FORT MYERS, Fla., Nov. 24,
2020 /PRNewswire/ --
- Sales grew 14.8% and gross margin expanded 740 basis
points from second quarter
- Soma's 67% digital sales increase led Company's
year-over-year double-digit digital sales growth for the
quarter
- Significantly enhanced financial liquidity and
flexibility with amended and extended $300
million credit facility; ended quarter with $145.2 million in cash and cash
equivalents
- Achieved $65.0 million in
rent abatement and reduction commitments as part of comprehensive
lease portfolio review
Chico's FAS, Inc. (NYSE: CHS) (the "Company" or "Chico's FAS")
today announced its financial results for the fiscal 2020 third
quarter ended October 31, 2020 (the "third quarter").
Molly Langenstein, Chief
Executive Officer and President, Chico's FAS said: "Eighteen months
ago, we prioritized digital as the primary growth engine for all
three of our brands, making major strategic shifts and investments
to pivot us to a digital-first company. In March of this year, as
our business became 100% digital overnight, we accelerated that
transformation through innovation and state-of-the art technology
enhancements. Even with our stores now reopened, we continue to
generate year-over-year double-digit digital sales increases. As a
digital-first company, we believe we are competitively positioned
to accelerate growth and gain market share in 2021 and
beyond."
"We are pleased that we achieved another quarter of sequential
performance improvement, with total sales increasing by 14.8%,
driven by strong digital performance and a rebound in store sales,
and gross margin rate rising more than 700 basis points,"
Langenstein added.
Langenstein also noted, "During the third quarter, we
significantly enhanced our financial liquidity and flexibility with
the $300 million credit facility and
commitments for $65 million in rent
abatements and reductions. We are also on track to realize SG&A
expense savings of 23% compared to our original plan for the year.
All of these actions have created a solid financial foundation for
Chico's FAS that we believe has positioned us to emerge a stronger
company. I remain optimistic about the future of Chico's FAS."
Business Highlights
Recent highlights include:
- Chico's FAS continued its evolution to a digital-first company,
fast tracking several investments in innovative digital technology,
leading to higher customer engagement and improved sales.
- For the third quarter, total sales improved 14.8% from the
thirteen weeks ended August 1, 2020
(the "second quarter"), driven by robust digital performance and
rebounding store revenues.
- Third quarter digital sales grew by double digits for the
second quarter in a row. Year-over-year digital sales grew in all
three brands, and Soma led the way with 67% growth compared to the
thirteen weeks ended November 2, 2019
("last year's third quarter").
- Soma achieved a 10.5% total comparable sales growth for the
third quarter compared to last year's third quarter.
- Total third quarter gross margin rate was up 740 basis points
compared to the second quarter, reflecting a higher percentage of
full-price selling on leaner inventory, reduced inventory
write-offs and leverage of fixed occupancy costs.
- In October, the Company meaningfully enhanced its liquidity and
financial flexibility by amending and extending its credit facility
for $300.0 million, which matures in
October 2025. The Company's balance
sheet remains strong with $145.2
million in cash and cash equivalents at quarter end.
- The Company achieved commitments of $65.0 million to date in rent abatements and
reductions resulting from its comprehensive real estate and lease
portfolio review. On a cash basis, management expects approximately
$44.0 million of this amount will be
realized in fiscal 2020, with the balance realized primarily in
fiscal 2021. For income statement purposes, these rent abatements
and reductions will be recognized pro rata over the remaining lease
terms.
- The Company continued the process of streamlining and refining
its organizational structure, materially reducing its expense base
to appropriately support its business needs. Excluding rent,
management has identified approximately $235.0 million, or 23%, in annual expense savings
compared to the original fiscal 2020 plan. The Company expects
certain of these cost savings initiatives will benefit future years
and reflect a cultural shift in how the business is managed.
