Chico's FAS, Inc. Announces Fourth Quarter Comparable Store Sales Increase of 14.6% and Diluted EPS of $0.10
FORT MYERS, Fla., Feb. 24 /PRNewswire-FirstCall/ --
- Sales increased 16.7% to $435.7 million with direct-to-consumer sales increasing 42%
- Fourth quarter gross margin expansion of over 1000 basis points
- Cash and marketable securities were $423.5 million at year-end
Chico's FAS, Inc. (NYSE: CHS) today announced its financial results for the fourth quarter and fiscal year ended January 30, 2010.
(Logo: http://www.newscom.com/cgi-bin/prnh/20091112/FL09527LOGO )
Fourth Quarter and Fiscal Year 2009 Financial Results
For the fourth quarter, the Company recorded net income of $17.5 million, or $0.10 per diluted share, compared to a net loss of $40.5 million, or $0.23 per diluted share, for last year's fourth quarter. The fourth quarter 2009 results included a non-cash impairment charge totaling approximately $1.3 million, net of tax, resulting from an additional write down of a note receivable to current market value. Excluding the $1.3 million charge in the current quarter and the $15.7 million, net of tax, impairment and restructuring charges in the prior year's fourth quarter, the Company had net income for the current quarter of $18.8 million, or $0.10 per diluted share, compared to a net loss of $24.8 million, or $0.14 per diluted share, for the like period last year.
For fiscal 2009, the Company had net income of $69.6 million, or $0.39 per diluted share compared to a net loss of $19.1 million, or $0.11 per diluted share for fiscal 2008. Excluding the impairment and restructuring charges in each year, the Company had net income for the year of $79.2 million, or $0.44 per diluted share versus a net loss of $4.9 million, or $0.03 per diluted share in the prior year.
Sales
Net sales for the fourth quarter increased from $373.4 million to $435.7 million, and for the full year net sales increased from $1.58 billion to $1.71 billion. Consolidated comparable store sales increased 14.6% for the quarter compared to a 13.0% decrease for the like period last year. The Chico's/Soma Intimates brands' comparable store sales increased 11.6% compared to a 16.1% decrease for the like period last year, and the White House | Black Market ("WH|BM") brand's comparable store sales increased 21.2% compared to a 5.0% decrease for the like period last year.
For fiscal 2009, consolidated comparable store sales increased 6.1% compared to a 15.1% decrease last year. The Chico's/Soma brands' comparable store sales increased 4.1% compared to a 17.4% decrease last year, and the WH|BM brand's comparable store sales increased 10.8% compared to a decrease of 8.0% last year.
Direct-to-consumer sales, not included in comparable store sales, increased approximately 42% for the fourth quarter over the like period last year and approximately 39% for the 2009 fiscal year over fiscal year 2008.
Gross Margin
For the quarter, gross margin, expressed as a percentage of net sales, increased 1,020 basis points to 54.6% from 44.4% in the prior year's fourth quarter. In dollars, gross margin increased from $166.0 million to $238.0 million, representing a $72 million pre tax improvement. The gross margin increase was attributable to significantly higher merchandise margins at both Chico's and WH|BM brands benefiting from substantially lower markdowns, improved full-price selling and, to a lesser extent, higher initial markups for both brands.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A") for the fourth quarter declined from $228.4 million in the prior period to $212.0 million primarily due to the recognition of $23.7 million in pre-tax impairment and restructuring charges in the fourth quarter last year. Excluding both current year impairment charges and prior year impairment and restructuring charges, SG&A would have been $210.0 million for the current quarter compared to $204.8 million in the prior period, which represents a 2.5% increase in dollars but a 660 basis point improvement as a percentage of net sales.
Store operating expenses for the fourth quarter increased by $4.6 million, primarily due to increases in store occupancy and personnel costs. However, expressed as a percentage of net sales, store operating expenses decreased 500 basis points due to the leverage resulting from positive comparable store sales.
Marketing expenses for the fourth quarter increased by $0.4 million primarily due to an increase in print and television network advertising associated with expanded national marketing campaigns. However, expressed as a percentage of net sales, marketing expenses decreased by 60 basis points year over year.
National Store Support Center ("NSSC") expenses for the quarter, including corporate and other non-brand specific expenses, were about flat to last year but decreased by 100 basis points due to the leverage associated with improved comparable store sales.
Inventories
End of year inventory increased $6.1 million or approximately 5% from the prior year. Consolidated inventory at the end of the year increased 4% per selling square foot to $53 compared to $51 at the end of the prior year. End of year inventory for the WH|BM brand decreased approximately 5% per selling square foot over the prior year, while Chico's brand inventory increased approximately 3% year over year.
Cash and Marketable Securities
Cash and marketable securities at the end of fiscal 2009 increased 57.6% to $423.5 million from $268.7 million at the end of fiscal 2008. Net cash provided by operating activities for the fiscal year increased by $115.9 million over the prior year primarily as a result of higher cash flows from operations, and an increase in accounts payables. Additionally, the Company invested $67.9 million in capital expenditures in fiscal 2009 versus $104.6 million in fiscal 2008.
