FORT MYERS, Fla., Nov. 22,
2016 /PRNewswire/ --
Cost Reduction and Operating Efficiency Initiatives Drive
Significant Earnings Growth
- GAAP earnings per share up $0.27 to $0.18 compared to last year
- Non-GAAP earnings per share up $0.07, or 54%, to $0.20 compared to last year
- Company on track to deliver double digit operating
margin
Chico's FAS, Inc. (NYSE: CHS) today announced its financial
results for the fiscal 2016 third quarter and thirty-nine weeks
ended October 29, 2016.
For the thirteen weeks ended October 29, 2016 ("the third
quarter"), the Company reported net income of $23.6 million, or $0.18 per diluted share, compared to a net loss
of $11.6 million, or $0.09 per diluted share, for the thirteen weeks
ended October 31, 2015. The Company reported third quarter
2016 adjusted net income of $26.4
million, or $0.20 adjusted
earnings per diluted share, compared to adjusted net income of
$17.7 million, or $0.13 adjusted earnings per diluted share, in
last year's third quarter. The adjusted results exclude EPS net
charges of $0.02 in 2016 and
$0.22 in 2015 related to
restructuring and strategic charges and Boston Proper, as presented
in the accompanying GAAP to non-GAAP reconciliation.
For the thirty-nine weeks ended October 29, 2016, the
Company reported net income of $77.7
million, or $0.58 per diluted
share, compared to net income of $23.0
million, or $0.16 per diluted
share, for the thirty-nine weeks ended October 31, 2015. The
Company reported adjusted net income of $93.2 million, or $0.70 adjusted earnings per diluted share,
compared to adjusted net income of $99.7
million, or $0.70 adjusted
earnings per diluted share, in 2015. The adjusted results exclude
EPS net charges of $0.12 in 2016 and
$0.54 in 2015 related to
restructuring and strategic charges and Boston Proper, as presented
in the accompanying GAAP to non-GAAP reconciliation.
Shelley Broader, CEO and
President, said, "Our third quarter earnings exceeded expectations.
As a result of our efforts to transform Chico's FAS for the future,
we were able to achieve significant earnings growth and are
demonstrating considerable progress toward our goal of double digit
operating margin. We are fully engaged in the implementation of our
cost reduction and operating efficiency initiatives, and our
continued progress reinforces our confidence in the company's
strategic plan. The improvements across the organization,
additional recent hires, customers' positive response to new
merchandising initiatives, and other brand specific actions
underway are re-energizing the company and fortifying our
foundation for revenue and earnings growth and sustainable value
creation."
Net Sales
For the third quarter, net sales were $596.9 million compared to $645.4 million in last year's third quarter. This
decrease of 7.5% included $18.7
million related to Boston Proper. When excluding Boston
Proper from fiscal 2015, net sales decreased 4.8%, primarily
reflecting a decline in comparable sales of 4.9%, comprised of
reduced transaction count and lower average dollar sale.
Third quarter average unit retail increased with a decline in
promotional activity.
Comparable Sales
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 29,
2016
|
|
October 31,
2015
|
|
October 29,
2016
|
|
October 31,
2015
|
Chico's
|
|
|
(5.6)%
|
|
|
(4.7)%
|
|
|
(5.4)%
|
|
|
(2.1)%
|
White House Black
Market
|
|
|
(5.5)%
|
|
|
(2.0)%
|
|
|
(3.5)%
|
|
|
(0.8)%
|
Soma
|
|
|
0.4%
|
|
|
(0.9)%
|
|
|
0.6%
|
|
|
3.6%
|
Total
Company
|
|
|
(4.9)%
|
|
|
(3.3)%
|
|
|
(4.0)%
|
|
|
(1.0)%
|
Gross Margin
For the third quarter, gross margin was $230.3 million, or 38.6%, compared to
$249.2 million, or 38.6%, in last
year's third quarter. When excluding Boston Proper from fiscal
2015, gross margin decreased 40 basis points in fiscal 2016
compared to gross margin of $244.2
million, or 39.0% last year. This 40 basis point decrease
from the 2015 adjusted gross margin rate primarily reflects an
improvement in merchandise margin, which was more than offset by
deleverage of occupancy costs and incentive compensation.
