FORT
MYERS, Fla., Nov. 22,
2022 /PRNewswire/ --
- Delivered diluted EPS of $0.20; seventh consecutive quarter of
double-digit earnings growth
- Grew year-over-year net sales 14.3% on top of 29.1%
growth in last year's third quarter
- Generated $32 million of
operating income, a 44% increase above last year's third
quarter
- Ended third quarter with $141
million of cash and marketable securities; repaid
$30 million debt
Chico's FAS, Inc. (NYSE: CHS) (the "Company" or "Chico's FAS")
today announced its financial results for the thirteen weeks ended
October 29, 2022 (the "third quarter"). The Company also
provided fiscal 2022 fourth quarter outlook.
Molly Langenstein, Chico's FAS
Chief Executive Officer and President, commented, "Our robust
momentum continued into the back half of the year. We posted
another quarter of outstanding operating income and EPS
performance, resulting from continued strong store and digital
sales growth and solid expense leverage. The power of our portfolio
of three unique brands and execution of our strategic pillars of
being customer led, product obsessed, digital first, and
operationally excellent are driving our performance.
"Apparel was once again the leading performer for the quarter,
with Chico's® posting a 29% comparable sales increase
and White House Black Market® generating a 17%
comparable sales gain. Customers responded to our elevated fashion
and product offerings across our apparel categories. Our
Soma® performance improved compared to the second
quarter, with particular strength in our foundations business. We
continue to make investments in cutting-edge product innovation,
and we are excited to welcome Chris
Munnelly as SVP of Merchandising and Design at Soma to help
guide the evolution and maximize the potential of this dynamic
brand."
Langenstein concluded, "Our strong performance and
quarter-after-quarter momentum demonstrate that our strategy is
working. We are very pleased with the progress toward our long-term
goals and remain confident in our ability to create meaningful
shareholder value."
Business Highlights
The Company's third quarter
highlights include:
- Consistent strong results: Chico's FAS posted
$0.20 net income per diluted share
for the third quarter, driven by strong comparable sales growth and
selling, general and administrative expenses ("SG&A") leverage.
This performance was more than 30% over the thirteen weeks ended
October 30, 2021 ("last year's third
quarter") and the seventh consecutive quarter of year-over-year
double-digit earnings growth.
- Powerful portfolio performance: For the third quarter,
total Chico's FAS net sales grew 14.3% and comparable sales
increased 16.5% versus last year's third quarter, led by the
Company's apparel brands. Chico's and White House Black Market
("WHBM") comparable sales grew 28.8% and 17.0%, respectively, in
the third quarter versus last year's third quarter.
- Solid operating income growth: Third quarter income from
operations was $31.6 million, or 6.1%
of net sales, compared to $22.0
million, or 4.9% of net sales, in last year's third quarter,
driven by strong sales growth and SG&A leverage, partially
offset by higher raw material costs.
- Strong balance sheet: The Company ended the third
quarter with $140.7 million in cash
and marketable securities, after repaying $30.0 million of long-term debt during the
quarter.
- Marketing drove traffic and new customers: Chico's FAS
continued to elevate its marketing, focusing more resources on
digital. Strategic marketing efforts continue to drive more
customers to the Company's brands, with total year-over-year
customer count up high-single digits, spend per customer up over
last year's third quarter and the average age of new customers
continuing to trend younger.
- New loyalty programs exceeding expectations: For the
third quarter, enrollment, customer sentiment, and redemption rates
continue to exceed expectations.
Overview of Financial Results
For the third
quarter, the Company reported net income of $24.6 million, or $0.20 per diluted share, compared to net income
of $18.2 million, or $0.15 per diluted share, for last year's third
quarter. Net income for last year's third quarter included
$3.9 million after-tax in legal
settlement charges as presented in the accompanying GAAP to
non-GAAP reconciliation.
Sales
For the third quarter, net sales were
$518.3 million compared to
$453.6 million in last year's third
quarter. This 14.3% improvement primarily reflects a comparable
sales increase of 16.5%, partially offset by 18 permanent net store
closures since last year's third quarter. The 16.5% comparable
sales improvement was driven by an increase in transaction count,
partially offset by a decrease in average dollar sale.
