FORT MYERS, Fla., Nov. 28,
2018 /PRNewswire/ --
- Reports third quarter EPS of $0.05 per diluted share
- Maintains strong cash position
- Updates full-year outlook
Chico's FAS, Inc. (NYSE: CHS) (the "Company") today announced
its financial results for the fiscal 2018 third quarter ended
November 3, 2018.
For the thirteen weeks ended November 3, 2018 (the "third
quarter"), the Company reported net income of $6.5 million, or $0.05 per diluted share, compared to net income
of $16.7 million, or $0.13 per diluted share, for the thirteen weeks
ended October 28, 2017 ("last year's third quarter").
For the thirty-nine weeks ended November 3, 2018, the
Company reported net income of $52.3
million, or $0.41 per diluted
share, compared to net income of $73.0
million, or $0.57 per diluted
share, for the thirty-nine weeks ended October 28, 2017.
Results for the thirteen and thirty-nine weeks ended
November 3, 2018 include a favorable tax benefit of
approximately $4.9 million, or
$0.04 per diluted share, related to
the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). Results for the
thirteen and thirty-nine weeks ended October 28, 2017 include
the unfavorable impact of hurricanes Harvey, Irma and Maria
(collectively, the "Hurricanes") of approximately $5.0 million after-tax, or $0.04 per diluted share.
"Brand performance in the third quarter was mixed," said
Shelley Broader, CEO and President
of the Company. "Soma again performed well and better than
expectations, and White House Black Market is continuing its brand
repositioning. However, our Chico's brand did not deliver the sales
we anticipated, which led to total Company results that were below
expectations."
Ms. Broader continued, "The initial emphasis that we selected
for our Chico's brand repositioning has not resonated with our
broader target customer base. So, we are course correcting by
implementing a performance improvement plan that includes brand
leadership changes and adjustments to our product offering,
marketing strategy and assortment architecture to better meet
expectations for all customers who shop the Chico's brand. Our
attention is keenly focused on establishing a record of consistent
top line growth across all three of our brands."
Chico's Brand Performance Improvement Plan
Following the Chico's brand refresh in February 2018, merchandise and marketing were
heavily weighted to boho styles, bold colors and original artisanal
prints. The Company has determined that this shift was successful
in attracting new customers and in reactivating some customers who
aspired to the brand's heritage. However, there was not enough
depth in clean, classic polished silhouettes or in basics and top
key items to appeal to the brand's more polished and traditional
customers.
Accordingly, the Company has implemented the following actions
to improve performance at the Chico's brand:
- Initiated a leadership transition for the Chico's brand. As
separately announced today, Diane
Ellis is departing as the Chico's brand president, effective
November 30, 2018. The Company has
initiated a search to identify a new Chico's brand president. In
the interim, the Chico's brand will be led by Ms. Broader.
- Adjusted the spring assortments to appropriately balance its
merchandise architecture, reducing planned receipts and chasing
more classic merchandise that is performing well.
- Repositioned marketing touchpoints to be more inclusive of all
customers by adjusting in-store merchandising and display, print
and digital media to feature more clean, classic silhouettes along
with boho artisanal styling.
- Adjusted planning and allocation strategies to improve in-stock
and stronger penetration in basics and top key items.
Other Third Quarter Business Highlights
- Soma reported positive comparable sales of 2.4%. This
better-than-expected performance was primarily driven by the
ongoing success of the Enbliss™ collection and Cool
Nights™ sleepwear. October was the brand's fifth
consecutive month of positive comparable sales.
- White House Black Market is continuing with its brand
repositioning. Merchandise margins improved significantly, driven
by better full-price selling compared to last year's third
quarter.
- The Company's Endless Aisle, or shared inventory system, has
been connected to all stores enabling customers to purchase online
and ship from store, and is exceeding management's
expectations.
- The Company continued to advance its omni-channel capabilities
with the launch of Client Book, an enhanced platform that provides
digitized clienteling tools to store associates to personalize the
customer experience. With Client Book, store associates now offer
customers personalized online store fronts of curated product based
on their attributes and prior purchase behavior, as well as the
opportunity to work online with a personal stylist. Full rollout to
all stores is expected in the first quarter of fiscal 2019.