Overview of Financial Results
For the thirteen weeks ended October 31, 2020 (the "third
quarter"), the Company reported a net loss of $55.9 million, or $0.48 loss per diluted share. The third quarter
net loss includes the after-tax impact of impairment charges of
$6.3 million, or $0.06 per share. For last year's third quarter,
the net loss was $8.1 million, or
$0.07 loss per diluted share. Last
year's third quarter net loss includes after-tax accelerated
depreciation charges of $1.5 million,
or $0.01 per share and the after-tax
impact of severance and other related net charges (collectively,
"Severance Charges") of $2.1 million,
or $0.02 per share.
For the thirty-nine weeks ended October 31, 2020, the
Company reported a net loss of $281.0
million, or $2.43 loss per
diluted share, compared to a net loss of $8.4 million, or $0.07 loss per diluted share, for the thirty-nine
weeks ended November 2, 2019. The net loss for the thirty-nine
weeks ended October 31, 2020 includes the after-tax impact of
goodwill impairment charges of $72.9
million, or $0.63 per share;
impairments on other indefinite-lived intangible assets of
$24.6 million, or $0.21 per share; inventory write-offs of
$34.1 million, or $0.29 per share; long-lived store asset
impairments of $13.9 million, or
$0.12 per share; impairment on right
of use assets of $1.8 million, or
$0.02 per share; and impairment on
other long-lived assets of $6.3
million, or $0.06 per share.
These charges represent $197.9
million of the pre-tax net loss and $153.7 million of the after-tax loss, or
$1.33 per share, for the thirty-nine
weeks ended October 31, 2020. The net loss for the thirty-nine
weeks ended November 2, 2019 includes after-tax accelerated
depreciation charges of $7.2 million,
or $0.06 per share, and Severance
Charges of $2.1 million, or
$0.02 per share.
Results for the thirteen and thirty-nine weeks ended
October 31, 2020 include after-tax charges related to the
impact of the COVID-19 pandemic (the "pandemic") totaling
$6.3 million, or $0.06 per share, and $153.7 million, or $1.33 per share, respectively, as detailed in the
tables below.
Summary of
Significant Charges (1)
|
|
|
|
Thirteen Weeks
Ended
|
|
October 31,
2020
|
|
Amount,
pre-tax
|
|
% of Net
Sales
|
|
Amount,
after-tax
|
|
Per share
impact
|
|
(dollars in
thousands, except per share amounts)
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
|
|
Other long-lived asset
impairment (2)
|
$
|
8,383
|
|
|
2.4
|
%
|
|
$
|
6,303
|
|
|
$
|
0.06
|
|
Total charges
impacting selling, general
and administrative expenses
|
$
|
8,383
|
|
|
2.4
|
%
|
|
$
|
6,303
|
|
|
$
|
0.06
|
|
|
|
(1)
|
Includes only
significant charges related to the pandemic. Less significant
charges that may have been incurred are not reflected in the table
above.
|
(2)
|
Includes
impairment on capitalized implementation costs related to our cloud
computing arrangements and other technology-related
assets.
|
Summary of
Significant Charges (1)
|
|
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2020
|
|
Amount, pre-tax
(2)
|
|
% of Net
Sales
|
|
Amount,
after-tax
|
|
Per share
impact
|
|
(dollars in
thousands, except per share amounts)
|
Gross
margin:
|
|
|
|
|
|
|
|
Inventory
write-offs
|
$
|
55,357
|
|
|
5.9
|
%
|
|
$
|
34,107
|
|
|
$
|
0.29
|
|
Long-lived store asset
impairment (2)
|
18,493
|
|
|
2.0
|
|
|
13,905
|
|
|
0.12
|
|
Right of use asset
impairment
|
2,442
|
|
|
0.3
|
|
|
1,836
|
|
|
0.02
|
|
Total significant
charges impacting gross margin
|
76,292
|
|
|
8.2
|
|
|
49,848
|
|
|
0.43
|
|
Selling, general and
administrative expenses:
|
|
|
|
|
|
|
|
Other long-lived asset
impairment (3)
|
8,383
|
|
|
0.9
|
|
|
6,303
|
|
|
0.06
|
|
Total charges
impacting selling, general
and administrative expenses
|
8,383
|
|
|
0.9
|
|
|
6,303
|
|
|
0.06
|
|
Goodwill and
intangible impairment:
|
|
|
|
|
|
|
|
Goodwill
impairment
|
80,414
|
|
|
8.6
|
|
|
72,900
|
|
|
0.63
|
|
Indefinite-lived asset
impairment
|
32,766
|
|
|
3.5
|
|
|
24,637
|
|
|
0.21
|
|
Total goodwill and
intangible impairment
charges
|
113,180
|
|
|
12.1
|
|
|
97,537
|
|
|
0.84
|
|
Total significant
charges
|
$
|
197,855
|
|
|
21.2
|
%
|
|
$
|
153,688
|
|
|
$
|
1.33
|
|
|
|
(1)
|
Includes only
significant charges related to the pandemic. Less significant
charges that may have been incurred are not reflected in the table
above.