The following table depicts comparable sales percentages by
Chico's, WHBM and Soma:
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended (1)
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
Compared to Fiscal
2021
|
|
Compared to Fiscal
2020
|
|
Compared to Fiscal
2021
|
Chico's
|
28.8 %
|
|
23.3 %
|
|
36.0 %
|
White House Black
Market
|
17.0
|
|
33.4
|
|
35.6
|
Soma
|
(6.1)
|
|
30.2
|
|
(5.8)
|
Total
Company
|
16.5
|
|
27.9
|
|
24.7
|
|
|
(1)
|
The Company is not
providing comparable sales figures for the thirty-nine weeks ended
October 30, 2021 compared
to the thirty-nine weeks ended October 31, 2020 as we do not
believe it is a meaningful measure due to the significant
impacts of the pandemic during fiscal 2020.
|
Gross Margin
For the third quarter, gross
margin was $207.4 million, or 40.0%
of net sales, compared to $184.4
million, or 40.7% of net sales, in last year's third
quarter. The 70 basis point decrease in gross margin rate primarily
reflects higher raw material costs, partially offset by freight
costs, occupancy leverage and higher average unit retail.
Selling, General and Administrative
Expenses
For the third quarter, SG&A was
$175.8 million, or 33.9% of net
sales, compared to $162.5 million, or
35.8% of net sales, for last year's third quarter, primarily
reflecting ongoing expense management and the impact of
$3.9 million in pre-tax litigation
settlement charges in last year's third quarter.
Income Taxes
For the third quarter, the
effective tax rate was 19.3% compared to 9.9% for last year's third
quarter. The third quarter effective tax rate of 19.3% primarily
reflects a 2021 fiscal provision to return benefit due to the
reversal of a valuation allowance related to 2021 temporary
differences. Last year's third quarter effective tax rate of 9.9%
primarily reflects a 2020 fiscal provision to return benefit due to
the reversal of a valuation allowance related to 2020 temporary
differences and the rate differential provided by the Coronavirus
Aid, Relief, and Economic Security Act.
Cash, Marketable Securities and Debt
At the end
of the third quarter, cash and marketable securities totaled
$140.7 million compared to
$137.5 million at the end of last
year's third quarter. Debt at the end of the third quarter totaled
$69.0 million compared to
$99.0 million at the end of last
year's third quarter, reflecting a principal payment of
$30.0 million in the third
quarter.
Inventories
At the end of the third quarter,
inventories totaled $304.1 million
compared to $277.7 million at the end
of last year's third quarter. The $26.4
million, or 9.5%, increase over last year's third quarter
primarily reflects early holiday receipts, alignment of on-hand
inventories with higher consumer demand, strategic investments in
basics and higher average unit costs.
Fiscal 2022 Fourth Quarter and Full Year
Outlook
For the fiscal 2022 fourth quarter, the Company
currently expects:
- Consolidated net sales of $535
million to $555 million;
- Gross margin rate as a percent of net sales of 35.4% to
35.8%;
- SG&A as a percent of net sales of 32.7% to 33.2%;
- Effective income tax rate of 25.0%; and
- Earnings per diluted share of $0.07 to $0.10.
For the fiscal 2022 full year, the Company currently
expects:
- Consolidated net sales of $2,153
million to $2,173
million;
- Gross margin rate as a percent of net sales of 39.2% to
39.3%;
- SG&A as a percent of net sales of 32.3% to 32.4%;
- Effective income tax rate of 23.0%;
- Earnings per diluted share of $0.89 to $0.92;
and
- Capital and cloud-based expenditures of approximately
$65 million to $70 million.
Conference Call Information
The Company is
hosting a live conference call on Tuesday, November 22, 2022
beginning at 8:00 a.m. ET to review
the operating results for the third quarter. The conference call is
being webcast live over the Internet, which you may access in
the Investors section of the Company's corporate
website, www.chicosfas.com. A replay of the webcast will
remain available online for one year
at http://chicosfas.com/investors/events-and-presentations.
The phone number for the call is
1-877-883-0383. International callers should use
1-412-902-6506. The Elite Entry number, 7130569, is required to
join the conference call. Interested participants should call 10-15
minutes prior to the 8:00 a.m. start
to be placed in queue.
