FORT MYERS, Fla., Aug. 30, 2016 /PRNewswire/ -- Chico's FAS, Inc.
(NYSE: CHS) today announced its financial results for the fiscal
2016 second quarter and twenty-six weeks ended July 30,
2016.
For the thirteen weeks ended July 30, 2016 ("the second
quarter"), the Company reported net income of $23.0 million, or $0.17 per diluted share, compared to net income
of $2.1 million, or $0.02 per diluted share, for the thirteen weeks
ended August 1, 2015. The Company reported second quarter 2016
adjusted net income of $33.3 million,
or $0.25 adjusted earnings per
diluted share, compared to adjusted net income of $37.6 million, or $0.26 adjusted earnings per diluted share, in
last year's second quarter. The adjusted results exclude EPS
charges of $0.08 in 2016 related to
restructuring and strategic charges, and $0.24 in 2015 related to Boston Proper non-cash
goodwill and trade name impairment charges, restructuring and
strategic charges and Boston Proper operating results, as presented
in the accompanying GAAP to non-GAAP reconciliation.
For the twenty-six weeks ended July 30, 2016, the Company
reported net income of $54.1 million,
or $0.41 per diluted share, compared
to net income of $34.6 million, or
$0.24 per diluted share, for the
twenty-six weeks ended August 1, 2015. The Company reported
adjusted net income of $66.7 million,
or $0.50 adjusted earnings per
diluted share, compared to adjusted net income of $82.1 million, or $0.57 adjusted earnings per diluted share, in
2015. The adjusted results exclude EPS charges of $0.09 in 2016 related to restructuring and
strategic charges and $0.33 in 2015
related to Boston Proper non-cash goodwill and trade name
impairment charges, restructuring and strategic charges and Boston
Proper operating results, as presented in the accompanying GAAP to
non-GAAP reconciliation.
Shelley Broader, CEO and
President, said, "We are pleased with our second quarter
performance which reflected continued progress in our efforts to
transform our company to win in the future. The initiatives we
announced last quarter are already driving cost savings and
improving our operating efficiency. In addition, we believe that
the organizational redesign announced today will enable us to be
more nimble and responsive to our customers' evolving needs. We
expect that the more streamlined organizational structure combined
with the other cost reduction and operating efficiency initiatives,
will result in a strong, scalable foundation, that is
well-positioned for long-term, profitable growth and value
creation."
Cost Reduction and Operating Efficiency Initiatives
During the second quarter, the Company made progress on the cost
reduction and operating efficiency initiatives announced in
May 2016 to improve its supply chain,
optimize marketing expenses and reduce non-merchandise procurement
expenses.
The organizational redesign announced today clarified roles,
responsibilities and processes across the Company's brands and
shared service center. Though new positions were created in key
areas such as digital and business analytics, the Company reduced
total corporate and field leadership headcount by approximately
200, or 13%, in order to create a flatter organization that should
be more nimble and responsive to customers' evolving needs. In
addition, Cynthia S. Murray, Chico's
Brand President, is leaving the
Company. A search for her replacement is underway.
These organizational changes are expected to result in
approximately $25 million pre-tax
annualized savings. In combination with the previously announced
initiatives, the Company is estimating a reduction in future
annualized costs between $90 million and
$110 million, totaling approximately 4% of 2015 net
sales.
Net Sales
For the second quarter, net sales were $635.7 million compared to $685.8 million in last year's second quarter.
This decrease of 7.3% included $26.3
million related to Boston Proper. When excluding Boston
Proper from fiscal 2015, net sales decreased 3.6%, primarily
reflecting a decline in comparable sales of 3.1% and closed stores.
The 3.1% decrease in comparable sales for the second quarter
followed a 0.5% increase in last year's second quarter, and
reflected reduced transaction count and slightly lower average
dollar sale.