|
(2)
|
Primarily includes
impairment on leasehold improvements at certain underperforming
stores.
|
(3)
|
Includes
impairment on capitalized implementation costs related to our cloud
computing arrangements and other technology-related
assets.
|
Net Sales
For the third quarter, net sales were $351.4 million, an improvement of 14.8% from the
second quarter, reflecting robust digital performance and
rebounding store revenues. Sales decreased approximately 27.5% from
last year's third quarter, reflecting a decline in store sales as
well as the impact of 63 net permanent store closures since last
year's third quarter, partially offset by double-digit growth in
digital sales.
Comparable Sales
(1)
|
|
Thirteen Weeks
Ended
|
|
|
October 31,
2020
|
|
November 2,
2019
|
Chico's
|
|
(32.3)
|
%
|
|
(3.6)
|
%
|
White House Black
Market
|
|
(28.7)
|
|
|
(5.7)
|
|
Soma
|
|
10.5
|
|
|
11.3
|
|
Total
Company
|
|
(24.1)
|
|
|
(2.2)
|
|
|
|
(1)
|
The Company is not
providing comparable sales figures for the thirty-nine weeks ended
October 31, 2020 as it is not a meaningful measure due to the
significant impact of store closures during the first half of
fiscal 2020 as a result of the pandemic.
|
Gross Margin
For the third quarter, gross margin was $77.2 million, or 22.0% of net sales, up 740
basis points from the second quarter. Gross margin in last year's
third quarter was $171.0 million, or
35.3% of net sales. The third quarter year-over-year decrease in
gross margin rate primarily reflects deleverage of fixed occupancy
costs as well as lower maintained margin in the third quarter.
Lower maintained margin in part reflects the impact of our
Semi-Annual Sale which was extended an additional week due to the
timing of Labor Day this year.
Selling, General and Administrative
Expenses
For the third quarter, SG&A expenses were $153.1 million, or 43.6% of net sales, compared
to $180.6 million, or 37.3% of net
sales, for last year's third quarter. The $27.5 million decrease in SG&A expenses
reflects the Company's ongoing expense reduction initiatives to
align its cost structure with sales, partially offset by the impact
of pre-tax impairment charges of $8.4
million, or 2.4% of net sales, related to other long-lived
assets.
Income Taxes
For the third quarter, the effective tax rate
was 26.9% compared to 14.7% for last year's
third quarter. The 26.9% effective tax rate includes the
annual benefit of the fiscal 2020 pre-tax loss due to the
Coronavirus Aid, Relief, and Economic Security ("CARES") Act, which
is slightly offset by the impact of nondeductible book goodwill
impairment charges. The 14.7% effective tax rate for last year's
third quarter was primarily the result of an income tax benefit on
that third quarter's operating loss, offset by an unfavorable
fiscal 2018 provision-to-return adjustment, and a valuation
allowance on certain deferred tax assets for charitable
contributions with limitations.
Cash, Marketable Securities and Debt
At the end of the third quarter, cash and marketable securities
totaled $145.2 million. Debt at the
end of the third quarter totaled $149.0
million, remaining unchanged from the end of the first
quarter of fiscal 2020.
Inventories
At the end of the third quarter, inventories totaled
$256.5 million compared to
$277.5 million at the end of last
year's third quarter. This $20.9
million, or 7.5%, decrease reflects inventory and
assortments better aligned to consumer demand.