Selling, General and Administrative Expenses
For the third quarter, selling, general and administrative
expenses ("SG&A") were $188.4
million, or 31.6%, compared to $226.3
million, or 35.1% last year. When excluding Boston Proper
from fiscal 2015, SG&A decreased $27.3
million, or 280 basis points, compared to $215.6 million, or 34.4% last year. This
$27.3 million decrease is primarily
due to a reduction in unproductive marketing spend and savings in
store labor, partially offset by an increase in incentive
compensation.
Restructuring and Strategic Charges
For the third quarter, the Company recorded pre-tax
restructuring and strategic charges of $10.8
million, primarily consisting of outside services related to
cost reduction and operating efficiency initiatives (the
"Initiatives"). On an after-tax basis, the impact of these charges
was $6.8 million, or $0.05 per diluted share.
Income Tax Expense
For the third quarter, the effective tax rate of 22.9% reflected
an additional tax benefit on the disposition of Boston Proper's
stock and the recognition of additional income tax credits.
Excluding the additional tax benefit, the effective tax rate for
the third quarter of 2016 would have been 36.2% compared to 37.0%
in the same period last year.
Inventories
At the end of the third quarter of 2016, inventories totaled
$261.3 million compared to
$269.0 million last year. When
excluding Boston Proper store inventories from fiscal 2015,
inventories decreased $6.0 million,
or 2.2%, in the third quarter of fiscal 2016 compared to
$267.3 million last year, primarily
reflecting improved inventory management.
Share Repurchase Program
During the third quarter of fiscal 2016, the Company
repurchased 1.7 million shares for $20.0 million, at an
average of $12.13 per
share, under its $300.0 million
share repurchase program announced in November 2015, with $183.7
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 these 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 Fourth Quarter Outlook
The fiscal 2016 fourth quarter outlook excludes Boston Proper
for comparability purposes. The Company is anticipating a low
single digit comparable sales decline in the fourth quarter
compared to last year. We expect improvement in merchandise margin
to be more than offset by occupancy deleverage, resulting in a
reduction in gross margin rate. We continue to make progress on our
Initiatives and expect a decrease in SG&A as a percent of
sales; however, the reduction in marketing spend will be at a lower
level than recognized in the third quarter. Fourth quarter
total inventory is planned to be lower than last year.
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 October 29, 2016, the Company operated 1,510 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
Some statements herein may be
"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 the
future success of our store concepts, the implementation and
success of our previously announced restructuring program and
organizational redesign, and the implementation and success of our