Comparable
Sales
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-six weeks
ended
|
|
|
July 30,
2016
|
|
August 1,
2015
|
|
July 30,
2016
|
|
August 1,
2015
|
Chico's
|
|
(5.1)%
|
|
0.9%
|
|
(5.3)%
|
|
(0.8)%
|
White House Black
Market
|
|
(1.3)%
|
|
(1.9)%
|
|
(2.7)%
|
|
0.0%
|
Soma
|
|
0.7%
|
|
5.1%
|
|
0.6%
|
|
5.7%
|
Total
Company
|
|
(3.1)%
|
|
0.5%
|
|
(3.7)%
|
|
0.2%
|
Gross Margin
For the second quarter, gross margin was $240.8 million, or 37.9%, compared to
$264.7 million, or 38.6%, in last
year's second quarter. When excluding Boston Proper from fiscal
2015, gross margin decreased 80 basis points in fiscal 2016
compared to gross margin of $255.3
million, or 38.7% last year. This decrease in gross margin
rate primarily reflects sales deleverage of occupancy costs
partially offset by a slight increase in merchandise margin
rate.
Selling, General and Administrative Expenses
For the second quarter, selling, general and administrative
expenses ("SG&A") were $186.6
million, or 29.4%, compared to $207.2
million, or 30.2%, in last year's second quarter. When
excluding Boston Proper from fiscal 2015, SG&A decreased
$7.9 million in the second quarter of
fiscal 2016 compared to $194.5
million, or 29.5% last year. The $7.9
million decrease is primarily due to savings in store labor,
stock-based compensation and marketing expenses, and reflects a
slight decline in SG&A rate.
Restructuring and Strategic Charges
For the second quarter, the Company recorded pre-tax
restructuring and strategic charges of $16.6
million, primarily consisting of severance, proxy
solicitation costs, and consulting fees. On an after-tax basis, the
second quarter impact of these charges was $10.3 million, or $0.08 per diluted share.
Income Tax Expense
For the second quarter, the effective tax rate was 38.0%
compared to the 2015 second quarter effective tax rate of (108.1)%.
The 2015 second quarter effective tax rate reflected tax benefits
related to the disposition of Boston Proper. Excluding the 2015 tax
benefits related to the disposition of Boston Proper, the 2015
second quarter effective tax rate was 37.7%.
Inventories
At the end of the second quarter of 2016, inventories totaled
$235.6 million compared to
$239.0 million last year. When
excluding Boston Proper from fiscal 2015, inventories decreased
$1.2 million in the second quarter of
fiscal 2016 compared to $236.8
million last year.
Share Repurchase Program
During the second quarter of fiscal 2016, the Company
repurchased 1.7 million shares for $19.7 million, at an
average of $11.59 per
share, under its $300.0 million
share repurchase program announced in November 2015, with $203.7
million remaining under the program.
Changes in Presentation
Commencing in fiscal 2016, store occupancy expenses and shipping
expenses, historically presented in SG&A, are being presented
in Cost of Goods Sold. The Company believes that the costs
represent direct costs associated with the sale of its merchandise
and these changes better align the Company with its peers and
better reflect how the business operates. Additionally, shipping
revenue, historically presented in SG&A, is being presented in
Net Sales. These adjustments were made retrospectively and all
periods presented conform with this presentation.
Fiscal 2016 Second Half Outlook Update
The fiscal 2016 second half outlook excludes Boston Proper for
comparability purposes. The Company is anticipating a low
single-digit comparable sales decline for the second half. The
Company expects lower sales to result in a decrease in gross margin
rate due to deleverage of store occupancy costs, partially offset
by an increase in merchandise margin rate. This decrease is
expected to be offset by a decline in SG&A as a percent of
sales, resulting from the previously announced cost reduction and
operating efficiency initiatives. Total inventory is expected to be
in line with 2015 levels.
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House Black
Market, and Soma 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 July 30, 2016, the Company operated 1,517 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, and www.soma.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 may contain certain
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which reflect our
current views with respect to certain events that could have an
effect on our future financial performance, including but without
limitation, statements regarding our plans, objectives, and future
success of our store concepts, the implementation of our previously
announced restructuring program and the organizational redesign,
and implementation of our program to increase the sales volume and
profitability of our existing brands through four previously
announced focus areas. These statements may address items such as
future sales, gross margin expectations, SG&A expectations
(particularly estimated expected savings), operating margin
expectations, planned store openings, closings and expansions,
future comparable sales, inventory levels, and future cash needs.