Net Sales
For the third quarter, net sales were $499.9 million compared to $532.3 million in last year's third quarter, a
decrease of 6.1%. Excluding the 1.6%, or $9.1 million, impact of the Hurricanes from last
year's third quarter, sales decreased 7.7% in the third quarter,
which primarily reflects a comparable sales decline of 6.8% as well
as the impact of 43 net store closures since last year's third
quarter. The comparable sales decline was driven by a decrease in
transaction count and lower average dollar sale.
Comparable Sales
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
November 3, 2018
(1)
|
|
October 28,
2017
|
|
November 3, 2018
(1)
|
|
October 28,
2017
|
Chico's
|
(10.2)%
|
|
(5.8)%
|
|
(6.4)%
|
|
(8.3)%
|
White House Black
Market
|
(5.1)%
|
|
(14.1)%
|
|
(5.1)%
|
|
(11.5)%
|
Soma
|
2.4%
|
|
(1.7)%
|
|
(1.6)%
|
|
(1.1)%
|
Total
Company
|
(6.8)%
|
|
(8.2)%
|
|
(5.3)%
|
|
(8.4)%
|
|
(1) Comparable sales for the
thirteen and thirty-nine weeks ended have been adjusted to
eliminate the impact of the calendar shift due to the 53rd week in
fiscal 2017. Fiscal 2018 comparable sales represent sales for the
thirteen and thirty-nine weeks ended November 3, 2018 compared to
sales for the thirteen and thirty-nine weeks ended November 4,
2017.
|
Gross Margin
For the third quarter, gross margin was $181.0 million, or 36.2% of net sales, compared
to $196.7 million, or 37.0% of net
sales, in last year's third quarter. This 80 basis point decrease
was primarily driven by an improvement in maintained margin that
was more than offset by costs related to the continued expansion of
our omni-channel programs.
Selling, General and Administrative Expenses
For the third quarter, selling, general and administrative
("SG&A") expenses were $178.4
million, or 35.7% of net sales, compared to $171.4 million, or 32.3% of net sales, for last
year's third quarter. This increase of $7.0
million, or 340 basis points, primarily reflects investments
in marketing as well as contract termination and legal costs.
Income Tax Expense
For the third quarter, the $3.8
million income tax benefit resulted in an effective tax rate
of (141.7)% compared to 32.9% for last year's
third quarter. The reduction in the effective tax rate for
the third quarter was primarily due to the acceleration
of income tax deductions into the 2017 federal income tax return as
a result of the Tax Act.
Cash, Marketable Securities and Debt
At the end of the third quarter, cash and marketable securities
totaled $228.9 million, an increase
of $42.8 million compared to last
year's third quarter, while debt totaled $61.3 million, a decrease of $11.1 million from last year's third quarter.
This $42.8 million increase in cash
and marketable securities primarily reflects cash generated from
operating activities, partially offset by cash utilized for capital
expenditures, return of cash to shareholders and debt payments.
Inventories
At the end of the third quarter, inventories totaled
$266.1 million compared to
$265.0 million at the end of last
year's third quarter. This $1.1
million, or 0.4%, increase primarily reflects the timing of
product liquidations through a third party.
Fiscal 2018 Fourth Quarter and Full-Year Outlook
The Company expects to see some immediate benefit from its
Chico's brand performance improvement actions in the fiscal 2018
fourth quarter. Given the timing of adjustments that are now being
made, the Company expects it to be spring of fiscal 2019 before
meaningful improvement in the Chico's brand performance is visible
in the Company's results.
For the fiscal 2018 fourth quarter, the Company anticipates a
mid-teen decline in net sales, which includes the negative impact
of the 53rd week of $29
million in fiscal 2017, and a high single-digit decline in
consolidated comparable sales.
The Company anticipates gross margin rate as a percent of net
sales to decline approximately 400 to 500 basis points in the
fiscal 2018 fourth quarter compared to the fiscal 2017 fourth
quarter, primarily driven by our omni-channel programs and
deleverage of fixed costs from lower sales. The Company also
expects SG&A expenses to decrease approximately $10 million to $15
million compared to the prior year period, primarily due to
the 53rd week in fiscal 2017.
For full-year fiscal 2018, the Company anticipates a high
single-digit decline in net sales and a mid single-digit decline in
consolidated comparable sales. The Company expects gross margin
rate as a percent of net sales to decline approximately 120
to 140 basis points over fiscal 2017. The Company also expects
SG&A expenses to be approximately flat compared to fiscal
2017.