strategies to increase the our brands' sales volume and
profitability through four previously announced focus areas. These
statements may address items such as expectations for future sales,
gross margin, SG&A (particularly estimated expected
savings), operating margin, inventory levels, comparable store
sales and cash needs, as well as, planned store openings, closings
and expansions. 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, we
cannot guarantee their accuracy or our future 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 or apparel industries, 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 other factors 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 (Loss)
(Unaudited)
(in thousands,
except per share amounts)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 29,
2016
|
|
October 31,
2015
|
|
October 29,
2016
|
|
October 31,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's
|
$
|
312,203
|
|
|
52.3
|
|
|
$
|
333,421
|
|
|
51.7
|
|
|
$
|
995,067
|
|
|
53.0
|
|
|
$
|
1,058,697
|
|
|
52.2
|
|
White House Black
Market
|
210,389
|
|
|
35.2
|
|
|
220,965
|
|
|
34.2
|
|
|
633,420
|
|
|
33.8
|
|
|
659,682
|
|
|
32.5
|
|
Soma
|
74,320
|
|
|
12.5
|
|
|
72,349
|
|
|
11.2
|
|
|
247,134
|
|
|
13.2
|
|
|
240,347
|
|
|
11.8
|
|
Boston
Proper
|
—
|
|
|
0.0
|
|
|
18,698
|
|
|
2.9
|
|
|
—
|
|
|
0.0
|
|
|
70,299
|
|
|
3.5
|
|
Total net
sales
|
596,912
|
|
|
100.0
|
|
|
645,433
|
|
|
100.0
|
|
|
1,875,621
|
|
|
100.0
|
|
|
2,029,025
|
|
|
100.0
|
|
Cost of goods
sold
|
366,618
|
|
|
61.4
|
|
|
396,270
|
|
|
61.4
|
|
|
1,142,182
|
|
|
60.9
|
|
|
1,219,543
|
|
|
60.1
|
|
Gross
margin
|
230,294
|
|
|
38.6
|
|
|
249,163
|
|
|
38.6
|
|
|
733,439
|
|
|
39.1
|
|
|
809,482
|
|
|
39.9
|
|
Selling, general and
administrative expenses
|
188,350
|
|
|
31.6
|
|
|
226,256
|
|
|
35.1
|
|
|
583,117
|
|
|
31.1
|
|
|
661,491
|
|
|
32.6
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
0.0
|
|
|
45,514
|
|
|
7.1
|
|
|
—
|
|
|
0.0
|
|
|
112,455
|
|
|
5.6
|
|
Restructuring and
strategic charges
|
10,820
|
|
|
1.8
|
|
|
3,137
|
|
|
0.4
|
|
|
31,027
|
|
|
1.6
|
|
|
34,178
|
|
|
1.6
|
|
Income (loss) from
operations
|
31,124
|
|
|
5.2
|
|
|
(25,744)
|
|
|
(4.0)
|
|
|
119,295
|
|
|
6.4
|
|
|
1,358
|
|
|
0.1
|
|
Interest expense,
net
|
(526)
|
|
|
(0.1)
|
|
|
(466)
|
|
|
(0.1)
|
|
|
(1,474)
|
|
|
(0.1)
|
|
|
(1,421)
|
|
|
(0.1)
|
|
Income (loss)
before income taxes
|
30,598
|
|
|
5.1
|
|
|
(26,210)
|
|
|
(4.1)
|
|
|
117,821
|
|
|
6.3
|
|
|
(63)
|
|
|
0.0
|
|
Income tax provision
(benefit)
|
7,000
|
|
|
1.1
|
|
|
(14,600)
|
|
|
(2.3)
|
|
|
40,100
|
|
|
2.2
|
|
|
(23,100)
|
|
|
(1.1)
|
|
Net income
(loss)
|
$
|
23,598
|
|
|
4.0
|
|
|
$
|
(11,610)
|
|
|
(1.8)
|
|
|
$
|
77,721
|
|
|
4.1
|
|
|
$
|
23,037
|
|
|
1.1
|
|
Per share
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share-basic
|
$
|
0.18
|
|
|
|
|
$
|
(0.09)
|
|
|
|
|
$
|
0.59
|
|
|
|
|
$
|
0.16
|
|
|
|
Net income (loss) per
common and common equivalent share–diluted
|
$
|
0.18
|
|
|
|
|
$
|
(0.09)
|
|
|
|
|
$
|
0.58
|
|
|
|
|
$
|
0.16
|
|
|
|
Weighted average