These statements relate to expectations concerning matters that are
not historical fact and may include the words or phrases such as
"expects," "believes," "anticipates," "plans," "estimates,"
"approximately," "our planning assumptions," "future outlook," and
similar expressions. Except for historical information, matters
discussed in such oral and written statements are forward-looking
statements. These forward-looking statements are based largely on
information currently available to our management and on our
current expectations, assumptions, plans, estimates, judgments and
projections about our business and our industry, and are subject to
various risks and uncertainties that could cause actual results to
differ materially from historical results or those currently
anticipated. Although we believe our expectations are based on
reasonable estimates and assumptions, they are not guarantees of
performance and there are a number of known and unknown risks,
uncertainties, contingencies, and other factors (many of which are
outside our control) that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. Accordingly, there is no assurance that our
expectations will, in fact, 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 or contribute to such
differences include, but are not limited to, general economic and
business conditions, conditions in the specialty retail industry,
the availability of quality store sites, the ability to
successfully execute our business strategies, the ability to
achieve the results of our restructuring program, the ability to
achieve the results of our four focus areas, particularly the
results expected from our current strategic projects related to
those focus areas, the integration of our new management team, and
those described in Item 1A, "Risk Factors" and in the
"Forward-Looking Statements" disclosure in Item 7. "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" of our Form 10-K. There can be no assurance that the
actual future results, performance, or achievements expressed or
implied by such forward-looking statements will occur. Investors
using 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. All written or oral
forward-looking statements that are made or attributable to us are
expressly qualified in their entirety by this cautionary notice.
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
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
|
|
Twenty-Six Weeks
Ended
|
|
July 30,
2016
|
|
August 1,
2015
|
|
July 30,
2016
|
|
August 1,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's
|
$
|
334,160
|
|
|
52.6
|
|
|
$
|
355,417
|
|
|
51.8
|
|
|
$
|
682,864
|
|
|
53.4
|
|
|
$
|
725,276
|
|
|
52.4
|
|
White House Black
Market
|
208,038
|
|
|
32.7
|
|
|
213,275
|
|
|
31.1
|
|
|
423,031
|
|
|
33.1
|
|
|
438,717
|
|
|
31.7
|
|
Soma
|
93,534
|
|
|
14.7
|
|
|
90,831
|
|
|
13.2
|
|
|
172,814
|
|
|
13.5
|
|
|
167,998
|
|
|
12.1
|
|
Boston
Proper
|
—
|
|
|
0.0
|
|
|
26,303
|
|
|
3.9
|
|
|
—
|
|
|
0.0
|
|
|
51,601
|
|
|
3.8
|
|
Total net
sales
|
635,732
|
|
|
100.0
|
|
|
685,826
|
|
|
100.0
|
|
|
1,278,709
|
|
|
100.0
|
|
|
1,383,592
|
|
|
100.0
|
|
Cost of goods
sold
|
394,922
|
|
|
62.1
|
|
|
421,125
|
|
|
61.4
|
|
|
775,564
|
|
|
60.7
|
|
|
823,273