ABOUT CHICO'S FAS, INC.
Chico's FAS is a Florida-based
fashion company founded in 1983 on Sanibel Island, Fla. The Company
reinvented the fashion retail experience by creating fashion
communities anchored by service, which put the customer at the
center of everything we do. As one of the leading fashion retailers
in North America, Chico's FAS is a
company of three unique brands - Chico's, White House Black Market
and Soma - each thriving in their own white space, founded by
women, led by women, providing solutions that millions of women say
give them confidence and joy.
Our Company has a passion for fashion, and each day, we provide
clothing, shoes and accessories, intimate apparel and expert
styling in our brick-and-mortar boutiques, digital online boutiques
and through StyleConnect®, the Company's customized,
branded, digital styling tool that enables customers to
conveniently shop wherever, whenever and however they prefer.
As of October 29, 2022, the Company operated 1,261 stores
in the U.S. and sold merchandise through 58 international franchise
locations in Mexico and 2 domestic
franchise airport locations. The Company's merchandise is also
available at www.chicos.com, www.chicosofftherack.com, www.whbm.com
and www.soma.com.
To learn more about Chico's FAS, please visit our corporate
website at www.chicosfas.com. The information on our corporate
website is not, and shall not be deemed to be, a part of this press
release or incorporated into our federal securities law
filings.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release contains statements concerning our current
expectations, assumptions, plans, estimates, judgments and
projections about our business and our industry and other
statements that are not historical facts. These statements,
including without limitation the quote from Ms. Langenstein and the
sections captioned "Business Highlights" and "Fiscal 2022 Fourth
Quarter and Full Year Outlook," are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. In most cases, words or phrases such as "aim,"
"anticipates," "believes," "could," "estimates," "expects,"
"intends," "target," "may," "will," "plans," "path," "outlook,"
"project," "should," "strategy," "potential," "confident" and
similar expressions identify forward-looking statements. These
forward-looking statements are based largely on information
currently available to our management and are subject to various
risks and uncertainties that could cause actual results to differ
materially from historical results or those expressed or implied by
such forward-looking statements. Although we believe our
expectations are based on reasonable estimates and assumptions,
they are not guarantees of performance. There is no assurance that
our expectations will occur or that our estimates or assumptions
will be correct, and we caution investors and all others not to
place undue reliance on such forward-looking statements. Factors
that could cause actual results to differ include, but are not
limited to, those described in Item 1A, "Risk Factors" in our most
recent Annual Report on Form 10-K and, from time to time, in Item
1A, "Risk Factors" of our Quarterly Reports on Form 10-Q and the
following:
The effects of the pandemic, including uncertainties about its
depth and duration, new variants of COVID-19 that have emerged, the
speed, efficacy and availability of vaccines and treatments, its
impact on general economic conditions, human capital management,
consumer behavior and discretionary spending, the effectiveness of
any actions taken in response to the pandemic, and the impact of
the pandemic on our manufacturing operations, shipping costs and
timelines and the global supply chain; the ability of our
suppliers, logistics providers, vendors and landlords, to meet
their obligations to us in light of financial stress, labor
shortages, liquidity challenges, bankruptcy filings by other
industry participants, and supply chain and other disruptions;
increases in unemployment rates and labor shortages; our ability to
sufficiently staff our retail stores; changes in general economic
conditions, including but not limited to, consumer confidence and
consumer spending patterns;the impacts of rising inflation,
gasoline prices, and interest rates on consumer spending; market
disruptions including pandemics or significant health hazards,
severe weather conditions, natural disasters, terrorist activities,
financial crises, political crises, war and other military
conflicts (such as the war in Ukraine) or other major events, or the
prospect of these events, including their impact on consumer
spending, inflation and the global supply chain; domestic and