The Company anticipates capital expenditures to be $50 million to $60
million, primarily driven by store reinvestments and
technology enhancements. Inventory is expected to increase compared
to the prior year period as a result of the timing of the Chinese
New Year and stronger penetration in basics and top key items. The
Company estimates a fiscal 2018 tax rate in the range of 20% to
25%.
Conference Call Information
The Company is hosting a live conference call on Wednesday,
November 28, 2018 beginning at 8:30
a.m. EST 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
Chico's FAS, Inc. 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, 4706952, is required to
join the conference call. Interested participants should call 10-15
minutes prior to the 8:30 a.m. start
to be placed in queue.
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 and complementary accessories.
As of November 3, 2018, the Company operated 1,431 stores
in the U.S. and Canada and sold
merchandise through 83 international franchise locations in
Mexico. The Company's merchandise
is also available at www.chicos.com, www.chicosofftherack.com,
www.whbm.com and www.soma.com as well as through third party
channels. For more detailed information on the Company, please go
to our corporate website at 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 "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. These statements, including without limitation
statements made in Ms. Broader's quotes and in the section entitled
"Chico's Brand Performance Improvement Plan" and "Fiscal 2018
Fourth Quarter and Full-Year Outlook," relate to expectations
concerning matters that are not historical fact and may include the
words or phrases such as "will," "should," "expects," "believes,"
"anticipates," "plans," "intends," "estimates," "approximately,"
"our planning assumptions," "future outlook," and similar
expressions. Except for historical information, matters discussed
in such 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, changes in the general
economic and business environment, including the expected impact of
U.S. tax reform; changes in the general or specialty retail or
apparel industries; the availability of quality store sites; the
ability to successfully execute and achieve the expected results of
our business strategies and particular strategic initiatives, sales
initiatives and multi-channel strategies, including the Chico's
Brand Performance Improvement Plan; customer traffic; our ability
to appropriately manage our inventory and allocation processes; our
ability to leverage inventory management and targeted promotions;
the successful leadership transition for the Chico's brand and
successful integration of the new members of our senior management
team; changes in the political environment that create consumer
uncertainty; 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 (particularly with
respect to China) that could
impact, among other things, our sourcing from foreign suppliers;
significant shifts in consumer behavior; 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
latest annual report on Form 10-K and in Part II, Item 1A, "Risk
Factors" and the "Forward-Looking Statements" disclosure in Part I,
Item 2. "Management's Discussion and Analysis of Financial
Condition and Results of Operation" of our quarterly reports on
Form 10-Q and in other reports we file with or furnish to the
Securities and Exchange Commission. There can be no assurance that
the actual future results, performance, or achievements expressed
or implied by such forward-looking statements will occur. All
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:
Julie
Lorigan
Vice President – Investor Relations,
Public Relations and Corporate Communications
Chico's FAS, Inc.
(239) 346-4199
Chico's FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239)
277-6200
