,804
|
|
|
269,475
|
|
|
298,744
|
|
|
$
|
1,346,357
|
|
|
$
|
1,438,581
|
|
|
$
|
1,427,589
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
147,323
|
|
|
$
|
144,534
|
|
|
$
|
148,858
|
|
Current
debt
|
34,000
|
|
|
—
|
|
|
—
|
|
Other current and
deferred liabilities
|
171,161
|
|
|
158,396
|
|
|
155,579
|
|
Total Current
Liabilities
|
352,484
|
|
|
302,930
|
|
|
304,437
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
90,000
|
|
|
—
|
|
|
—
|
|
Deferred
liabilities
|
142,185
|
|
|
142,371
|
|
|
143,789
|
|
Deferred
taxes
|
49,273
|
|
|
49,659
|
|
|
49,694
|
|
Total Noncurrent
Liabilities
|
281,458
|
|
|
192,030
|
|
|
193,483
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,434
|
|
|
1,529
|
|
|
1,532
|
|
Additional paid-in
capital
|
353,523
|
|
|
407,275
|
|
|
385,730
|
|
Treasury
stock
|
(187,393)
|
|
|
—
|
|
|
—
|
|
Retained
earnings
|
544,511
|
|
|
534,255
|
|
|
542,332
|
|
Accumulated other
comprehensive income
|
340
|
|
|
562
|
|
|
75
|
|
Total
Stockholders' Equity
|
712,415
|
|
|
943,621
|
|
|
929,669
|
|
|
$
|
1,346,357
|
|
|
$
|
1,438,581
|
|
|
$
|
1,427,589
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
Thirteen Weeks
Ended
|
|
May 2,
2015
|
|
May 3,
2014
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
32,525
|
|
|
$
|
39,882
|
|
Adjustments to
reconcile net income to net cash provided by operating activities
—
|
|
|
|
Depreciation and
amortization
|
30,743
|
|
|
30,083
|
|
Loss on disposal and
impairment of property and equipment
|
6,277
|
|
|
—
|
|
Deferred tax
benefit
|
(425)
|
|
|
(1,164)
|
|
Stock-based
compensation expense
|
7,631
|
|
|
6,474
|
|
Excess tax benefit
from stock-based compensation
|
(2,012)
|
|
|
(925)
|
|
Deferred rent and
lease credits
|
(4,283)
|
|
|
(4,671)
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(35,154)
|
|
|
(30,772)
|
|
Prepaid expenses and
other assets
|
(3,468)
|
|
|
(2,084)
|
|
Accounts
payable
|
(8,979)
|
|
|
6,111
|
|
Accrued and other
liabilities
|
18,884
|
|
|
24,534
|
|
Net cash provided by
operating activities
|
41,739
|
|
|
67,468
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(18,252)
|
|
|
(15,053)
|
|
Proceeds from sale of
marketable securities
|
96,351
|
|
|
40,063
|
|
Purchases of property
and equipment, net
|
(19,839)
|
|
|
(34,506)
|
|
Net cash provided by
(used in) investing activities
|
58,260
|
|
|
(9,496)
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
124,000
|
|
|
—
|
|
Proceeds from
issuance of common stock
|
8,025
|
|
|
2,945
|
|
Excess tax benefit
from stock-based compensation
|
2,012
|
|
|
925
|
|
Dividends
paid
|
(11,076)
|
|
|
(11,439)
|
|
Repurchase of common
stock
|
(258,450)
|
|
|
(6,309)
|
|
Net cash used in
financing activities
|
(135,489)
|
|
|
(13,878)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(210)
|
|
|
(9)
|
|
Net (decrease)
increase in cash and cash equivalents
|
(35,700)
|
|
|
44,085
|
|
Cash and Cash
Equivalents, Beginning of period
|
133,351
|
|
|
36,444
|
|
Cash and Cash
Equivalents, End of period
|
$
|
97,651
|
|
|
$
|
80,529
|
|
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 earnings per common share pursuant
to the "two-class" method. For the Company, participating
securities are composed entirely of unvested restricted stock
awards and performance-based restricted stock units ("PSUs") that
have met their relevant performance criteria.
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
non-participating securities such as stock options and PSUs. For
the thirteen weeks ended May 2, 2015 and May 3, 2014,
potential common shares were excluded from the computation of
diluted EPS to the extent they were antidilutive.