|
|
|
59.5
|
|
Gross
margin
|
240,810
|
|
|
37.9
|
|
|
264,701
|
|
|
38.6
|
|
|
503,145
|
|
|
39.3
|
|
|
560,319
|
|
|
40.5
|
|
Selling, general and
administrative
expenses
|
186,626
|
|
|
29.4
|
|
|
207,170
|
|
|
30.2
|
|
|
394,767
|
|
|
30.9
|
|
|
435,235
|
|
|
31.5
|
|
Goodwill and
intangible impairment
charges
|
—
|
|
|
0.0
|
|
|
66,941
|
|
|
9.8
|
|
|
—
|
|
|
0.0
|
|
|
66,941
|
|
|
4.8
|
|
Restructuring and
strategic charges
|
16,556
|
|
|
2.6
|
|
|
16,166
|
|
|
2.3
|
|
|
20,207
|
|
|
1.5
|
|
|
31,041
|
|
|
2.2
|
|
Income (loss) from
operations
|
37,628
|
|
|
5.9
|
|
|
(25,576)
|
|
|
(3.7)
|
|
|
88,171
|
|
|
6.9
|
|
|
27,102
|
|
|
2.0
|
|
Interest expense,
net
|
(489)
|
|
|
(0.1)
|
|
|
(502)
|
|
|
(0.1)
|
|
|
(948)
|
|
|
(0.1)
|
|
|
(955)
|
|
|
(0.1)
|
|
Income (loss)
before income taxes
|
37,139
|
|
|
5.8
|
|
|
(26,078)
|
|
|
(3.8)
|
|
|
87,223
|
|
|
6.8
|
|
|
26,147
|
|
|
1.9
|
|
Income tax provision
(benefit)
|
14,100
|
|
|
2.2
|
|
|
(28,200)
|
|
|
(4.1)
|
|
|
33,100
|
|
|
2.6
|
|
|
(8,500)
|
|
|
(0.6)
|
|
Net
income
|
$
|
23,039
|
|
|
3.6
|
|
|
$
|
2,122
|
|
|
0.3
|
|
|
$
|
54,123
|
|
|
4.2
|
|
|
$
|
34,647
|
|
|
2.5
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share-basic
|
$
|
0.17
|
|
|
|
|
$
|
0.02
|
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
0.24
|
|
|
|
Net income per common
and common
equivalent share–diluted
|
$
|
0.17
|
|
|
|
|
$
|
0.02
|
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
0.24
|
|
|
|
Weighted average
common shares
outstanding–basic
|
129,215
|
|
|
|
|
138,606
|
|
|
|
|
130,406
|
|
|
|
|
140,992
|
|
|
|
Weighted average
common and common
equivalent shares outstanding–diluted
|
129,362
|
|
|
|
|
138,961
|
|
|
|
|
130,516
|
|
|
|
|
141,339
|
|
|
|
Dividends declared
per share
|
$
|
0.0800
|
|
|
|
|
$
|
0.0775
|
|
|
|
|
$
|
0.2400
|
|
|
|
|
$
|
0.2325
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
July 30,
2016
|
|
January 30,
2016
|
|
August 1,
2015
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
100,532
|
|
|
$
|
89,951
|
|
|
$
|
109,015
|
|
Marketable
securities, at fair value
|
50,612
|
|
|
50,194
|
|
|
47,999
|
|
Inventories
|
235,636
|
|
|
233,834
|
|
|
239,043
|
|
Prepaid expenses and
other current assets
|
43,135
|
|
|
45,660
|
|
|
50,190
|
|
Income taxes
receivable
|
3,070
|
|
|
29,157
|
|
|
11,482
|
|
Assets held for
sale
|
18,667
|
|
|
16,525
|
|
|
85,941
|
|
Total Current
Assets
|
451,652
|
|
|
465,321
|
|
|
543,670
|
|
Property and
Equipment, net
|
515,088
|
|
|
550,953
|
|
|
563,583
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
96,774
|
|
|
96,774
|
|
|
96,774
|
|
Other intangible
assets, net
|
38,930
|
|
|
38,930
|
|
|
38,930
|
|
Other assets,
net
|
18,989
|
|
|
14,074
|
|
|
22,829
|
|
Total Other
Assets
|
154,693
|
|
|
149,778
|
|
|
158,533
|
|
|
$
|
1,121,433
|
|
|
$
|
1,166,052
|
|
|
$
|
1,265,786
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
136,761
|
|
|
$
|
129,343
|
|
|
$
|
148,288
|
|
Current
debt
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
Other current and
deferred liabilities
|
151,823
|
|
|
158,788
|
|
|
150,433
|
|
Liabilities held for
sale
|
—
|
|
|
—
|
|
|
7,297
|
|
Total Current
Liabilities
|
298,584
|
|
|
298,131
|
|
|
316,018
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