global political and social conditions and the potential impacts of
geopolitical turmoil or conflict; shifts in consumer behavior, and
our ability to adapt, identify and respond to new and changing
fashion trends and customer preferences, and to coordinate product
development with buying and planning; changes in the general or
specialty retail or apparel industries, including significant
decreases in market demand and the overall level of spending for
women's private branded clothing and related accessories; our
ability to secure and maintain customer acceptance of in-store and
online concepts and styles; increased competition in the markets in
which we operate, including for, among other things, premium mall
space; our ability to remain competitive with customer shipping
terms and costs; decreases in customer traffic at malls, shopping
centers and our stores; fluctuations in foreign currency exchange
rates and commodity prices; significant increases in the costs of
manufacturing, raw materials, transportation, importing,
distribution, labor and advertising; decreases in the quality of
merchandise received from suppliers and increases in delivery times
for receiving such merchandise; our ability to appropriately manage
our store fleet, including the closing of underperforming stores
and opening of new stores, and our ability to achieve the expected
results of any such store openings or store closings; our ability
to appropriately manage inventory and allocation processes and
leverage targeted promotions; our ability to maintain cost saving
discipline; our ability to operate our retail websites in a
profitable manner; our ability to successfully identify and
implement additional sales and distribution channels; our ability
to successfully execute and achieve the expected results of our
business, brand strategies, brand awareness programs, and
merchandising and marketing programs including, but not limited to,
the Company's three-year strategic growth plan, retail fleet
optimization plan, sales initiatives, multi-channel strategies and
four strategic pillars which are: 1) customer led; 2) product
obsessed; 3) digital first; and 4) operationally excellent; our
ability to utilize our distribution center and other support
facilities in an efficient and effective manner; our reliance on
sourcing from foreign suppliers and significant adverse economic,
labor, political or other shifts (including adverse changes in
tariffs, taxes or other import regulations, particularly with
respect to China, or legislation
prohibiting certain imports from China); U.S. and foreign governmental actions
and policies and changes thereto; the continuing performance,
implementation and integration of our management information
systems; our ability to successfully update our information
systems; the impact of any system failure, cyber security or other
data security breaches, including any security breaches resulting
in the theft, transfer, or unauthorized disclosure of customer,
employee, or company information; our ability to comply with
applicable domestic and foreign information security and privacy
laws, regulations and technology platform rules or other
obligations related to data privacy and security; our ability to
attract, hire, train, motivate and retain qualified employees in an
inclusive environment; our ability to successfully recruit
leadership or transition members of our senior management team;
increased public focus and opinion on environmental, social and
governance ("ESG") initiatives and our ability to meet any
announced ESG goals and initiatives; future unsolicited offers to
buy the Company and actions of activist shareholders and others and
our ability to respond effectively; our ability to secure and
protect our intellectual property rights and to protect our
reputation and brand images; unanticipated obligations or changes
in estimates arising from new or existing litigation, income taxes
and other regulatory proceedings; unanticipated adverse changes in
legal, regulatory or tax laws; and our ability to comply with the
terms of our credit agreement, including the restrictive provisions
limiting our flexibility in operating our business and obtaining
additional credit on commercially reasonable terms.
These factors should be considered in evaluating forward-looking
statements contained herein. All forward-looking statements that
are made or attributable to us are expressly qualified in their
entirety by this cautionary notice. The forward-looking statements
included herein are only made as of the date of this press release.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
(Financial Tables Follow)
Investor Relations Contact:
Tom Filandro
ICR, Inc.
