Press release from PR Newswire
Chico's FAS, Inc. Reports First Quarter Earnings Per Share Up 23% To A Record $0.32
Wednesday, May 16, 2012
Chico's FAS, Inc. Reports First Quarter Earnings Per Share Up 23% To A Record $0.3207:15 EDT Wednesday, May 16, 2012-- 13th consecutive quarter of double digit EPS growth -- 9.6% comparable sales increase - 12th consecutive positive quarter -- Record net sales of $651 millionFORT MYERS, Fla., May 16, 2012 /PRNewswire/ -- Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2012 first quarter ended April 28, 2012. (Logo: http://photos.prnewswire.com/prnh/20110920/FL71045LOGO )Net Income and Earnings per Share For the first quarter, net income was $53.6 million, or $0.32 per diluted share, compared to net income of $45.9 million, or $0.26 per diluted share for last year's first quarter, reflecting an earnings per share increase of 23%.Net Sales For the first quarter, net sales were $650.8 million, an increase of 21.2% compared to $537.2 million in last year's first quarter. The increase reflects a consolidated comparable sales increase of 9.6%, an 8.0% increase in square footage and $33.7 million in sales for Boston Proper. The consolidated comparable sales increase of 9.6% for the first quarter was on top of a 7.7% increase for last year's first quarter, and reflects increases in both average dollar sale and transaction count. The Chico's/Soma Intimates brands' comparable sales increased 8.8% on top of a 7.8% increase in last year's first quarter and the White House | Black Market ("WH|BM") brand's comparable sales increased 11.3% on top of a 7.4% increase in last year's first quarter.Gross MarginFor the first quarter, gross margin was $378.6 million, an increase of 19.2% compared to $317.7 million in last year's first quarter. As a percentage of net sales, gross margin was 58.2%, a 90 basis point decrease from last year's first quarter, reflecting the cycling of 2011's four-year record gross margin rate, a more promotional environment, and the inclusion of Boston Proper's results.Selling, General and Administrative Expenses For the first quarter, selling, general and administrative expenses ("SG&A") were $291.7 million, an increase of 19.1% compared to $244.8 million in last year's first quarter. As a percentage of net sales, SG&A was 44.8%, a 70 basis point improvement from last year's first quarter, reflecting leverage on store expenses from our comparable sales increase and the inclusion of Boston Proper's results, partially offset by higher marketing expenses and increased performance-based incentive compensation. Tax RateFor the first quarter, the effective tax rate was 38.0% compared to 37.3% in last year's first quarter. The effective tax rate for last year reflected favorable state tax settlements.Inventories At the end of the first quarter, total inventories were $213.7 million compared to $198.5 million for the first quarter last year. Inventories in the current year include $13.6 million of inventory related to Boston Proper. OutlookFor fiscal 2012, including Boston Proper, the Company's planning assumptions are as follows:Net sales increase at a mid to high teens percentage rate to approximately $2.5 to 2.6 billion, which includes comparable sales growth at a mid single digit rate, approximately 9% growth in store square footage and approximately $30 million in sales from the 53rd week; Gross margin rate down approximately 50 basis points; SG&A expense, as a percentage of net sales, down approximately 50 basis points; Effective tax rate approximately 38%; Inventories in-line with sales growth; and Capital expenditures approximately $150 million, which include 120 to 130 gross new stores.A conference call to review the first quarter is scheduled for today at 8:30 a.m. EDT. A live webcast of the call will be available at the Events Calendar page of the Chico's FAS, Inc. corporate website, www.chicosfas.com.ABOUT CHICO'S FAS, INC.The Company, through its brands ? Chico's, White House | Black Market, Soma Intimates, and Boston Proper, is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items. The Chico's brand offers women a combination of great style, one-of-a-kind details and warm personal service. Chico's currently operates 606 boutiques and 86 outlets throughout the U.S., publishes a monthly catalog and offers round-the-clock shopping at www.chicos.com. White House | Black Market strives to make women feel beautiful with apparel and accessories in the honest simplicity of black and white and the individuality of styles built from it. White House | Black Market currently operates 376 boutiques and 31 outlets, publishes a catalog highlighting its latest fashions and connects with customers at www.whbm.com. Soma Intimates offers beautiful and sensual lingerie, loungewear and beauty. Soma Intimates currently operates 180 boutiques and 15 outlets, publishes a catalog coinciding with key shopping periods and sells direct-to-consumer at www.soma.com. Boston Proper is a leading direct-to-consumer retailer of women's high-end apparel and accessories. Boston Proper provides unique, distinctive fashion designed for today's independent, confident and active woman. The merchandise focus is about creating a daring, modern style with a sensual feel and is available exclusively through the Boston Proper catalog and website, www.bostonproper.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.