ABOUT CHICO'S FAS, INC.
The Company is a women's specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,084 specialty stores, including stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.
The Chico's brand currently operates 599 boutique and 45 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.
White House | Black Market currently operates 333 boutique and 17 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whitehouseblackmarket.com.
Soma Intimates is the Company's developing concept with 86 boutique stores and 4 outlet stores today. Soma Intimates also publishes a catalog for its customers and conducts e-commerce at www.soma.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the Company's latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company's latest annual report to stockholders, the Company's filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company's business, results of operations and financial condition. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.
For more detailed information on Chico's FAS, Inc., please go to our corporate website, www.chicosfas.com.
Chico's FAS, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Fifty-Two Weeks Ended
---------------------
(unaudited)
January 30, 2010 January 31, 2009
---------------- ----------------
% of % of
Amount Sales Amount Sales
------ ----- ------ -----
Net sales:
Chico's/Soma
stores $1,125,192 65.7 $1,074,939 67.9
WH|BM stores 489,631 28.6 436,875 27.6
Direct-to-consumer 98,327 5.7 70,591 4.5
------ --- ------ ---
Total net sales 1,713,150 100.0 1,582,405 100.0
Cost of goods sold 753,409 44.0 762,913 48.2
------- ---- ------- ----
Gross margin 959,741 56.0 819,492 51.8
Selling, general and
administrative expenses:
Store operating expenses 647,040 37.8 645,352 40.8
Marketing 78,075 4.5 80,326 5.1
National Store Support
Center 111,447 6.5 109,744 6.9
Impairment and
restructuring charges 15,026 0.9 23,664 1.5
------ --- ------ ---
Total selling, general,
and administrative
expenses 851,588 49.7 859,086 54.3
------- ---- ------- ----
Income (loss)
from operations 108,153 6.3 (39,594) (2.5)
Interest income, net 1,693 0.1 7,757 0.5
----- --- ----- ---
Income (loss)
before income taxes 109,846 6.4 (31,837) (2.0)
Income tax provision
(benefit) 40,200 2.3 (12,700) (0.8)
------ --- ------- ----
Net income (loss) $69,646 4.1 $(19,137) (1.2)
======= === ======== ====
Per share data:
Net income (loss)
per common share-basic $0.39 $(0.11)
===== ======
Net income (loss)
per common & common
equivalent share–diluted $0.39 $(0.11)
===== ======
Weighted average common
shares outstanding–basic 177,499 176,606
======= =======
Weighted average common
& common equivalent
shares outstanding–diluted 178,858 176,606
======= =======
Thirteen Weeks Ended
--------------------
(unaudited) (unaudited)
January 30, 2010 January 31, 2009
---------------- ----------------
% of % of
Amount Sales Amount Sales
------ ----- ------ -----
Net sales:
Chico's/Soma stores $271,817 62.4 $242,887 65.0
WH|BM stores 132,312 30.4 108,179 29.0
Direct-to-consumer 31,601 7.2 22,313 6.0
------ --- ------ ---
Total net sales 435,730 100.0 373,379 100.0
Cost of goods sold 197,697 45.4 207,423 55.6
------- ---- ------- ----
Gross margin 238,033 54.6 165,956 44.4
Selling, general
and administrative
expenses:
Store operating expenses 164,559 37.8 159,916 42.8
Marketing 19,099 4.4 18,653 5.0
National Store
Support Center 26,324 6.0 26,191 7.0
Impairment and
restructuring charges 2,000 0.4 23,664 6.3
----- --- ------ ---
Total selling,
general, and
administrative
expenses 211,982 48.6 228,424 61.1
------- ---- ------- ----
Income (loss) from
operations 26,051 6.0 (62,468) (16.7)
Interest income, net 357 0.1 1,324 0.3
--- --- ----- ---
Income (loss)
before income
taxes 26,408 6.1 (61,144) (16.4)
Income tax provision
(benefit) 8,900 2.1 (20,600) (5.5)
----- --- ------- ----
Net income (loss) $17,508 4.0 $(40,544) (10.9)
======= === ======== =====
Per share data:
Net income (loss)
per common share-basic $0.10 $( 0.23)
===== =======
Net income (loss)
per common &
common equivalent
share–diluted $0.10 $( 0.23)
===== =======
Weighted average
common shares
outstanding–basic 177,950 177,069
======= =======
Weighted average
common & common
equivalent shares
outstanding–diluted 179,509 177,069
======= =======
Chico's FAS, Inc.