77,252
|
|
|
82,219
|
|
|
87,186
|
|
Deferred
liabilities
|
126,377
|
|
|
130,743
|
|
|
138,815
|
|
Deferred
taxes
|
9,377
|
|
|
15,171
|
|
|
13,562
|
|
Total Noncurrent
Liabilities
|
213,006
|
|
|
228,133
|
|
|
239,563
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,320
|
|
|
1,355
|
|
|
1,394
|
|
Additional paid-in
capital
|
440,038
|
|
|
435,881
|
|
|
422,387
|
|
Treasury stock, at
cost
|
(346,062)
|
|
|
(289,813)
|
|
|
(249,854)
|
|
Retained
earnings
|
514,495
|
|
|
492,325
|
|
|
535,613
|
|
Accumulated other
comprehensive income
|
52
|
|
|
40
|
|
|
665
|
|
Total
Stockholders' Equity
|
609,843
|
|
|
639,788
|
|
|
710,205
|
|
|
$
|
1,121,433
|
|
|
$
|
1,166,052
|
|
|
$
|
1,265,786
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
|
Twenty-Six Weeks
Ended
|
|
July 30,
2016
|
|
August 1,
2015
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
54,123
|
|
|
$
|
34,647
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges, pre-tax
|
—
|
|
|
66,941
|
|
Depreciation and
amortization
|
55,445
|
|
|
61,672
|
|
Loss on disposal and
impairment of property and equipment
|
3,542
|
|
|
21,603
|
|
Deferred tax
benefit
|
(7,492)
|
|
|
(39,881)
|
|
Stock-based
compensation expense
|
9,623
|
|
|
13,657
|
|
Excess tax benefit
from stock-based compensation
|
(220)
|
|
|
(2,170)
|
|
Deferred rent and
lease credits
|
(9,523)
|
|
|
(9,219)
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(1,802)
|
|
|
(15,165)
|
|
Prepaid expenses and
accounts receivable
|
(3,379)
|
|
|
(8,325)
|
|
Income tax
receivable
|
26,087
|
|
|
(10,887)
|
|
Accounts
payable
|
(3,130)
|
|
|
(3,045)
|
|
Accrued and other
liabilities
|
(1,588)
|
|
|
2,254
|
|
Net cash provided by
operating activities
|
121,686
|
|
|
112,082
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(28,708)
|
|
|
(29,460)
|
|
Proceeds from sale of
marketable securities
|
28,334
|
|
|
107,994
|
|
Purchases of property
and equipment, net
|
(25,231)
|
|
|
(42,836)
|
|
Net cash (used in)
provided by investing activities
|
(25,605)
|
|
|
35,698
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
—
|
|
|
124,000
|
|
Payments on
borrowings
|
(5,000)
|
|
|
(26,500)
|
|
Proceeds from
issuance of common stock
|
1,272
|
|
|
9,087
|
|
Excess tax benefit
from stock-based compensation
|
220
|
|
|
2,170
|
|
Dividends
paid
|
(21,405)
|
|
|
(22,160)
|
|
Repurchase of common
stock
|
(60,560)
|
|
|
(258,834)
|
|
Net cash used in
financing activities
|
(85,473)
|
|
|
(172,237)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(27)
|
|
|
121
|
|
Net increase
(decrease) in cash and cash equivalents
|
10,581
|
|
|
(24,336)
|
|
Cash and Cash
Equivalents, Beginning of period
|
89,951
|
|
|
133,351
|
|
Cash and Cash
Equivalents, End of period
|
$
|
100,532
|
|
|
$
|
109,015
|
|
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 when
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 twenty-six weeks ended July 30, 2016 and August 1,
2015, 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 operations (in
thousands, except per share amounts):
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
|
July 30,
2016
|
|
August 1,
2015
|
|
July 30,
2016
|
|
August 1,
2015
|
|
|
|
|
|
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
23,039
|
|
|
$
|
2,122
|
|
|
$