(Financial Tables Follow) Chico's FAS, Inc.Consolidated Statements of Income(Unaudited) (in thousands, except per share amounts)Thirteen Weeks EndedApril 28, 2012April 30, 2011Amount% of Sales Amount % of SalesNet Sales:Chico's/Soma Intimates$ 425,34265.3$ 374,93469.8White House | Black Market191,72729.5162,22430.2Boston Proper33,7485.2?? Net sales650,817100.0537,158100.0Cost of goods sold272,22141.8219,49540.9 Gross margin378,59658.2317,66359.1Selling, general and administrative expenses:Selling, general and administrative expenses291,67644.8244,84545.5Acquisition and integration costs5580.1?? Total selling, general and administrative expenses292,23444.9244,84545.5 Income from operations86,36213.372,81813.6Interest income, net1830.04000.0 Income before income taxes86,54513.373,21813.6Income tax provision32,9005.127,3005.1 Net income$ 53,6458.2$ 45,9188.5 Per share data:Net income per common share?basic $ 0.32$ 0.26Net income per common and common equivalent share?diluted $ 0.32$ 0.26Weighted average common shares outstanding?basic 163,974174,881Weighted average common and common equivalent shares outstanding?diluted164,876176,112Dividends declared per share$ 0.105$ 0.10 Chico's FAS, Inc.Consolidated Balance Sheets(in thousands)April 28,January 28,April 30,201220122011(Unaudited)(Unaudited)ASSETS Current Assets: Cash and cash equivalents$ 147,077$ 58,919$ 123,409 Marketable securities, at fair value193,446188,934442,815 Inventories213,676194,469198,544 Prepaid expenses and other current assets50,97355,10445,150 Total Current Assets605,172497,426809,918 Property and Equipment, Net564,904550,230507,963Other Assets: Goodwill 238,693238,69396,774 Other intangible assets131,022132,11238,930 Other assets, net6,8216,6917,133 Total Other Assets376,536377,496142,837$ 1,546,612$ 1,425,152$ 1,460,718LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities: Accounts payable$ 147,925$ 100,395$ 129,894 Other current liabilities164,746137,714140,692 Total Current Liabilities312,671238,109270,586Noncurrent Liabilities: Deferred liabilities128,054125,690127,769 Deferred taxes49,52852,125? Total Noncurrent Liabilities177,582177,815127,769Stockholders' Equity: Preferred stock??? Common stock1,6771,6571,762 Additional paid-in capital313,756302,612287,853 Retained earnings 740,720704,631772,215 Accumulated other comprehensive income 206328533 Total Stockholders' Equity1,056,3591,009,2281,062,363$ 1,546,612$ 1,425,152$ 1,460,718 Chico's FAS, Inc.Consolidated Cash Flow Statements(Unaudited)(in thousands)Thirteen Weeks EndedApril 28,2012April 30,2011CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 53,645$ 45,918 Adjustments to reconcile net income to net cash provided by operating activities ? Depreciation and amortization26,09224,188 Deferred tax benefit (2,014)(1,375) Stock-based compensation expense5,3183,636 Excess tax benefit from stock-based compensation(3,136)(762) Deferred rent and lease credits (4,027)(4,330) Loss on disposal and impairment of property and equipment1,2851,434 (Increase) decrease in assets ? Inventories(19,206)(38,730) Prepaid expenses and other assets3,2843,459 Increase in liabilities ? Accounts payable38,72614,404 Accrued and other deferred liabilities36,84529,119 Total adjustments83,16731,043 Net cash provided by operating activities 136,81276,961 CASH FLOWS FROM INVESTING ACTIVITIES: (Increase) decrease in marketable securities(4,633)91,349 Purchases of property and equipment(40,942)(16,208) Net cash (used in) provided by investing activities(45,575)75,141 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock5,8151,373 Excess tax benefit from stock-based compensation3,136762 Dividends paid (8,753)(8,835) Repurchase of common stock(3,277)(36,688) Net cash used in financing activities (3,079)(43,388) Net increase in cash and cash equivalents88,158108,714CASH AND CASH EQUIVALENTS, Beginning of period58,91914,695CASH AND CASH EQUIVALENTS, End of period$ 147,077$ 123,409Supplemental Detail on Earnings Per Share CalculationIn accordance with accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of basic earnings per common share pursuant to the "two-class" method. For the Company, participating securities are comprised of unvested restricted stock awards. Earnings per share is determined using the two-class method, as it is more dilutive than the treasury stock method. Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of potential common shares from securities such as stock options and performance-based restricted stock units.The following table sets forth the computation of basic and diluted earnings per share shown on the face of the accompanying consolidated statements of income (in thousands, except per share amounts): Thirteen Weeks Ended April 28,2012 April 30,2011Net income $ 53,645$ 45,918Net income and dividends declared allocated to unvested restricted stock (933)(537)Net income available to common shareholders $ 52,712$ 45,381 Weighted average common shares outstanding ? basic 163,974174,881 Weighted average common and common equivalent shares outstanding ? diluted 164,876 176,112Net income per common share: Basic$ 0.32$ 0.26 Diluted $ 0.32$ 0.26 Chico's FAS, Inc.Boutique Count and Square FootageAs of April 28, 2012As of New As of 1/28/2012StoresClosures4/28/2012Store count:Chico's frontline boutiques6013(1)603Chico's outlets833?86WH|BM frontline boutiques3649(1)372WH|BM outlets273?30Soma frontline boutiques16415(2)177Soma outlets17?(2)15Total Chico's FAS, Inc.1,25633(6)1,283Remodels/Relos andAs of New change in As of 1/28/2012StoresClosuresSSF4/28/2012Net selling square footage (SSF):Chico's frontline boutiques1,631,6747,703(2,725)8871,637,539Chico's outlets213,4757,189??220,664WH|BM frontline boutiques768,44223,578(2,507)4,150793,663WH|BM outlets53,2636,512??59,775Soma frontline boutiques326,85828,773(3,809)(5,466)346,356Soma outlets32,676?(3,669)5029,057Total Chico's FAS, Inc.3,026,38873,755(12,710)(379)3,087,054 Executive Contact: Todd VogensenVice President-Investor RelationsChico's FAS, Inc.(239) 346-4199SOURCE Chico's FAS, Inc.