(646) 277-1235
tom.filandro@icrinc.com
Chico's FAS, Inc. • 11215 Metro Parkway •
Fort Myers, Florida 33966 • (239)
277-6200
Chico's FAS, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Income
(Unaudited)
(in thousands,
except per share amounts)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
October 30,
2021
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's
|
$
255,341
|
|
49.3 %
|
|
$
203,505
|
|
44.9 %
|
|
$
801,584
|
|
49.5 %
|
|
$
601,914
|
|
45.8 %
|
White House Black
Market
|
157,451
|
|
30.4
|
|
138,159
|
|
30.4
|
|
485,061
|
|
30.0
|
|
364,250
|
|
27.7
|
Soma
|
105,540
|
|
20.3
|
|
111,980
|
|
24.7
|
|
331,322
|
|
20.5
|
|
347,501
|
|
26.5
|
Total Net
Sales
|
518,332
|
|
100.0
|
|
453,644
|
|
100.0
|
|
1,617,967
|
|
100.0
|
|
1,313,664
|
|
100.0
|
Cost of goods
sold
|
310,892
|
|
60.0
|
|
269,205
|
|
59.3
|
|
962,448
|
|
59.5
|
|
820,973
|
|
62.5
|
Gross
Margin
|
207,440
|
|
40.0
|
|
184,439
|
|
40.7
|
|
655,519
|
|
40.5
|
|
492,691
|
|
37.5
|
Selling, general and
administrative expenses
|
175,841
|
|
33.9
|
|
162,469
|
|
35.8
|
|
520,296
|
|
32.1
|
|
442,637
|
|
33.7
|
Income from
Operations
|
31,599
|
|
6.1
|
|
21,970
|
|
4.9
|
|
135,223
|
|
8.4
|
|
50,054
|
|
3.8
|
Interest expense,
net
|
(1,080)
|
|
(0.2)
|
|
(1,744)
|
|
(0.4)
|
|
(3,111)
|
|
(0.2)
|
|
(5,170)
|
|
(0.4)
|
Income before
Income Taxes
|
30,519
|
|
5.9
|
|
20,226
|
|
4.5
|
|
132,112
|
|
8.2
|
|
44,884
|
|
3.4
|
Income tax
provision
|
5,900
|
|
1.2
|
|
2,000
|
|
0.5
|
|
30,600
|
|
1.9
|
|
9,400
|
|
0.7
|
Net
Income
|
$
24,619
|
|
4.7 %
|
|
$
18,226
|
|
4.0 %
|
|
$
101,512
|
|
6.3 %
|
|
$
35,484
|
|
2.7 %
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share - basic
|
$
0.20
|
|
|
|
$
0.15
|
|
|
|
$
0.84
|
|
|
|
$
0.30
|
|
|
Net income per common
and common
equivalent share – diluted
|
$
0.20
|
|
|
|
$
0.15
|
|
|
|
$
0.82
|
|
|
|
$
0.29
|
|
|
Weighted average common
shares
outstanding – basic
|
120,333
|
|
|
|
117,304
|
|
|
|
119,776
|
|
|
|
117,005
|
|
|
Weighted average common
and
common equivalent shares outstanding
– diluted
|
124,887
|
|
|
|
123,166
|
|
|
|
124,016
|
|
|
|
121,897
|
|
|
Chico's FAS, Inc.
and Subsidiaries
Condensed Consolidated
Balance Sheets
(Unaudited)
(in
thousands)
|
|
|
|
October 29,
2022
|
|
January 29,
2022
|
|
October 30,
2021
|
ASSETS
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
117,726
|
|
$
115,105
|
|
$
134,458
|
Marketable securities,
at fair value
|
|
23,017
|
|
—
|
|
3,006
|
Inventories
|
|
304,127
|
|
323,389
|
|
277,738
|
Prepaid expenses and
other current assets
|
|
47,208
|
|
41,871
|
|
51,841
|
Income taxes
receivable
|
|
15,430
|
|
13,698
|
|
13,125
|
Total Current
Assets
|
|
507,508
|
|
494,063
|
|
480,168
|
Property and
Equipment, net
|
|
183,153
|
|
195,332
|
|
199,853
|
Right of Use
Assets
|
|
432,018
|
|
463,077
|
|
494,808
|
Other
Assets:
|
|
|
|
|
|
|
Goodwill
|
|
16,360
|
|
16,360
|
|
16,360
|
Other intangible
assets, net
|
|
5,000
|
|
5,000
|
|
5,000
|
Other assets,
net
|
|
18,890
|
|
23,005
|
|
25,413
|
Total Other
Assets
|
|
40,250
|
|
44,365
|
|
46,773
|
|
|
$
1,162,929
|
|
$
1,196,837
|
|
$
1,221,602
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
107,400
|
|
$
180,828
|
|
$
172,897
|
Current lease
liabilities
|
|
157,687
|
|
172,506
|
|
177,563
|
Other current and
deferred liabilities
|
|
155,133
|
|
134,051
|
|
140,982
|
Total Current
Liabilities
|
|
420,220
|
|
487,385
|
|
491,442
|
Noncurrent
Liabilities:
|
|
|
|
|
|
|
Long-term
debt
|
|
69,000
|
|
99,000
|
|
99,000
|
Long-term lease
liabilities
|
|
346,560
|
|
381,081
|
|
415,458
|
Other noncurrent and
deferred liabilities
|
|
2,612
|
|
7,867
|
|
8,147
|
Total Noncurrent
Liabilities
|
|
418,172
|
|
487,948
|
|
522,605
|
Commitments and
Contingencies
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
—
|
|
—
|
|
—
|
Common
stock
|
|
1,250
|
|
1,225
|
|
1,225
|
Additional paid-in
capital
|
|
510,374
|
|
508,654
|
|
505,419
|
Treasury stock, at
cost
|
|
(494,395)
|
|
(494,395)
|
|
(494,395)
|
Retained
earnings
|
|
307,536
|
|
206,020
|
|
195,306
|
Accumulated other
comprehensive loss
|
|
(228)
|
|
—
|
|
—
|
Total Shareholders'
Equity
|
|
324,537
|
|
221,504
|
|
207,555
|
|
|
$
1,162,929
|
|
$
1,196,837
|
|
$
1,221,602
|
Chico's FAS, Inc.
