FORT 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.
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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 Margin
For 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 Rate
For 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.
Outlook
For 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 Ended |
||||||||
April 28, 2012 |
April 30, 2011 |
|||||||
Amount |
% of Sales |
Amount |
% of Sales |
|||||
Net Sales: |
||||||||
Chico's/Soma Intimates |
$ 425,342 |
65.3 |
$ 374,934 |
69.8 |
||||
White House | Black Market |
191,727 |
29.5 |
162,224 |
30.2 |
||||
Boston Proper |
33,748 |
5.2 |
– |
– |
||||
Net sales |
650,817 |
100.0 |
537,158 |
100.0 |
||||
Cost of goods sold |
272,221 |
41.8 |
219,495 |
40.9 |
||||
Gross margin |
378,596 |
58.2 |
317,663 |
59.1 |
||||
Selling, general and administrative expenses: |
||||||||
Selling, general and administrative expenses |
291,676 |
44.8 |
244,845 |
45.5 |
||||
Acquisition and integration costs |
558 |
0.1 |
– |
– |
||||
Total selling, general and administrative expenses |
292,234 |
44.9 |
244,845 |
45.5 |
||||
Income from operations |
86,362 |
13.3 |
72,818 |
13.6 |
||||
Interest income, net |
183 |
0.0 |
400 |
0.0 |
||||
Income before income taxes |
86,545 |
13.3 |
73,218 |
13.6 |
||||
Income tax provision |
32,900 |
5.1 |
27,300 |
5.1 |
||||
Net income |
$ 53,645 |
8.2 |
$ 45,918 |
8.5 |
||||
Per share data: |
||||||||
Net income per common share–basic |
$ 0.32 |
$ 0.26 |
||||||
Net income per common and common equivalent share–diluted |
$ 0.32 |
$ 0.26 |
||||||
Weighted average common shares outstanding–basic |
163,974 |
174,881 |
||||||
Weighted average common and common equivalent shares outstanding–diluted |
164,876 |
176,112 |
||||||
Dividends declared per share |
$ 0.105 |
$ 0.10 |
Chico's FAS, Inc. Consolidated Balance Sheets (in thousands) |
||||||
April 28, |
January 28, |
April 30, |
||||
2012 |
2012 |
2011 |
||||
(Unaudited) |
(Unaudited) |
|||||
ASSETS |
||||||
Current Assets: |
||||||
Cash and cash equivalents |
$ 147,077 |
$ 58,919 |
$ 123,409 |
|||
Marketable securities, at fair value |
193,446 |
188,934 |
442,815 |
|||
Inventories |
213,676 |
194,469 |
198,544 |
|||
Prepaid expenses and other current assets |
50,973 |
55,104 |
45,150 |
|||
Total Current Assets |
605,172 |
497,426 |
809,918 |
|||
Property and Equipment, Net |
564,904 |
550,230 |
507,963 |
|||
Other Assets: |
||||||
Goodwill |
238,693 |
238,693 |
96,774 |
|||
Other intangible assets |
131,022 |
132,112 |
38,930 |
|||
Other assets, net |
6,821 |
6,691 |
7,133 |
|||
Total Other Assets |
376,536 |
377,496 |
142,837 |
|||
$ 1,546,612 |
$ 1,425,152 |
$ 1,460,718 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Current Liabilities: |
||||||
Accounts payable |
$ 147,925 |
$ 100,395 |
$ 129,894 |
|||
Other current liabilities |
164,746 |
137,714 |
140,692 |
|||
Total Current Liabilities |
312,671 |
238,109 |
270,586 |
|||
Noncurrent Liabilities: |
||||||
Deferred liabilities |
128,054 |
125,690 |
127,769 |
|||
Deferred taxes |
49,528 |
52,125 |
– |
|||
Total Noncurrent Liabilities |
177,582 |
177,815 |
127,769 |
|||
Stockholders' Equity: |
||||||
Preferred stock |
– |
– |
– |
|||
Common stock |
1,677 |
1,657 |
1,762 |
|||
Additional paid-in capital |
313,756 |
302,612 |
287,853 |
|||
Retained earnings |
740,720 |
704,631 |
772,215 |