The following unaudited table sets forth the computation of
basic and diluted earnings per share shown on the face of the
accompanying condensed consolidated statements of income (in
thousands, except per share amounts):
|
Thirteen Weeks
Ended
|
|
May 2,
2015
|
|
May 3,
2014
|
|
|
|
|
Numerator
|
|
|
|
Net income
|
$
|
32,525
|
|
|
$
|
39,882
|
|
Net income and
dividends declared allocated to participating securities
|
(786)
|
|
|
(1,055)
|
|
Net income available
to common shareholders
|
$
|
31,739
|
|
|
$
|
38,827
|
|
|
|
|
|
Denominator
|
|
|
|
Weighted average
common shares outstanding – basic
|
143,378
|
|
|
148,475
|
|
Dilutive effect of
non-participating securities
|
393
|
|
|
569
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
143,771
|
|
|
149,044
|
|
|
|
|
|
Net income per
common share:
|
|
|
|
Basic
|
$
|
0.22
|
|
|
$
|
0.26
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.26
|
|
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
results, which exclude certain charges, 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.
and Subsidiaries
|
GAAP to Non-GAAP
Reconciliation of Net Income and Diluted EPS
|
(Unaudited)
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
|
May 2,
2015
|
|
May 3,
2014
|
Net
income:
|
|
|
|
|
GAAP
basis
|
|
$
|
32,525
|
|
|
$
|
39,882
|
|
Impact of
restructuring and strategic charges, net of tax
|
|
9,264
|
|
|
—
|
|
Non-GAAP adjusted
basis
|
|
$
|
41,789
|
|
|
$
|
39,882
|
|
|
|
|
|
|
Net income per
diluted share:
|
|
|
|
|
GAAP
basis
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
Impact of
restructuring and strategic charges, net of tax
|
|
0.06
|
|
|
0.00
|
|
Non-GAAP adjusted
basis
|
|
$
|
0.28
|
|
|
$
|
0.26
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
May 2, 2015
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
2015
|
|
New Stores
|
|
Closures
|
|
May 2,
2015
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
613
|
|
|
3
|
|
|
(4)
|
|
|
612
|
|
|
|
Chico's
outlets
|
118
|
|
|
1
|
|
|
(1)
|
|
|
118
|
|
|
|
Chico's
Canada
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
|
WH|BM frontline
boutiques
|
441
|
|
|
2
|
|
|
(3)
|
|
|
440
|
|
|
|
WH|BM
outlets
|
68
|
|
|
1
|
|
|
—
|
|
|
69
|
|
|
|
WH|BM
Canada
|
5
|
|
|
1
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
263
|
|
|
3
|
|
|
—
|
|
|
266
|
|
|
|
Soma
outlets
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
|
Boston Proper
frontline boutiques
|
19
|
|
|
1
|
|
|
—
|
|
|
20
|
|
|
|
Total Chico's FAS,
Inc.
|
1,547
|
|
|
13
|
|
|
(8)
|
|
|
1,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
2015
|
|
New Stores
|
|
Closures
|
|
Other changes in
SSF
|
|
May
2, 2015
|
Net selling square
footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,674,640
|
|
|
7,807
|
|
|
(9,709)
|
|
|
325
|
|
|
1,673,063
|
|
Chico's
outlets
|
295,600
|
|
|
2,406
|
|
|
(2,406)
|
|
|
—
|
|
|
295,600
|
|
Chico's
Canada
|
7,313
|
|
|
2,382
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WH|BM frontline
boutiques
|
1,010,242
|
|
|
4,837
|
|
|
(6,774)
|
|
|
1,087
|
|
|
1,009,392
|
|
WH|BM
outlets
|
141,900
|
|
|
2,206
|
|
|
—
|
|
|
—
|
|
|
144,106
|
|
WH|BM
Canada
|
12,460
|
|
|
2,431
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
498,642
|
|
|
5,277
|
|
|
—
|
|
|
(1,199)
|
|
|
502,720
|
|
Soma
outlets
|
31,672
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,672
|
|
Boston Proper
frontline boutiques
|
33,035
|
|
|
1,430
|
|
|
—
|
|
|
—
|
|
|
34,465
|
|
Total Chico's FAS,
Inc.
|
3,705,504
|
|
|
28,776
|
|
|
(18,889)
|
|
|
213
|
|
|
3,715,604
|
|
As of May 2, 2015 the Company also sold merchandise through
33 international franchise locations.
Logo -
http://photos.prnewswire.com/prnh/20110920/FL71045LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/chicos-fas-inc-reports-first-quarter-adjusted-earnings-per-share-of-028-300088965.html
SOURCE Chico's FAS, Inc.