and Subsidiaries
Condensed Consolidated
Cash Flow Statements
(Unaudited)
(in
thousands)
|
|
|
Thirty-Nine Weeks
Ended
|
|
October 29,
2022
|
|
October 30,
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
101,512
|
|
$
35,484
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Inventory
write-offs
|
826
|
|
374
|
Depreciation and
amortization
|
33,350
|
|
39,662
|
Non-cash lease
expense
|
137,184
|
|
139,116
|
Loss on disposal and
impairment of property and equipment, net
|
1,804
|
|
1,432
|
Deferred tax
benefit
|
(381)
|
|
190
|
Share-based
compensation expense
|
10,321
|
|
8,836
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
18,436
|
|
(74,129)
|
Prepaid expenses and
other assets
|
(2,591)
|
|
(13,830)
|
Income tax
receivable
|
(1,732)
|
|
45,015
|
Accounts
payable
|
(73,120)
|
|
56,503
|
Accrued and other
liabilities
|
13,583
|
|
16,643
|
Lease
liability
|
(155,561)
|
|
(166,990)
|
Net cash provided by
operating activities
|
83,631
|
|
88,306
|
Cash Flows from
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(26,376)
|
|
(269)
|
Proceeds from sale of
marketable securities
|
3,083
|
|
15,753
|
Purchases of property
and equipment
|
(21,207)
|
|
(8,246)
|
Proceeds from sale of
assets
|
2,772
|
|
—
|
Net cash (used in)
provided by investing activities
|
(41,728)
|
|
7,238
|
Cash Flows from
Financing Activities:
|
|
|
|
Payments on
borrowings
|
(30,000)
|
|
(50,000)
|
Payments of debt
issuance costs
|
(706)
|
|
—
|
Proceeds from issuance
of common stock
|
239
|
|
—
|
Payments of tax
withholdings related to share-based awards
|
(8,815)
|
|
(1,877)
|
Net cash used in
financing activities
|
(39,282)
|
|
(51,877)
|
Net increase in cash
and cash equivalents
|
2,621
|
|
43,667
|
Cash and Cash
Equivalents, Beginning of period
|
115,105
|
|
90,791
|
Cash and Cash
Equivalents, End of period
|
$
117,726
|
|
$
134,458
|
Supplemental Detail on Net Income Per Common
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 income per common share pursuant to the "two-class"
method. For the Company, participating securities are comprised
entirely of unvested restricted stock awards granted prior to
fiscal 2020.
Net income per share is determined using the two-class method
when it is more dilutive than the treasury stock method. Basic net
income per share is computed by dividing net income available to
common shareholders by the weighted-average number of common shares
outstanding during the period, including participating securities.
Diluted net income per share reflects the dilutive effect of
potential common shares from non-participating securities such as
restricted stock awards granted after fiscal 2019, stock options,
PSUs and restricted stock units. For the thirteen and thirty-nine
weeks ended October 29, 2022 and October 30, 2021,
potential common shares were excluded from the computation of
diluted income per common share to the extent they were
antidilutive.