Fiscal 2020 Fourth-Quarter
Outlook
Given the ongoing market disruption caused by the pandemic and
related uncertainty on timing and extent of the market recovery,
the Company is not providing fiscal 2020 fourth-quarter guidance at
this time.
Conference Call Information
The Company is hosting a live conference call on Tuesday,
November 24, 2020 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, 0566754, 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 Style Connect, the Company's proprietary digital
styling tool that enables customers to conveniently shop wherever,
whenever and however they prefer.
As of October 31, 2020, the Company operated 1,310 stores
in the U.S. and sold merchandise through 68 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, www.soma.com and www.mytelltale.com as well as
through third-party channels.
To learn more about Chico's FAS, visit 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 that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements, including
without limitation the quote from Ms. Langenstein and the section
captioned "Business Highlights," relate to expectations and
projections regarding the Company's future performance and may
include the words "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "will," "plan," "outlook," "project,"
"should," "strategy," "potential", "confident" and similar terms.
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
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,
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 actual results
to differ include, but are not limited to: the effects of the
COVID-19 pandemic and uncertainties about its depth and duration,
including any resurgence, as well as the impacts to general
economic conditions and the economic slowdown affecting consumer
behavior and discretionary spending (before and after the COVID-19
pandemic) and any temporary store closures or other restrictions
(including reduced hours or capacity) due to government mandates;
the effectiveness of store reopenings, cost reduction initiatives
(including our ability to effectively restructure our lease
portfolio to obtain future rent relief), the extent, availability
and effectiveness of any COVID-19 stimulus packages or loan
programs, including the CARES Act, the ability of our third-party
business partners, including our suppliers, logistics providers,
vendors and landlords, to meet their obligations to us in light of
financial stress, staffing shortages, liquidity challenges,
bankruptcy filings by other industry participants and other
disruptions due to the COVID-19 pandemic, the impact of the
COVID-19 pandemic on our manufacturing operations in China, and trends in consumer behavior and
spending during and after the end of the pandemic; our ability to
successfully implement any alternatives that we pursue including
our ability to achieve the cost savings and additional liquidity
described in this release; government actions and policies;
increases in unemployment rates and taxes; local, regional,
national and international economic conditions; changes in the
general economic and business environment; changes in the general
or specialty retail or apparel industries, including the extent of
the market demand and overall level of spending for women's private
branded clothing and related accessories; the exiting of store
operations in Canada and other
future permanent store closures; the effectiveness of our brand
strategies, awareness and marketing programs; the ability to
successfully execute and achieve the expected results of our
business strategies and particular strategic initiatives
(including, but not limited to, the Company's digital strategy,
organizational restructure, retail fleet optimization plan and
three operating priorities which are driving stronger sales through
improved product and marketing; optimizing the customer journey by
simplifying, digitizing and extending the Company's unique and
personalized service; and transforming sourcing and supply chain
operations to increase product speed to market and improve
quality), sales initiatives and multi-channel strategies; customer
traffic; our ability to appropriately manage our inventory and
allocation processes; our ability to leverage inventory management
and targeted promotions; the successful recruitment of leadership
and the successful transition of members of our senior management
team; uncertainties regarding future unsolicited offers to buy the
Company and our ability to respond effectively to them as well as
to actions of activist shareholders and others; changes in the
political environment that create consumer uncertainty; the risk
that our investments in merchandise or marketing initiatives may
not deliver the results we anticipate; significant changes to
product import and distribution costs (such as unexpected
consolidation in the freight carrier industry, and the ability to
remain competitive with customer shipping terms and costs
pertaining to product deliveries and returns); new or increased
taxes or tariffs that could impact, among other things, our
sourcing from foreign suppliers; the risk that future legislation
may prohibit certain imports from China; and significant shifts in consumer
behavior. Other risk factors are detailed from time to time in the
Company's Quarterly Reports on Form 10-Q, Annual Report on Form
10-K and other reports filed with the Securities and Exchange
Commission. These factors should be considered in evaluating
forward–looking statements contained herein. There can be no
assurance that the actual future results, performance, or
achievements expressed or implied by such forward-looking
statements will occur. 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)
Investor Relations Contact:
Tom Filandro
ICR, Inc.