|
54,123
|
|
|
$
|
34,647
|
|
Net income and
dividends declared allocated to participating
securities
|
|
(506)
|
|
|
(28)
|
|
|
(1,155)
|
|
|
(804)
|
|
Net income available
to common shareholders
|
|
$
|
22,533
|
|
|
$
|
2,094
|
|
|
$
|
52,968
|
|
|
$
|
33,843
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
|
129,215
|
|
|
138,606
|
|
|
130,406
|
|
|
140,992
|
|
Dilutive effect of
non-participating securities
|
|
147
|
|
|
355
|
|
|
110
|
|
|
347
|
|
Weighted average
common and common equivalent shares
outstanding – diluted
|
|
129,362
|
|
|
138,961
|
|
|
130,516
|
|
|
141,339
|
|
|
|
|
|
|
|
|
|
|
Net income per
common share(1)
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
0.24
|
|
Diluted
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
0.24
|
|
(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 diluted share, the
year-to-date calculation of generally accepted accounting
principles ("GAAP") diluted EPS may not equal the sum of the
quarters.
SEC Regulation G - The Company reports its consolidated
financial results in accordance with GAAP. However, to supplement
these consolidated financial results, management believes that
certain non-GAAP results, which exclude certain charges and results
from non-continuing operations, 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 adjusted 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
|
|
Twenty-Six Weeks
Ended
|
|
|
July 30,
2016
|
|
August 1,
2015
|
|
July 30,
2016
|
|
August 1,
2015
|
Net income:
(1)
|
|
|
|
|
|
|
|
|
GAAP
basis
|
|
$
|
23,039
|
|
|
$
|
2,122
|
|
|
$
|
54,123
|
|
|
$
|
34,647
|
|
Goodwill and other
intangible impairment charges
|
|
—
|
|
|
47,127
|
|
|
—
|
|
|
47,127
|
|
Restructuring and
strategic charges
|
|
10,270
|
|
|
10,070
|
|
|
12,538
|
|
|
19,334
|
|
Boston Proper
operating loss
|
|
—
|
|
|
2,013
|
|
|
—
|
|
|
4,737
|
|
Tax benefit related
to the disposition of Boston Proper
|
|
—
|
|
|
(23,779)
|
|
|
—
|
|
|
(23,779)
|
|
Non-GAAP adjusted
basis
|
|
$
|
33,309
|
|
|
$
|
37,553
|
|
|
$
|
66,661
|
|
|
$
|
82,066
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted share: (1) (2)
|
|
|
|
|
|
|
|
|
GAAP
basis
|
|
$
|
0.17
|
|
|
$
|
0.02
|
|
|
$
|
0.41
|
|
|
$
|
0.24
|
|
Goodwill and other
intangible impairment charges
|
|
0.00
|
|
|
0.33
|
|
|
0.00
|
|
|
0.33
|
|
Restructuring and
strategic charges
|
|
0.08
|
|
|
0.07
|
|
|
0.09
|
|
|
0.13
|
|
Boston Proper
operating loss
|
|
0.00
|
|
|
0.01
|
|
|
0.00
|
|
|
0.04
|
|
Tax benefit related
to the disposition of Boston Proper
|
|
0.00
|
|
|
(0.17)
|
|
|
0.00
|
|
|
(0.17)
|
|
Non-GAAP adjusted
basis
|
|
$
|
0.25
|
|
|
$
|
0.26
|
|
|
$
|
0.50
|
|
|
$
|
0.57
|
|
(1) All adjustments to net income are presented net
of tax.
(2) 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 diluted share, the
year-to-date calculation of non-GAAP diluted EPS may not equal the
sum of the quarters.
SEC Regulation G - The Company reports its consolidated
financial results in accordance with GAAP. However, to supplement
these consolidated financial results, management believes that
certain non-GAAP results, which exclude results from non-continuing
operations, may provide a more meaningful measure on which to
compare the Company's results of operations between periods.