The following unaudited table sets forth the computation of net
income per basic and diluted common share shown on the face of the
accompanying condensed consolidated statements of income (in
thousands, except per share amounts):
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 29,
2022
|
|
October 30,
2021
|
|
October 29,
2022
|
|
October 30,
2021
|
Numerator
|
|
|
|
|
|
|
|
|
Net income
|
|
$
24,619
|
|
$
18,226
|
|
$
101,512
|
|
$
35,484
|
Net income allocated
to participating securities
|
|
(47)
|
|
(123)
|
|
(370)
|
|
(313)
|
Net income available
to common shareholders
|
|
$
24,572
|
|
$
18,103
|
|
$
101,142
|
|
$
35,171
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding –
basic
|
|
120,333
|
|
117,304
|
|
119,776
|
|
117,005
|
Dilutive effect of
non-participating securities
|
|
4,554
|
|
5,862
|
|
4,239
|
|
4,892
|
Weighted average
common and common
equivalent shares outstanding – diluted
|
|
124,887
|
|
123,166
|
|
124,016
|
|
121,897
|
|
|
|
|
|
|
|
|
|
Net income per
common share (1):
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.20
|
|
$
0.15
|
|
$
0.84
|
|
$
0.30
|
Diluted
|
|
$
0.20
|
|
$
0.15
|
|
$
0.82
|
|
$
0.29
|
|
|
(1)
|
Due to the
differences between quarterly and year-to-date weighted average
share counts and the effect of quarterly rounding to the
nearest cent
per share, the year-to-date calculation of net income per basic and
diluted common share may not equal the sum of the
quarters.
|
GAAP to Non-GAAP Reconciliation
The Company reports information in accordance with U.S.
generally accepted accounting principles ("GAAP"). However, this
press release includes non-GAAP financial measures that are not
based on any standardized methodology prescribed by GAAP. Non-GAAP
financial measures should be used supplemental to, and not as an
alternative to, the Company's GAAP financial results, and the
Company's management does not, nor does it suggest that investors
should, consider non-GAAP financial measures in isolation from, or
as a substitute for, financial information prepared in accordance
with GAAP. Further, the non-GAAP measures utilized by the Company
may be unique to the Company, as they may be different from
non-GAAP measures used by other companies. The Company believes
presenting these non-GAAP measures, which exclude items that are
not comparable from period to period, is useful to investors and
others in evaluating the Company's ongoing operating and financial
results in a manner that is consistent with management's evaluation
of business performance and understanding how such results compare
with the Company's historical performance. The reconciliation below
excludes the unfavorable impact of litigation settlement charges in
last year's third quarter.
A reconciliation of net income and income per diluted share on a
GAAP basis to adjusted net income and adjusted net income per
diluted share on a non-GAAP basis, SG&A expenses as a percent
of sales and adjusted SG&A expenses as a percent of sales for
the thirteen and thirty-nine weeks ended October 30, 2021 is presented in the table
below:
GAAP to Non-GAAP
Reconciliation of Adjusted Net Income and Adjusted Net Income Per
Diluted Share and Adjusted Selling,
General and Administrative Expenses, percent of
sales
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
October 30,
2021
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
Net
Income:
|
|
|
|
|
|
|
|
|
|
Net Income GAAP
basis
|
|
$
18,226
|
|
$
35,484
|
Litigation settlement
charges
|
|
3,910
|
|
3,910
|
Adjusted Net Income
(Non-GAAP adjusted basis)
|
|
$
22,136
|
|
$
39,394
|
|
|
|
|
|
Net income per
common and common equivalent share - diluted:
|
|
|
|
|
|
|
|
|
|
Net income per
common and common share equivalent - diluted (GAAP
basis)
|
|
$
0.15
|
|
$
0.29
|
Litigation settlement
charges
|
|
0.03
|
|
0.03
|
Adjusted net income
per common and common equivalent share - diluted
(Non-GAAP adjusted basis)
|
|
$
0.18
|
|
$
0.32
|
|
|
|
|
|
Selling, general and
administrative expenses, percent of sales:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses, percent of sales (GAAP
basis)
|
|
35.8 %
|
|
33.7 %
|
Litigation settlement
charges
|
|
(0.8)
|
|
(0.3)
|
Adjusted selling,
general and administrative expenses percent of sales
(Non-GAAP adjusted basis)
|
|
35.0 %
|
|
33.4 %
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and Square
Footage
|
Thirteen Weeks Ended
October 29, 2022
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
July 30,
2022
|
|
New
Stores
|
|
Closures
|
|
October 29,
2022
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
494
|
|
—
|
|
(3)
|
|
491
|
|
|
Chico's
outlets
|
122
|
|
—
|
|
—
|
|
122
|
|
|
WHBM frontline
boutiques
|
331
|
|
—
|
|
(2)
|
|
329
|
|
|
WHBM outlets
|
53
|
|
—
|
|
—
|
|
53
|
|
|
Soma frontline
boutiques
|
240
|
|
8
|
|
(2)
|
|
246
|
|
|
Soma outlets
|
18
|
|
2
|
|
—
|
|
20
|
|
|
Total Chico's FAS,
Inc.
