Press release from PR Newswire
Chico's FAS, Inc. Reports a 47% Increase in Second Quarter Earnings Per Share of $0.25 vs. $0.17
Wednesday, August 17, 2011
Chico's FAS, Inc. Reports a 47% Increase in Second Quarter Earnings Per Share of $0.25 vs. $0.1706:55 EDT Wednesday, August 17, 2011-- Net sales increased 18.5% to $551.4 million with comparable sales increasing 12.8%FORT MYERS, Fla., Aug. 17, 2011 /PRNewswire/ -- Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2011 second quarter and six months ended July 30, 2011. (Logo: http://photos.prnewswire.com/prnh/20091112/FL09527LOGO )Net Income and Earnings per Share The Company reported an increase of 47% in earnings per share with net income totaling $43.4 million, or $0.25 per diluted share for the second quarter compared to net income of $30.5 million, or $0.17 per diluted share for the same period last year. For the six months ended July 30, 2011, the Company reported an increase of 38% in earnings per share with net income totaling $89.3 million or $0.51 per diluted share, compared to net income of $65.9 million, or $0.37 per diluted share reported for the same period last year.Net SalesNet sales for the quarter increased 18.5% to $551.4 million from $465.4 million in last year's second quarter. Consolidated comparable sales increased 12.8% for the quarter following a 7.6% increase for the same period last year reflecting our compelling fashion offering and effective merchandising and marketing. The Chico's/Soma Intimates brands' comparable sales increased 11.9% following a 5.5% increase for the same period last year, and the White House | Black Market ("WH|BM") brand's comparable sales increased 14.9% following a 12.5% increase for the same period last year. Gross MarginGross margin for the second quarter of $309.3 million, or 56.1% of net sales, represents a 40 basis point improvement over last year's second quarter driven by increased full-price selling partially offset by successful planned promotional activity.Selling, General and Administrative ExpensesSelling, general and administrative expenses for the second quarter of $240.4 million, or 43.6% of net sales, represents an improvement of 190 basis point over last year's second quarter due to the sales leverage impact on store personnel and occupancy costs, slightly offset by higher performance based compensation. Inventories For the total company, weeks of inventory supply on hand decreased approximately 4% compared to the prior year, reflecting initiatives to drive inventory productivity. While in-store inventories increased approximately $16.5 million over last year, or 8% per selling square foot, this increase is consistent with our mix of new store growth and sales trends. The balance of our inventories increased primarily due to timing of deliveries, planned net new third quarter store openings and our expanding DTC channel. Share Repurchase ProgramDuring the second quarter of 2011, the Company repurchased 4.3 million shares for $61.2 million and has $84.2 million remaining under the original $200 million authorization approved by the Board of Directors in August 2010. ABOUT CHICO'S FAS, INC.The Company is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,221 specialty stores, including stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico. The Chico's brand currently operates 598 boutiques and 78 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.White House | Black Market currently operates 354 boutiques and 25 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whbm.com.Soma Intimates is the Company's developing concept with 150 boutiques and 16 outlet stores today. Soma Intimates also publishes a catalog for its customers and conducts e-commerce at www.soma.com.SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the Company's latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's latest annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.For more detailed information on Chico's FAS, Inc., please go to our corporate website, www.chicosfas.com.Executive Contact:Robert C. AtkinsonVice President-Investor RelationsChico's FAS, Inc.(239) 274-4199(Financial Tables Follow)Chico's FAS, Inc.Consolidated Statements of Income(Unaudited)(in thousands, except per share amounts)Twenty-Six Weeks EndedThirteen Weeks EndedJuly 30, 2011July 31, 2010July 30, 2011July 31, 2010Amount% of Sales Amount % of SalesAmount% of Sales Amount % of SalesNet Sales:Chico's/Soma Intimates$ 749,25868.8$ 656,36069.3$374,32467.9$319,66068.7White House | Black Market339,34931.2290,59930.7177,12532.1145,71131.3 Total net sales1,088,607100.0946,959100.0551,449100.0465,371100.0Cost of goods sold461,61742.4406,17342.9242,12243.9206,16444.3 Gross margin626,99057.6540,78657.1309,32756.1259,20755.7Selling, general and administrative expenses:Store and direct operating expenses 364,97733.5333,50135.2183,46133.3164,85335.4Marketing 