(646) 277-1235
tom.filandro@icrinc.com
Media Relations Contact:
Pashen Black
Director of Corporate Public Relations
(239) 218-3388
pashen.black@chicos.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 Loss
|
(Unaudited)
|
(in thousands, except
per share amounts)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2020
|
|
November 2,
2019
|
|
October 31,
2020
|
|
November 2,
2019
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's
|
$
|
163,847
|
|
|
46.6
|
%
|
|
$
|
249,973
|
|
|
51.5
|
%
|
|
$
|
434,868
|
|
|
46.4
|
%
|
|
$
|
795,599
|
|
|
52.6
|
%
|
White House Black
Market
|
104,024
|
|
|
29.6
|
|
|
154,941
|
|
|
32.0
|
|
|
270,197
|
|
|
28.8
|
|
|
455,695
|
|
|
30.2
|
|
Soma
|
83,545
|
|
|
23.8
|
|
|
79,792
|
|
|
16.5
|
|
|
232,789
|
|
|
24.8
|
|
|
259,496
|
|
|
17.2
|
|
Total Net
Sales
|
351,416
|
|
|
100.0
|
|
|
484,706
|
|
|
100.0
|
|
|
937,854
|
|
|
100.0
|
|
|
1,510,790
|
|
|
100.0
|
|
Cost of goods
sold
|
274,252
|
|
|
78.0
|
|
|
313,668
|
|
|
64.7
|
|
|
827,019
|
|
|
88.2
|
|
|
980,299
|
|
|
64.9
|
|
Gross
Margin
|
77,164
|
|
|
22.0
|
|
|
171,038
|
|
|
35.3
|
|
|
110,835
|
|
|
11.8
|
|
|
530,491
|
|
|
35.1
|
|
Selling, general and
administrative
expenses
|
153,096
|
|
|
43.6
|
|
|
180,586
|
|
|
37.3
|
|
|
390,571
|
|
|
41.6
|
|
|
536,977
|
|
|
35.5
|
|
Goodwill and
intangible impairment
|
—
|
|
|
0.0
|
|
|
—
|
|
|
0.0
|
|
|
113,180
|
|
|
12.1
|
|
|
—
|
|
|
0.0
|
|
Loss from
Operations
|
(75,932)
|
|
|
(21.6)
|
|
|
(9,548)
|
|
|
(2.0)
|
|
|
(392,916)
|
|
|
(41.9)
|
|
|
(6,486)
|
|
|
(0.4)
|
|
Interest (expense)
income, net
|
(536)
|
|
|
(0.2)
|
|
|
25
|
|
|
0.0
|
|
|
(1,387)
|
|
|
(0.1)
|
|
|
79
|
|
|
0.0
|
|
Loss before Income
Taxes
|
(76,468)
|
|
|
(21.8)
|
|
|
(9,523)
|
|
|
(2.0)
|
|
|
(394,303)
|
|
|
(42.0)
|
|
|
(6,407)
|
|
|
(0.4)
|
|
Income tax (benefit)
provision
|
(20,600)
|
|
|
(5.9)
|
|
|
(1,400)
|
|
|
(0.3)
|
|
|
(113,300)
|
|
|
(12.0)
|
|
|
2,000
|
|
|
0.2
|
|
Net
Loss
|
$
|
(55,868)
|
|
|
(15.9)
|
%
|
|
$
|
(8,123)
|
|
|
(1.7)
|
%
|
|
$
|
(281,003)
|
|
|
(30.0)
|
%
|
|
$
|
(8,407)
|
|
|
(0.6)
|
%
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share - basic
|
$
|
(0.48)
|
|
|
|
|
$
|
(0.07)
|
|
|
|
|
$
|
(2.43)
|
|
|
|
|
$
|
(0.07)
|
|
|
|
Net loss per common
and common
equivalent share – diluted
|
$
|
(0.48)
|
|
|
|
|
$
|
(0.07)
|
|
|
|
|
$
|
(2.43)
|
|
|
|
|
$
|
(0.07)
|
|
|
|
Weighted average
common shares
outstanding – basic
|
116,174
|
|
|
|
|
114,997
|
|
|
|
|
115,887
|
|
|
|
|
114,744
|
|
|
|
Weighted average
common and
common equivalent shares outstanding
– diluted
|
116,174
|
|
|
|
|
114,997
|
|
|
|
|
115,887
|
|
|
|
|
114,744
|
|
|
|
Dividends declared
per share
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.0900
|
|
|
|
|
$
|
0.2625
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
October 31,
2020
|
|
February 1,
2020
|
|
November 2,
2019
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
126,497
|
|
|
$
|
63,972
|
|
|
$
|
70,188
|
|
Marketable securities,
at fair value
|
18,667
|
|
|
63,893
|
|
|
57,253
|
|
Inventories
|
256,542
|
|
|
246,737
|
|
|
277,473
|
|
Prepaid expenses and
other current assets
|
36,766
|
|
|
41,069
|
|
|
44,722
|
|
Income taxes
receivable
|
56,774
|
|
|
7,131
|
|
|
8,876
|
|
Total Current
Assets
|
495,246
|
|
|
422,802