common shares outstanding–basic
|
128,753
|
|
|
|
|
136,172
|
|
|
|
|
129,830
|
|
|
|
|
139,386
|
|
|
|
Weighted average
common and common equivalent shares outstanding–diluted
|
128,996
|
|
|
|
|
136,172
|
|
|
|
|
129,999
|
|
|
|
|
139,724
|
|
|
|
Dividends declared
per share
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.2400
|
|
|
|
|
$
|
0.2325
|
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited)
(in
thousands)
|
|
|
|
|
|
|
October 29,
2016
|
|
January 30,
2016
|
|
October 31,
2015
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
80,331
|
|
|
$
|
89,951
|
|
|
$
|
91,256
|
|
Marketable
securities, at fair value
|
50,411
|
|
|
50,194
|
|
|
47,316
|
|
Inventories
|
261,341
|
|
|
233,834
|
|
|
268,968
|
|
Prepaid expenses and
other current assets
|
46,635
|
|
|
45,660
|
|
|
55,149
|
|
Income taxes
receivable
|
3,402
|
|
|
29,157
|
|
|
16,225
|
|
Assets held for
sale
|
18,520
|
|
|
16,525
|
|
|
41,802
|
|
Total Current
Assets
|
460,640
|
|
|
465,321
|
|
|
520,716
|
|
Property and
Equipment, net
|
495,587
|
|
|
550,953
|
|
|
556,172
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
96,774
|
|
|
96,774
|
|
|
96,774
|
|
Other intangible
assets, net
|
38,930
|
|
|
38,930
|
|
|
38,930
|
|
Other assets,
net
|
18,382
|
|
|
14,074
|
|
|
40,622
|
|
Total Other
Assets
|
154,086
|
|
|
149,778
|
|
|
176,326
|
|
|
|
$
|
1,110,313
|
|
|
$
|
1,166,052
|
|
|
$
|
1,253,214
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
125,532
|
|
|
$
|
129,343
|
|
|
$
|
147,526
|
|
Current
debt
|
10,000
|
|
|
10,000
|
|
|
10,000
|
|
Other current and
deferred liabilities
|
148,706
|
|
|
158,788
|
|
|
140,557
|
|
Liabilities held for
sale
|
—
|
|
|
—
|
|
|
8,478
|
|
Total Current
Liabilities
|
284,238
|
|
|
298,131
|
|
|
306,561
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
74,768
|
|
|
82,219
|
|
|
84,702
|
|
Deferred
liabilities
|
122,848
|
|
|
130,743
|
|
|
135,390
|
|
Deferred
taxes
|
9,320
|
|
|
15,171
|
|
|
20,385
|
|
Total Noncurrent
Liabilities
|
206,936
|
|
|
228,133
|
|
|
240,477
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,301
|
|
|
1,355
|
|
|
1,394
|
|
Additional paid-in
capital
|
445,787
|
|
|
435,881
|
|
|
429,746
|
|
Treasury stock, at
cost
|
(366,081)
|
|
|
(289,813)
|
|
|
(249,854)
|
|
Retained
earnings
|
538,134
|
|
|
492,325
|
|
|
524,244
|
|
Accumulated other
comprehensive (loss) income
|
(2)
|
|
|
40
|
|
|
646
|
|
Total
Stockholders' Equity
|
619,139
|
|
|
639,788
|
|
|
706,176
|
|
|
|
$
|
1,110,313
|
|
|
$
|
1,166,052
|
|
|
$
|
1,253,214
|
|
Chico's FAS, Inc.
and Subsidiaries
Condensed
Consolidated Cash Flow Statements
(Unaudited)
(in
thousands)
|
|
|
Thirty-Nine Weeks
Ended
|
|
October 29,
2016
|
|
October 31,
2015
|
Cash Flows From
Operating Activities:
|
|
|
|
Net income
|
$
|
77,721
|
|
|
$
|
23,037
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges, pre-tax
|
—
|
|
|
112,455
|
|
Depreciation and
amortization
|
82,585
|
|
|
90,266
|
|
Loss on disposal and
impairment of property and equipment
|
6,434
|
|
|
22,609
|
|
Deferred tax
benefit
|
(8,098)
|
|
|
(52,623)
|
|
Stock-based