|
1,258
|
|
10
|
|
(7)
|
|
1,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 30,
2022
|
|
New
Stores
|
|
Closures
|
|
Other Changes in
SSF
|
|
October 29,
2022
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,346,317
|
|
—
|
|
(7,189)
|
|
161
|
|
1,339,289
|
Chico's
outlets
|
307,393
|
|
—
|
|
—
|
|
—
|
|
307,393
|
WHBM frontline
boutiques
|
777,716
|
|
—
|
|
(4,800)
|
|
—
|
|
772,916
|
WHBM outlets
|
110,394
|
|
—
|
|
—
|
|
—
|
|
110,394
|
Soma frontline
boutiques
|
451,144
|
|
12,688
|
|
(3,943)
|
|
(586)
|
|
459,303
|
Soma outlets
|
34,329
|
|
3,121
|
|
—
|
|
(84)
|
|
37,366
|
Total Chico's FAS,
Inc.
|
3,027,293
|
|
15,809
|
|
(15,932)
|
|
(509)
|
|
3,026,661
|
|
As of October 29,
2022, the Company's franchise operations consisted of 58
international retail locations in Mexico and 2 domestic airport
locations.
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and Square
Footage
|
Thirty-Nine Weeks Ended
October 29, 2022
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
January 29,
2022
|
|
New
Stores
|
|
Closures
|
|
October 29,
2022
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
499
|
|
—
|
|
(8)
|
|
491
|
|
|
Chico's
outlets
|
122
|
|
—
|
|
—
|
|
122
|
|
|
WHBM frontline
boutiques
|
335
|
|
—
|
|
(6)
|
|
329
|
|
|
WHBM outlets
|
54
|
|
—
|
|
(1)
|
|
53
|
|
|
Soma frontline
boutiques
|
238
|
|
11
|
|
(3)
|
|
246
|
|
|
Soma outlets
|
18
|
|
2
|
|
—
|
|
20
|
|
|
Total Chico's FAS,
Inc.
|
1,266
|
|
13
|
|
(18)
|
|
1,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 29,
2022
|
|
New
Stores
|
|
Closures
|
|
Other Changes in
SSF
|
|
October 29,
2022
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,362,276
|
|
—
|
|
(21,769)
|
|
(1,218)
|
|
1,339,289
|
Chico's
outlets
|
307,393
|
|
—
|
|
—
|
|
—
|
|
307,393
|
WHBM frontline
boutiques
|
785,722
|
|
—
|
|
(13,129)
|
|
323
|
|
772,916
|
WHBM outlets
|
112,724
|
|
—
|
|
(2,330)
|
|
—
|
|
110,394
|
Soma frontline
boutiques
|
448,773
|
|
16,098
|
|
(4,982)
|
|
(586)
|
|
459,303
|
Soma outlets
|
34,329
|
|
3,121
|
|
—
|
|
(84)
|
|
37,366
|
Total Chico's FAS,
Inc.
|
3,051,217
|
|
19,219
|
|
(42,210)
|
|
(1,565)
|
|
3,026,661
|
|
As of October 29,
2022, the Company's franchise operations consisted of 58
international retail locations in Mexico and 2 domestic airport
locations.
|
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SOURCE Chico's FAS, Inc.