|
|
|
458,512
|
|
Property and
Equipment, net
|
256,715
|
|
|
315,382
|
|
|
323,591
|
|
Right of Use
Assets
|
582,074
|
|
|
648,397
|
|
|
664,052
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
16,360
|
|
|
96,774
|
|
|
96,774
|
|
Other intangible
assets, net
|
6,164
|
|
|
38,930
|
|
|
38,930
|
|
Other assets,
net
|
37,839
|
|
|
20,374
|
|
|
18,511
|
|
Total Other
Assets
|
60,363
|
|
|
156,078
|
|
|
154,215
|
|
|
$
|
1,394,398
|
|
|
$
|
1,542,659
|
|
|
$
|
1,600,370
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
147,354
|
|
|
$
|
134,204
|
|
|
$
|
151,664
|
|
Current lease
liabilities
|
208,351
|
|
|
157,043
|
|
|
155,403
|
|
Other current and
deferred liabilities
|
123,474
|
|
|
114,498
|
|
|
112,456
|
|
Total Current
Liabilities
|
479,179
|
|
|
405,745
|
|
|
419,523
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
149,000
|
|
|
42,500
|
|
|
46,250
|
|
Long-term lease
liabilities
|
509,118
|
|
|
555,922
|
|
|
578,971
|
|
Other noncurrent and
deferred liabilities
|
14,284
|
|
|
8,188
|
|
|
8,512
|
|
Deferred
taxes
|
52
|
|
|
212
|
|
|
3,999
|
|
Total Noncurrent
Liabilities
|
672,454
|
|
|
606,822
|
|
|
637,732
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,199
|
|
|
1,184
|
|
|
1,186
|
|
Additional paid-in
capital
|
496,993
|
|
|
492,129
|
|
|
490,281
|
|
Treasury stock, at
cost
|
(494,395)
|
|
|
(494,395)
|
|
|
(494,395)
|
|
Retained
earnings
|
238,877
|
|
|
531,602
|
|
|
546,461
|
|
Accumulated other
comprehensive gain (loss)
|
91
|
|
|
(428)
|
|
|
(418)
|
|
Total Shareholders'
Equity
|
242,765
|
|
|
530,092
|
|
|
543,115
|
|
|
$
|
1,394,398
|
|
|
$
|
1,542,659
|
|
|
$
|
1,600,370
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2020
|
|
November 2,
2019
|
Cash Flows from
Operating Activities:
|
|
|
|
Net loss
|
$
|
(281,003)
|
|
|
$
|
(8,407)
|
|
Adjustments to
reconcile net loss to net cash (used in) provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment
|
113,180
|
|
|
—
|
|
Inventory
write-offs
|
59,687
|
|
|
7,035
|
|
Depreciation and
amortization
|
48,536
|
|
|
67,876
|
|
Non-cash lease
expense
|
163,072
|
|
|
160,363
|
|
Exit of frontline
Canada operations
|
498
|
|
|
—
|
|
Right of use asset
impairment
|
3,236
|
|
|
—
|
|
Loss on disposal and
impairment of property and equipment, net
|
27,554
|
|
|
225
|
|
Deferred tax
benefit
|
(18,409)
|
|
|
(778)
|
|
Share-based
compensation expense
|
5,600
|
|
|
5,353
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(71,004)
|
|
|
(49,290)
|
|
Prepaid expenses and
other assets
|
(2,704)
|
|
|
(13,899)
|
|
Income tax
receivable
|
(49,643)
|
|
|
3,038
|
|
Accounts
payable
|
12,923
|
|
|
8,261
|
|
Accrued and other
liabilities
|
19,097
|
|
|
(2,600)
|
|
Lease
liability
|
(94,500)
|
|
|
(169,970)
|
|
Net cash (used in)
provided by operating activities
|
(63,880)
|
|
|
7,207
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(5,351)
|
|
|
(35,020)
|
|
Proceeds from sale of
marketable securities
|
50,500
|
|
|
39,967
|
|
Purchases of property
and equipment
|
(9,537)
|
|
|
(22,126)
|
|
Net cash provided by
(used in) investing activities
|
35,612
|
|
|
(17,179)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
255,500
|
|
|
—
|
|
Payments on
borrowings
|
(149,000)
|
|
|
(11,250)
|
|
Payments of debt
issuance costs
|
(4,279)