compensation expense
|
15,483
|
|
|
20,712
|
|
Excess tax benefit
from stock-based compensation
|
(322)
|
|
|
(2,992)
|
|
Deferred rent and
lease credits
|
(14,264)
|
|
|
(15,018)
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(27,506)
|
|
|
(44,811)
|
|
Prepaid expenses and
accounts receivable
|
(6,237)
|
|
|
(12,024)
|
|
Income tax
receivable
|
25,755
|
|
|
(15,629)
|
|
Accounts
payable
|
(3,789)
|
|
|
7,377
|
|
Accrued and other
liabilities
|
(3,391)
|
|
|
(3,300)
|
|
Net cash provided by
operating activities
|
144,371
|
|
|
130,059
|
|
Cash Flows From
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(43,266)
|
|
|
(43,479)
|
|
Proceeds from sale of
marketable securities
|
43,058
|
|
|
122,712
|
|
Purchases of property
and equipment, net
|
(35,663)
|
|
|
(66,595)
|
|
Net cash (used in)
provided by investing activities
|
(35,871)
|
|
|
12,638
|
|
Cash Flows From
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
—
|
|
|
124,000
|
|
Payments on
borrowings
|
(7,500)
|
|
|
(29,000)
|
|
Proceeds from
issuance of common stock
|
2,363
|
|
|
10,614
|
|
Excess tax benefit
from stock-based compensation
|
322
|
|
|
2,992
|
|
Dividends
paid
|
(31,936)
|
|
|
(32,933)
|
|
Repurchase of common
stock
|
(81,324)
|
|
|
(260,555)
|
|
Net cash used in
financing activities
|
(118,075)
|
|
|
(184,882)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(45)
|
|
|
90
|
|
Net decrease in cash
and cash equivalents
|
(9,620)
|
|
|
(42,095)
|
|
Cash and Cash
Equivalents, Beginning of period
|
89,951
|
|
|
133,351
|
|
Cash and Cash
Equivalents, End of period
|
$
|
80,331
|
|
|
$
|
91,256
|
|
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 thirty-nine weeks ended October 29, 2016 and
October 31, 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
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 29,
2016
|
|
October 31,
2015
|
|
October 29,
2016
|
|
October 31,
2015
|
|
|
|
|
|
|
|
|
Numerator
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
23,598
|
|
$
|
(11,610)
|
|
|
$
|
77,721
|
|
|
$
|
23,037
|
|
Net income and
dividends declared allocated to participating securities
|
|
(502)
|
|
—
|
|
|
(1,677)
|
|
|
(492)
|
|
Net income (loss)
available to common shareholders
|
|
$
|
23,096
|
|
$
|
(11,610)
|
|
|
$
|
76,044
|
|
|
$
|
22,545
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
|
128,753
|
|
136,172
|
|
|
129,830
|
|
|
139,386
|
|
Dilutive effect of
non-participating securities
|
|
243
|
|
—
|
|
|
169
|
|
|
338
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
|
128,996
|
|
136,172
|
|
|
129,999
|
|
|
139,724
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share(1)
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.18
|
|
$
|
(0.09)
|
|
|
$
|
0.59
|
|
|
$
|
0.16
|
|
Diluted
|
|
$
|
0.18
|
|
$
|
(0.09)
|
|
|
$
|
0.58
|
|
|
$
|
0.16
|
|
(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 charges and results related
to non-continuing Boston Proper operations as well as certain
strategic 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 adjusted basis is presented in the table below:
Chico's FAS, Inc.