Consolidated Balance Sheets
(in thousands)
January 30, January 31, February 2,
2010 2009 2008
---- ---- ----
(Unaudited)
ASSETS
Current Assets:
Cash and cash
equivalents $37,043 $26,549 $13,801
Marketable
securities, at
market 386,500 242,153 260,469
Receivables 3,922 33,993 11,924
Income tax receivable 312 11,706 23,973
Inventories 138,516 132,413 144,261
Prepaid expenses 24,023 21,702 18,999
Deferred taxes 9,664 17,859 13,306
------- ------- -------
Total Current
Assets 599,980 486,375 486,733
Property and Equipment:
Land and land
improvements 21,978 18,627 17,867
Building and building
improvements 82,169 74,998 62,877
Equipment, furniture
and fixtures 388,392 376,218 347,937
Leasehold
improvements 412,834 418,691 396,650
------- ------- -------
Total Property
and Equipment 905,373 888,534 825,331
Less accumulated
depreciation and
amortization (383,844) (327,989) (257,378)
-------- -------- --------
Property and
Equipment, Net 521,529 560,545 567,953
Other Assets:
Goodwill 96,774 96,774 96,774
Other intangible
assets 38,930 38,930 38,930
Deferred taxes 36,321 38,458 22,503
Other assets, net 25,269 5,101 37,233
------- ------- -------
Total Other
Assets 197,294 179,263 195,440
------- ------- -------
$1,318,803 $1,226,183 $1,250,126
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $79,219 $56,542 $79,030
Accrued liabilities 95,862 88,446 100,726
Current portion of
deferred liabilities 2,221 1,748 1,437
----- ----- -----
Total Current
Liabilities 177,302 146,736 181,193
Noncurrent Liabilities:
Deferred liabilities 159,583 177,251 156,417
Stockholders' Equity:
Common stock 1,781 1,771 1,762
Additional paid-in
capital 268,109 258,312 249,639
Retained earnings 711,624 641,978 661,115
Other accumulated
comprehensive income 404 135 –
--- --- ---
Total Stockholders'
Equity 981,918 902,196 912,516
------- ------- -------
$1,318,803 $1,226,183 $1,250,126
========== ========== ==========
Chico's FAS, Inc.
Consolidated Cash Flow Statements
(in thousands)
Fifty-Two Weeks Ended
---------------------
January 30, January 31,
2010 2009
----------- -----------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $69,646 $(19,137)
------- --------
Adjustments to reconcile net income (loss) to
net cash provided by operating activities -
Depreciation and amortization, cost of
goods sold 8,372 8,782
Depreciation and amortization, other 88,000 88,790
Deferred tax expense (benefit) 5,647 (20,507)
Stock-based compensation expense, cost of
goods sold 2,163 2,769
Stock-based compensation expense, other 5,239 9,821
Excess tax benefit of stock-based
compensation (3,194) (100)
Impairment charges 15,026 13,691
Deferred rent expense, net 2,338 6,060
Loss on disposal of property and equipment 1,372 761
Decrease (increase) in assets -
Receivables, net 4,237 3,766
Income tax receivable 11,394 12,267
Inventories (6,103) 11,847
Prepaid expenses and other (2,489) 4,224
Increase (decrease) in liabilities -
Accounts payable 22,677 (22,488)
Accrued and other deferred liabilities (8,955) (1,100)
------ ------
Total adjustments 145,724 118,583
------- -------
Net cash provided by operating
activities 215,370 99,446
------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (590,223) (569,358)
Proceeds from sale of marketable securities 446,146 587,809
Purchases of property and equipment (67,920) (104,615)
------- --------
Net cash used in investing activities (211,997) (86,164)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 4,857 306
Excess tax benefit of stock-based compensation 3,194 100
Cash paid for deferred financing costs – (629)
Repurchase of common stock (930) (311)
---- ----
Net cash provided by (used in)
financing activities 7,121 (534)
----- ----
Net increase in cash and cash
equivalents 10,494 12,748
CASH AND CASH EQUIVALENTS, Beginning of period 26,549 13,801
------ ------
CASH AND CASH EQUIVALENTS, End of period $37,043 $26,549
======= =======
SEC Regulation G - The Company reports its consolidated financial results in
accordance with generally accepted accounting principles (GAAP). However, to
supplement these consolidated financial results, management believes that certain
non-GAAP operating results, which exclude impairment and certain other
non-recurring charges, 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 basis is presented
in the table below:
Chico's FAS, Inc.
Non-GAAP to GAAP Reconciliation of Net Income (Loss) and Diluted EPS
(in thousands, except per share amounts)
Fifty-Two Weeks Ended Thirteen Weeks Ended
Net income January 30, January 31, January 30, January 31,
(loss): 2010 2009 2010 2009
------- ---------- ---------- ------------ ----------
GAAP basis $69,646 ($19,137) $17,508 ($40,544)
Add: Impact
of impairment
charges 15,026 23,664 2,000 23,664
Less: Tax
effect on
impairment
charges (5,499) (9,440) (674) (7,969)
------ ------ ---- ------
Non-GAAP
adjusted
basis $79,173 ($4,913) $18,834 ($24,849)
======= ======= ======= ========
Net income (loss)
per diluted share:
-------------------
GAAP basis $0.39 ($0.11) $0.10 ($0.23)
Add: Impact
of impairment
charges, net
of tax 0.05 0.08 0.00 0.09
---- ---- ---- ----
Non-GAAP
adjusted
basis $0.44 ($0.03) $0.10 ($0.14)
====== ===== ====== ======
| Executive Contact: |
|
| Robert C. Atkinson |
|
| Vice President-Investor Relations |
|
| Chico's FAS, Inc. |
|
| (239) 274-4199 |
|
SOURCE Chico's FAS, Inc.
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