|
|
|
—
|
|
Proceeds from issuance
of common stock
|
412
|
|
|
1,088
|
|
Dividends
paid
|
(10,701)
|
|
|
(30,992)
|
|
Payments of tax
withholdings related to share-based awards
|
(1,133)
|
|
|
(2,549)
|
|
Net cash provided by
(used in) financing activities
|
90,799
|
|
|
(43,703)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(6)
|
|
|
(265)
|
|
Net increase
(decrease) in cash and cash equivalents
|
62,525
|
|
|
(53,940)
|
|
Cash and Cash
Equivalents, Beginning of period
|
63,972
|
|
|
124,128
|
|
Cash and Cash
Equivalents, End of period
|
$
|
126,497
|
|
|
$
|
70,188
|
|
Supplemental Detail on Net Loss 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 loss 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 and performance-based restricted stock units ("PSUs")
that have met their relevant performance criteria.
Net loss per share is determined using the two-class method when
it is more dilutive than the treasury stock method. Basic net loss
per share is computed by dividing net loss available to common
shareholders by the weighted-average number of common shares
outstanding during the period, including participating securities.
Diluted net loss 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 31, 2020 and November 2, 2019,
potential common shares were excluded from the computation of
diluted loss per share to the extent they were antidilutive.
The following unaudited table sets forth the computation of net
loss per basic and diluted share shown on the face of the
accompanying condensed consolidated statements of loss (in
thousands, except per share amounts):
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 31,
2020
|
|
November 2,
2019
|
|
October 31,
2020
|
|
November 2,
2019
|
Numerator
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(55,868)
|
|
|
$
|
(8,123)
|
|
|
$
|
(281,003)
|
|
|
$
|
(8,407)
|
|
Net income and
dividends declared allocated to
participating securities
|
|
—
|
|
|
—
|
|
|
(173)
|
|
|
—
|
|
Net loss available to
common shareholders
|
|
$
|
(55,868)
|
|
|
$
|
(8,123)
|
|
|
$
|
(281,176)
|
|
|
$
|
(8,407)
|
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding –
basic
|
|
116,174
|
|
|
114,997
|
|
|
115,887
|
|
|
114,744
|
|
Dilutive effect of
non-participating securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average
common and common
equivalent shares outstanding – diluted
|
|
116,174
|
|
|
114,997
|
|
|
115,887
|
|
|
114,744
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.48)
|
|
|
$
|
(0.07)
|
|
|
$
|
(2.43)
|
|
|
$
|
(0.07)
|
|
Diluted
|
|
$
|
(0.48)
|
|
|
$
|
(0.07)
|
|
|
$
|
(2.43)
|
|
|
$
|
(0.07)
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
October 31, 2020
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
August 1,
2020
|
|
New
Stores
|
|
Closures
|
|
October 31,
2020
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
520
|
|
|
—
|
|
|
(2)
|
|
|
518
|
|
|
|
Chico's
outlets
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
|
WHBM frontline
boutiques
|
354
|
|
|
1
|
|
|
(1)
|
|
|
354
|
|
|
|
WHBM
outlets
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|
|
Soma frontline
boutiques
|
242
|
|
|
—
|
|
|
(1)
|
|
|
241
|
|
|
|
Soma
outlets
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
|
Total Chico's FAS,
Inc.