The tables below present a reconciliation of selected
consolidated financial data on a GAAP basis to selected
consolidated financial data on a non-GAAP adjusted basis,
reflecting certain adjustments as identified in the footnotes to
the table and excluding Boston Proper:
Chico's FAS, Inc.
and Subsidiaries
|
Fiscal 2015
Reconciliation of Reported to Adjusted Selected Non-GAAP
Consolidated Financial Data
|
(Unaudited)
|
(in
thousands)
|
|
|
|
|
|
|
|
|
As
Reported
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
August 1,
2015
|
|
August 1,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
680,351
|
|
|
100.0
|
|
|
$
|
1,373,690
|
|
|
100.0
|
|
Cost of goods
sold
|
314,383
|
|
|
46.2
|
|
|
611,952
|
|
|
44.5
|
|
Gross
margin
|
365,968
|
|
|
53.8
|
|
|
761,738
|
|
|
55.5
|
|
Selling, general and
administrative expenses
|
308,437
|
|
|
45.3
|
|
|
636,654
|
|
|
46.3
|
|
Subtotal
|
57,531
|
|
|
8.5
|
|
|
125,084
|
|
|
9.2
|
|
|
Boston
Proper
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
August 1,
2015
|
|
August 1,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
24,209
|
|
|
100.0
|
|
|
$
|
47,989
|
|
|
100.0
|
|
Cost of goods
sold
|
13,286
|
|
|
54.9
|
|
|
26,587
|
|
|
55.4
|
|
Gross
margin
|
10,923
|
|
|
45.1
|
|
|
21,402
|
|
|
44.6
|
|
Selling, general and
administrative expenses
|
14,163
|
|
|
58.5
|
|
|
29,029
|
|
|
60.5
|
|
Subtotal
|
(3,240)
|
|
|
(13.4)
|
|
|
(7,627)
|
|
|
(15.9)
|
|
|
Adjustments,
excluding Boston Proper
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
August 1,
2015
|
|
August 1,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales(1)
|
$
|
3,381
|
|
|
0.5
|
|
|
$
|
6,290
|
|
|
0.5
|
|
Store occupancy
expense(2)
|
95,272
|
|
|
13.9
|
|
|
188,558
|
|
|
13.8
|
|
Shipping
expense(3)
|
7,875
|
|
|
1.2
|
|
|
15,794
|
|
|
1.1
|
|
Cost of goods
sold
|
103,147
|
|
|
15.1
|
|
|
204,352
|
|
|
14.9
|
|
Gross
margin
|
(99,766)
|
|
|
(14.6)
|
|
|
(198,062)
|
|
|
(14.4)
|
|
Selling, general and
administrative expenses
|
(99,766)
|
|
|
(14.6)
|
|
|
(198,062)
|
|
|
(14.4)
|
|
Subtotal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
As Adjusted,
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Twenty-Six Weeks
Ended
|
|
August 1,
2015
|
|
August 1,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
659,523
|
|
|
100.0
|
|
|
$
|
1,331,991
|
|
|
100.0
|
|
Cost of goods
sold
|
404,244
|
|
|
61.3
|
|
|
789,717
|
|
|
59.3
|
|
Gross
margin
|
255,279
|
|
|
38.7
|
|
|
542,274
|
|
|
40.7
|
|
Selling, general and
administrative expenses
|
194,508
|
|
|
29.5
|
|
|
409,563
|
|
|
30.7
|
|
Subtotal
|
60,771
|
|
|
9.2
|
|
|
132,711
|
|
|
10.0
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to net sales represent the correction
of an immaterial error in the classification of shipping revenue,
which was previously classified within SG&A.
(2) Adjustments to store occupancy expense represent
the reclassification of store occupancy expenses, which were
previously classified within SG&A.
(3) Adjustments to shipping expense represent a
change in accounting policy to present shipping expenses within
cost of goods sold, which were previously reported within
SG&A.