|||
Accumulated other comprehensive income |
206 |
328 |
533 |
|||
Total Stockholders' Equity |
1,056,359 |
1,009,228 |
1,062,363 |
|||
$ 1,546,612 |
$ 1,425,152 |
$ 1,460,718 |
||||
Chico's FAS, Inc. Consolidated Cash Flow Statements (Unaudited) (in thousands) |
|||
Thirteen Weeks Ended |
|||
April 28, 2012 |
April 30, 2011 |
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
Net income |
$ 53,645 |
$ 45,918 |
|
Adjustments to reconcile net income to net cash provided by operating activities — |
|||
Depreciation and amortization |
26,092 |
24,188 |
|
Deferred tax benefit |
(2,014) |
(1,375) |
|
Stock-based compensation expense |
5,318 |
3,636 |
|
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 equipment |
1,285 |
1,434 |
|
(Increase) decrease in assets — Inventories |
(19,206) |
(38,730) |
|
Prepaid expenses and other assets |
3,284 |
3,459 |
|
Increase in liabilities — Accounts payable |
38,726 |
14,404 |
|
Accrued and other deferred liabilities |
36,845 |
29,119 |
|
Total adjustments |
83,167 |
31,043 |
|
Net cash provided by operating activities |
136,812 |
76,961 |
|
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 stock |
5,815 |
1,373 |
|
Excess tax benefit from stock-based compensation |
3,136 |
762 |
|
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 equivalents |
88,158 |
108,714 |
|
CASH AND CASH EQUIVALENTS, Beginning of period |
58,919 |
14,695 |
|
CASH AND CASH EQUIVALENTS, End of period |
$ 147,077 |
$ 123,409 |
|
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 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, 2011 |
||
Net income |
$ 53,645 |
$ 45,918 |
|
Net 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 |
163,974 |
174,881 |
|
Weighted average common and common equivalent shares outstanding – diluted |
164,876 |
176,112 |
|
Net income per common share: |
|||
Basic |
$ 0.32 |
$ 0.26 |
|
Diluted |
$ 0.32 |
$ 0.26 |
Chico's FAS, Inc. |
|||||||||||
Boutique Count and Square Footage |
|||||||||||
As of April 28, 2012 |
|||||||||||
As of |
New |
As of |
|||||||||
1/28/2012 |
Stores |
Closures |
4/28/2012 |
||||||||
Store count: |
|||||||||||
Chico's frontline boutiques |
601 |
3 |
(1) |
603 |
|||||||
Chico's outlets |
83 |
3 |
– |
86 |
|||||||
WH|BM frontline boutiques |
364 |
9 |
(1) |
372 |
|||||||
WH|BM outlets |
27 |
3 |
– |
30 |
|||||||
Soma frontline boutiques |
164 |
15 |
(2) |
177 |
|||||||
Soma outlets |
17 |
– |
(2) |
15 |
|||||||
Total Chico's FAS, Inc. |
1,256 |
33 |
(6) |
1,283 |
|||||||
Remodels/ |
|||||||||||
Relos and |
|||||||||||
As of |
New |
change in |
As of |
||||||||
1/28/2012 |
Stores |
Closures |
SSF |
4/28/2012 |
|||||||
Net selling square footage (SSF): |
|||||||||||
Chico's frontline boutiques |
1,631,674 |
7,703 |
(2,725) |
887 |
1,637,539 |
||||||
Chico's outlets |
213,475 |
7,189 |
– |
– |
220,664 |
||||||
WH|BM frontline boutiques |
768,442 |
23,578 |
(2,507) |
4,150 |
793,663 |
||||||
WH|BM outlets |
53,263 |
6,512 |
– |
– |
59,775 |
||||||
Soma frontline boutiques |
326,858 |
28,773 |
(3,809) |
(5,466) |
346,356 |
||||||
Soma outlets |
32,676 |
– |
(3,669) |
50 |
29,057 |
||||||
Total Chico's FAS, Inc. |
3,026,388 |
73,755 |
(12,710) |
(379) |
3,087,054 |
Executive Contact:
Todd Vogensen
Vice President-Investor Relations
Chico's FAS, Inc.
(239) 346-4199
SOURCE Chico's FAS, Inc.
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