51,9714.847,0915.021,0733.818,0113.9National Store Support Center 68,2536.357,7826.135,8226.528,9826.2 Total selling, general and administrative expenses485,20144.6438,37446.3240,35643.6211,84645.5 Income from operations141,78913.0102,41210.868,97112.547,36110.2Interest income, net8200.18440.14200.13940.0 Income before income taxes142,60913.1103,25610.969,39112.647,75510.2Income tax provision53,3004.937,4003.926,0004.717,3003.7 Net income $ 89,3098.2$ 65,8567.0$ 43,3917.9$ 30,4556.5Per share data:Net income per common share-basic$ 0.51$ 0.37$ 0.25$ 0.17Net income per common & common equivalent share?diluted$ 0.51$ 0.37$ 0.25$ 0.17Weighted average common sharesoutstanding?basic173,082177,417171,282177,499Weighted average common & commonequivalent shares outstanding?diluted174,298178,807172,495178,774Dividends declared per share$ 0.15$ 0.12$ 0.05$ 0.04Chico's FAS, Inc.Consolidated Balance Sheets(in thousands)July 30,January 29,July 31,201120112010(Unaudited)(Unaudited)ASSETS Current Assets: Cash and cash equivalents$ 56,109$ 14,695$ 17,559 Marketable securities, at fair value448,211534,019469,829 Receivables5,6193,8457,483 Income tax receivable 11,3036,565657 Inventories190,745159,814146,899 Prepaid expenses31,18426,85127,018 Deferred taxes9,08410,9769,823 Total Current Assets752,255756,765679,268 Property and Equipment: Land and land improvements43,31442,46842,080 Building and building improvements92,86489,32885,628 Equipment, furniture and fixtures463,130428,217406,682 Leasehold improvements 436,432426,141418,585 Total Property and Equipment1,035,740986,154952,975 Less accumulated depreciation and amortization(510,958)(468,777)(425,498) Property and Equipment, Net524,782517,377527,477Other Assets: Goodwill 96,77496,77496,774 Other intangible assets38,93038,93038,930 Deferred taxes-96439,597 Other assets, net5,5325,2114,940 Total Other Assets141,236141,879180,241$ 1,418,273$ 1,416,021$ 1,386,986LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities: Accounts payable$ 132,703$ 106,680$ 101,595 Accrued liabilities91,88594,83793,592 Current portion of deferred liabilities21,15019,76019,681 Total Current Liabilities245,738221,277214,868Noncurrent Liabilities: Deferred liabilities130,196129,837137,437Stockholders' Equity: Preferred stock??? Common stock1,7221,7791,789 Additional paid-in capital293,881282,528276,000 Retained earnings 746,006780,212756,043 Accumulated other comprehensive income 730388849 Total Stockholders' Equity1,042,3391,064,9071,034,681$ 1,418,273$ 1,416,021$ 1,386,986Chico's FAS, Inc.Consolidated Cash Flow Statements(Unaudited)(in thousands)Twenty-Six Weeks EndedJuly 30, 2011July 31,2010CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 89,309$ 65,856 Adjustments to reconcile net income to net cash provided by operating activities ? Depreciation and amortization48,35346,636 Deferred tax expense (benefit) 4,845(3,628) Stock-based compensation expense8,3655,950 Excess tax benefit from stock-based compensation(1,642)(1,011) Deferred rent and lease credits (9,167)(8,037) Loss on disposal of property and equipment1,7561,813 Decrease (increase) in assets ? Receivables, net(1,774)(3,578) Income tax receivable (4,738)(346) Inventories(30,931)(8,382) Prepaid expenses and other(5,904)(2,666) Increase in liabilities ? Accounts payable17,41715,203 Accrued and other deferred liabilities6,6372,110 Total adjustments33,21744,064 Net cash provided by operating activities 122,526109,920CASH FLOWS FROM INVESTING ACTIVITIES: Decrease (increase) in marketable securities86,150(82,884) Purchases of property and equipment, net(56,265)(34,380) Net cash provided by (used in) investing activities29,885(117,264)CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock2,7621,378 Excess tax benefit from stock-based compensation1,6421,011 Dividends paid (17,521)(14,282) Repurchase of common stock(97,880)(247) Net cash used in financing activities (110,997)(12,140) Net increase (decrease) in cash and cash equivalents41,414(19,484)CASH AND CASH EQUIVALENTS, Beginning of period14,69537,043CASH AND CASH EQUIVALENTS, End of period$ 56,109$ 17,559Chico's FAS, Inc.Boutique Count and Square FootageAs of July 30, 2011As of New As of 4/30/2011StoresClosures7/30/2011Store count:Chico's frontline boutiques5954(1)598Chico's outlets716?77WH|BM frontline boutiques3508(2)356WH|BM outlets241?25Soma frontline boutiques13416(2)148Soma outlets105(1)14Total Chico's FAS, Inc.1,18440(6)1,218Remodels/Relos andAs of New change in As of 4/30/2011StoresClosuresSSF7/30/2011Net selling square footage (SSF):Chico's frontline boutiques1,605,75111,464(1,120)3,7771,619,872Chico's outlets185,05613,450??198,506WH|BM frontline boutiques730,62516,596(4,561)3,114745,774WH|BM outlets46,3461,892??48,238Soma frontline boutiques273,34834,112(4,051)(677)302,732Soma outlets18,1549,552(1,971)?25,735Total Chico's FAS, Inc.2,859,28087,066(11,703)6,2142,940,857SOURCE Chico's FAS, Inc.