|
1,313
|
|
|
1
|
|
|
(4)
|
|
|
1,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 1,
2020
|
|
New
Stores
|
|
Closures
|
|
Other Changes
in
SSF
|
|
October 31,
2020
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,416,966
|
|
|
—
|
|
|
(3,987)
|
|
|
—
|
|
|
1,412,979
|
|
Chico's
outlets
|
309,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309,921
|
|
WHBM frontline
boutiques
|
830,363
|
|
|
2,196
|
|
|
(2,810)
|
|
|
—
|
|
|
829,749
|
|
WHBM
outlets
|
117,484
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,484
|
|
Soma frontline
boutiques
|
456,606
|
|
|
—
|
|
|
(2,049)
|
|
|
—
|
|
|
454,557
|
|
Soma
outlets
|
34,329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,329
|
|
Total Chico's FAS,
Inc.
|
3,165,669
|
|
|
2,196
|
|
|
(8,846)
|
|
|
—
|
|
|
3,159,019
|
|
|
As of
October 31, 2020, the Company's franchise operations consisted
of 68 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 31, 2020
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
February 1,
2020
|
|
New
Stores
|
|
Closures
|
|
October 31,
2020
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
525
|
|
|
—
|
|
|
(7)
|
|
|
518
|
|
|
|
Chico's
outlets
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
|
WHBM frontline
boutiques
|
362
|
|
|
1
|
|
|
(9)
|
|
|
354
|
|
|
|
WHBM
outlets
|
59
|
|
|
—
|
|
|
(3)
|
|
|
56
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
(6)
|
|
|
—
|
|
|
|
Soma frontline
boutiques
|
244
|
|
|
—
|
|
|
(3)
|
|
|
241
|
|
|
|
Soma
outlets
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
|
Total Chico's FAS,
Inc.
|
1,341
|
|
|
1
|
|
|
(32)
|
|
|
1,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 1,
2020
|
|
New
Stores
|
|
Closures
|
|
Other Changes
in
SSF
|
|
October 31,
2020
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,429,592
|
|
|
—
|
|
|
(19,050)
|
|
|
2,437
|
|
|
1,412,979
|
|
Chico's
outlets
|
309,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309,921
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
(9,695)
|
|
|
—
|
|
|
—
|
|
WHBM frontline
boutiques
|
848,778
|
|
|
2,196
|
|
|
(20,391)
|
|
|
(834)
|
|
|
829,749
|
|
WHBM
outlets
|
123,735
|
|
|
—
|
|
|
(6,504)
|
|
|
253
|
|
|
117,484
|
|
WHBM
Canada
|
15,588
|
|
|
—
|
|
|
(15,588)
|
|
|
—
|
|
|
—
|
|
Soma frontline
boutiques
|
460,153
|
|
|
—
|
|
|
(5,308)
|
|
|
(288)
|
|
|
454,557
|
|
Soma
outlets
|
34,329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,329
|
|
Total Chico's FAS,
Inc.
|
3,231,791
|
|
|
2,196
|
|
|
(76,536)
|
|
|
1,568
|
|
|
3,159,019
|
|
|
As of
October 31, 2020, the Company's franchise operations consisted
of 68 international retail locations in Mexico and 2 domestic
airport locations.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/chicos-fas-inc-reports-third-quarter-results-301179347.html
SOURCE Chico's FAS, Inc.