and Subsidiaries
|
GAAP to Non-GAAP
Reconciliation of Net Income (Loss) and Diluted EPS
|
(Unaudited)
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
|
October 29,
2016
|
|
October 31,
2015
|
|
October 29,
2016
|
|
October 31,
2015
|
Net income (loss):
(1)
|
|
|
|
|
|
|
|
GAAP
basis
|
|
$
|
23,598
|
|
|
$
|
(11,610)
|
|
|
$
|
77,721
|
|
|
$
|
23,037
|
|
Goodwill and other
intangible impairment charges
|
|
—
|
|
|
23,859
|
|
|
—
|
|
|
70,985
|
|
Restructuring and
strategic charges
|
|
6,806
|
|
|
1,948
|
|
|
19,422
|
|
|
21,225
|
|
Boston Proper
operating loss
|
|
—
|
|
|
3,502
|
|
|
—
|
|
|
8,239
|
|
Tax benefit related
to the disposition of Boston Proper
|
|
(3,979)
|
|
|
—
|
|
|
(3,979)
|
|
|
(23,779)
|
|
Non-GAAP adjusted
basis
|
|
$
|
26,425
|
|
|
$
|
17,699
|
|
|
$
|
93,164
|
|
|
$
|
99,707
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per diluted share: (1) (2)
|
|
|
|
|
|
|
|
|
GAAP
basis
|
|
$
|
0.18
|
|
|
$
|
(0.09)
|
|
|
$
|
0.58
|
|
|
$
|
0.16
|
|
Goodwill and other
intangible impairment charges
|
|
0.00
|
|
|
0.18
|
|
|
0.00
|
|
|
0.50
|
|
Restructuring and
strategic charges
|
|
0.05
|
|
|
0.01
|
|
|
0.15
|
|
|
0.15
|
|
Boston Proper
operating loss
|
|
0.00
|
|
|
0.03
|
|
|
0.00
|
|
|
0.06
|
|
Tax benefit related
to the disposition of Boston Proper
|
|
(0.03)
|
|
|
0.00
|
|
|
(0.03)
|
|
|
(0.17)
|
|
Non-GAAP adjusted
basis
|
|
$
|
0.20
|
|
|
$
|
0.13
|
|
|
$
|
0.70
|
|
|
$
|
0.70
|
|
(1) All adjustments to net income (loss) 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
Boston Proper 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
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2015
|
|
October 31,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
641,219
|
|
100.0
|
|
|
$
|
2,014,909
|
|
|
100.0
|
|
Cost of goods
sold
|
290,737
|
|
45.3
|
|
|
902,689
|
|
|
44.8
|
|
Gross
margin
|
350,482
|
|
54.7
|
|
|
1,112,220
|
|
|
55.2
|
|
Selling, general and
administrative expenses
|
327,575
|
|
51.1
|
|
|
964,229
|
|
|
47.9
|
|
Subtotal
|
22,907
|
|
3.6
|
|
|
147,991
|
|
|
7.3
|
|
|
Boston
Proper
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2015
|
|
October 31,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
17,312
|
|
|
100.0
|
|
|
$
|
65,301
|
|
|
100.0
|
|
Cost of goods
sold
|
11,486
|
|
|
66.3
|
|
|
38,073
|
|
|
58.3
|
|
Gross
margin
|
5,826
|
|
|
33.7
|
|
|
27,228
|
|
|
41.7
|
|
Selling, general and
administrative expenses
|
11,466
|
|
|
66.2
|
|
|
40,495
|
|
|
62.0
|
|
Subtotal
|
(5,640)
|
|
|
(32.5)
|
|
|
(13,267)
|
|
|
(20.3)
|
|
|
Adjustments,
excluding Boston Proper
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2015
|
|
October 31,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales(1)
|
$
|
2,828
|
|
|
0.4
|
|
|
$
|
9,118
|
|
|
0.5
|
|
Store occupancy
expense(2)
|
95,583
|
|
|
14.8
|
|
|
284,141
|
|
|
14.1
|
|
Shipping
expense(3)
|
7,710
|
|
|
1.2
|
|
|
23,504
|
|
|
1.2
|
|
Cost of goods
sold
|
103,293
|
|
|
16.0
|
|
|
307,645
|
|
|
15.3
|
|
Gross
margin
|
(100,465)
|
|
|
(15.6)
|
|
|
(298,527)
|
|
|
(14.8)
|
|
Selling, general and
administrative expenses
|
(100,465)
|
|
|
(15.6)
|
|
|
(298,527)
|
|
|
(14.8)
|
|
Subtotal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
As Adjusted,
Non-GAAP
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
October 31,
2015
|
|
October 31,
2015
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net Sales
|
$
|
626,735
|
|
|
100.0
|
|
|
$
|
1,958,726
|
|
|
100.0
|
|
Cost of goods
sold
|
382,544
|
|
|
61.0
|
|
|
1,172,261
|
|
|
59.8
|
|
Gross
margin
|
244,191
|
|
|
39.0
|
|
|
786,465
|
|
|
40.2
|
|
Selling, general and
administrative expenses
|
215,644
|
|
|
34.4
|
|
|
625,207
|
|
|
31.9
|
|
Subtotal
|
28,547
|
|
|
4.6
|
|
|
161,258
|
|
|
8.3
|
|
|
|
|
|
|
|
|
|
(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
October 29, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
July 30,
2016
|
|
New Stores
|
|
Closures
|
|
October 29,
2016
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
599
|
|
1
|
|
(6)
|
|
594
|
|
|
Chico's
outlets
|
117
|
|
—
|
|
—
|
|
117
|
|
|
Chico's
Canada
|
4
|
|
—
|
|
—
|
|
4
|
|
|
WHBM frontline
boutiques
|
427
|
|
—
|
|
(2)
|
|
425
|
|
|
WHBM
outlets
|
71
|
|
—
|
|
—
|
|
71
|
|
|
WHBM
Canada
|
6
|
|
—
|
|
—
|
|
6
|
|
|
Soma frontline
boutiques
|
274
|
|
—
|
|
—
|
|
274
|
|
|
Soma
outlets
|
19
|
|
—
|
|
—
|
|
19
|
|
|
Total Chico's FAS,
Inc.