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
July 30, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
2016
|
|
New Stores
|
|
Closures
|
|
July 30,
2016
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
600
|
|
|
1
|
|
|
(2)
|
|
|
599
|
|
|
|
Chico's
outlets
|
117
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
WHBM frontline
boutiques
|
428
|
|
|
1
|
|
|
(2)
|
|
|
427
|
|
|
|
WHBM
outlets
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
272
|
|
|
3
|
|
|
(1)
|
|
|
274
|
|
|
|
Soma
outlets
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
Total Chico's FAS,
Inc.
|
1,517
|
|
|
5
|
|
|
(5)
|
|
|
1,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30,
2016
|
|
New Stores
|
|
Closures
|
|
Other
changes in
SSF
|
|
July 30,
2016
|
Net selling square
footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,639,696
|
|
|
2,339
|
|
|
(3,488)
|
|
|
(476)
|
|
|
1,638,071
|
|
Chico's
outlets
|
293,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293,646
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WHBM frontline
boutiques
|
990,054
|
|
|
2,230
|
|
|
(3,688)
|
|
|
4,724
|
|
|
993,320
|
|
WHBM
outlets
|
148,457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,457
|
|
WHBM
Canada
|
14,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
514,518
|
|
|
5,450
|
|
|
(1,562)
|
|
|
(412)
|
|
|
517,994
|
|
Soma
outlets
|
35,637
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,637
|
|
Total Chico's FAS,
Inc.
|
3,646,594
|
|
|
10,019
|
|
|
(8,738)
|
|
|
3,836
|
|
|
3,651,711
|
|
As of July 30, 2016 the Company
also sold merchandise through 78 international franchise locations,
comprised of 7 Chico's stand-alone boutiques, 40 Chico's
shop-in-shops, and 31 Soma shop-in-shops.
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Twenty-Six Weeks
Ended July 30, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2016
|
|
New Stores
|
|
Closures
|
|
July 30,
2016
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
604
|
|
|
2
|
|
|
(7)
|
|
|
599
|
|
|
|
Chico's
outlets
|
117
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
WHBM frontline
boutiques
|
429
|
|
|
3
|
|
|
(5)
|
|
|
427
|
|
|
|
WHBM
outlets
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
269
|
|
|
6
|
|
|
(1)
|
|
|
274
|
|
|
|
Soma
outlets
|
18
|
|
|
1
|
|
|
—
|
|
|
19
|
|
|
|
Total Chico's FAS,
Inc.
|
1,518
|
|
|
12
|
|
|
(13)
|
|
|
1,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2016
|
|
New Stores
|
|
Closures
|
|
Other
changes in
SSF
|
|
July 30,
2016
|
Net selling square
footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,652,991
|
|
|
5,112
|
|
|
(19,398)
|
|
|
(634)
|
|
|
1,638,071
|
|
Chico's
outlets
|
293,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293,646
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WHBM frontline
boutiques
|
991,164
|
|
|
6,921
|
|
|
(10,300)
|
|
|
5,535
|
|
|
993,320
|
|
WHBM
outlets
|
148,457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,457
|
|
WHBM
Canada
|
14,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
507,805
|
|
|
11,008
|
|
|
(1,562)
|
|
|
743
|
|
|
517,994
|
|
Soma
outlets
|
33,792
|
|
|
1,845
|
|
|
—
|
|
|
—
|
|
|
35,637
|
|
Total Chico's FAS,
Inc.
|
3,652,441
|
|
|
24,886
|
|
|
(31,260)
|
|
|
5,644
|
|
|
3,651,711
|
|
As of July 30, 2016 the Company
also sold merchandise through 78 international franchise locations,
comprised of 7 Chico's stand-alone boutiques, 40 Chico's
shop-in-shops, and 31 Soma shop-in-shops.
Logo - http://photos.prnewswire.com/prnh/20160209/331560LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/chicos-fas-inc-reports-second-quarter-results-300320407.html
SOURCE Chico's FAS, Inc.