|
1,517
|
|
1
|
|
(8)
|
|
1,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 30,
2016
|
|
New Stores
|
|
Closures
|
|
Other
changes in
SSF
|
|
October 29,
2016
|
Net selling square
footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,638,071
|
|
2,444
|
|
(16,562)
|
|
279
|
|
1,624,232
|
Chico's
outlets
|
293,646
|
|
—
|
|
—
|
|
—
|
|
293,646
|
Chico's
Canada
|
9,695
|
|
—
|
|
—
|
|
—
|
|
9,695
|
WHBM frontline
boutiques
|
993,320
|
|
—
|
|
(3,247)
|
|
196
|
|
990,269
|
WHBM
outlets
|
148,457
|
|
—
|
|
—
|
|
—
|
|
148,457
|
WHBM
Canada
|
14,891
|
|
—
|
|
—
|
|
—
|
|
14,891
|
Soma frontline
boutiques
|
517,994
|
|
—
|
|
—
|
|
—
|
|
517,994
|
Soma
outlets
|
35,637
|
|
—
|
|
—
|
|
—
|
|
35,637
|
Total Chico's FAS,
Inc.
|
3,651,711
|
|
2,444
|
|
(19,809)
|
|
475
|
|
3,634,821
|
As of October 29, 2016 the Company
also sold merchandise through 88 international franchise locations,
comprised of 7 Chico's stand-alone boutiques, 50 Chico's
shop-in-shops, and 31 Soma shop-in-shops.
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirty-Nine Weeks
Ended October 29, 2016
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2016
|
|
New Stores
|
|
Closures
|
|
October 29,
2016
|
|
|
Store
count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
604
|
|
3
|
|
(13)
|
|
594
|
|
|
Chico's
outlets
|
117
|
|
—
|
|
—
|
|
117
|
|
|
Chico's
Canada
|
4
|
|
—
|
|
—
|
|
4
|
|
|
WHBM frontline
boutiques
|
429
|
|
3
|
|
(7)
|
|
425
|
|
|
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
|
|
13
|
|
(21)
|
|
1,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2016
|
|
New Stores
|
|
Closures
|
|
Other
changes in
SSF
|
|
October 29,
2016
|
Net selling square
footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,652,991
|
|
7,556
|
|
(35,960)
|
|
(355)
|
|
1,624,232
|
Chico's
outlets
|
293,646
|
|
—
|
|
—
|
|
—
|
|
293,646
|
Chico's
Canada
|
9,695
|
|
—
|
|
—
|
|
—
|
|
9,695
|
WHBM frontline
boutiques
|
991,164
|
|
6,921
|
|
(13,547)
|
|
5,731
|
|
990,269
|
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
|
|
27,330
|
|
(51,069)
|
|
6,119
|
|
3,634,821
|
As of October 29, 2016 the Company
also sold merchandise through 88 international franchise locations,
comprised of 7 Chico's stand-alone boutiques, 50 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-third-quarter-results-300366939.html
SOURCE Chico's FAS, Inc.