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Income
|
(Unaudited)
|
(in thousands,
except per share amounts)
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chico's
|
$
|
259,503
|
|
|
51.9
|
%
|
|
$
|
284,560
|
|
|
53.5
|
%
|
|
$
|
847,247
|
|
|
52.8
|
%
|
|
$
|
896,904
|
|
|
53.0
|
%
|
White House Black
Market
|
167,805
|
|
|
33.6
|
|
|
175,265
|
|
|
32.9
|
|
|
519,391
|
|
|
32.3
|
|
|
552,993
|
|
|
32.6
|
|
Soma
|
72,569
|
|
|
14.5
|
|
|
72,462
|
|
|
13.6
|
|
|
239,774
|
|
|
14.9
|
|
|
244,699
|
|
|
14.4
|
|
Total Net
Sales
|
499,877
|
|
|
100.0
|
|
|
532,287
|
|
|
100.0
|
|
|
1,606,412
|
|
|
100.0
|
|
|
1,694,596
|
|
|
100.0
|
|
Cost of goods
sold
|
318,899
|
|
|
63.8
|
|
|
335,585
|
|
|
63.0
|
|
|
1,001,699
|
|
|
62.4
|
|
|
1,051,380
|
|
|
62.0
|
|
Gross
Margin
|
180,978
|
|
|
36.2
|
|
|
196,702
|
|
|
37.0
|
|
|
604,713
|
|
|
37.6
|
|
|
643,216
|
|
|
38.0
|
|
Selling, general and
administrative expenses
|
178,394
|
|
|
35.7
|
|
|
171,424
|
|
|
32.3
|
|
|
538,902
|
|
|
33.5
|
|
|
527,605
|
|
|
31.2
|
|
Income from
Operations
|
2,584
|
|
|
0.5
|
|
|
25,278
|
|
|
4.7
|
|
|
65,811
|
|
|
4.1
|
|
|
115,611
|
|
|
6.8
|
|
Interest income
(expense), net
|
97
|
|
|
0.0
|
|
|
(388)
|
|
|
0.0
|
|
|
(458)
|
|
|
0.0
|
|
|
(1,286)
|
|
|
(0.1)
|
|
Income before
Income Taxes
|
2,681
|
|
|
0.5
|
|
|
24,890
|
|
|
4.7
|
|
|
65,353
|
|
|
4.1
|
|
|
114,325
|
|
|
6.7
|
|
Income tax (benefit)
provision
|
(3,800)
|
|
|
(0.8)
|
|
|
8,200
|
|
|
1.6
|
|
|
13,100
|
|
|
0.8
|
|
|
41,300
|
|
|
2.4
|
|
Net
Income
|
$
|
6,481
|
|
|
1.3
|
%
|
|
$
|
16,690
|
|
|
3.1
|
%
|
|
$
|
52,253
|
|
|
3.3
|
%
|
|
$
|
73,025
|
|
|
4.3
|
%
|
Per Share
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share-basic
|
$
|
0.05
|
|
|
|
|
$
|
0.13
|
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
0.57
|
|
|
|
Net income per common
and common equivalent share–diluted
|
$
|
0.05
|
|
|
|
|
$
|
0.13
|
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
0.57
|
|
|
|
Weighted average
common shares outstanding–basic
|
122,201
|
|
|
|
|
124,957
|
|
|
|
|
124,069
|
|
|
|
|
125,550
|
|
|
|
Weighted average
common and common equivalent shares outstanding–diluted
|
122,273
|
|
|
|
|
124,989
|
|
|
|
|
124,120
|
|
|
|
|
125,591
|
|
|
|
Dividends declared
per share
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.2550
|
|
|
|
|
$
|
0.2475
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
November 3,
2018
|
|
February 3,
2018
|
|
October 28,
2017
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
169,380
|
|
|
$
|
160,071
|
|
|
$
|
125,646
|
|
Marketable
securities, at fair value
|
59,484
|
|
|
60,060
|
|
|
60,411
|
|
Inventories
|
266,100
|
|
|
233,726
|
|
|
265,023
|
|
Prepaid expenses and
other current assets
|
62,167
|
|
|
60,668
|
|
|
48,876
|
|
Total Current
Assets
|
557,131
|
|
|
514,525
|
|
|
499,956
|
|
Property and
Equipment, net
|
385,387
|
|
|
421,038
|
|
|
424,961
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
96,774
|
|
|
96,774
|
|
|
96,774
|
|
Other intangible
assets, net
|
38,930
|
|
|
38,930
|
|
|
38,930
|
|
Other assets,
net
|
13,929
|
|
|
16,338
|
|
|
16,581
|
|
Total Other
Assets
|
149,633
|
|
|
152,042
|
|
|
152,285
|
|
|
$
|
1,092,151
|
|
|
$
|
1,087,605
|
|
|
$
|
1,077,202
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
150,224
|
|
|
$
|
118,253
|
|
|
$
|
135,004
|
|
Current
debt
|
—
|
|
|
15,000
|
|
|
15,000
|
|
Other current and
deferred liabilities
|
126,337
|
|
|
133,715
|
|
|
118,495
|
|
Total Current
Liabilities
|
276,561
|
|
|
266,968
|
|
|
268,499
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
61,250
|
|
|
53,601
|
|
|
57,335
|
|
Other noncurrent and
deferred liabilities
|
93,323
|
|
|
103,282
|
|
|
108,000
|
|
Deferred
taxes
|
7,884
|
|
|
7,372
|
|
|
7,961
|
|
Total Noncurrent
Liabilities
|
162,457
|
|
|
164,255
|
|
|
173,296
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,257
|
|
|
1,275
|
|
|
1,278
|
|
Additional paid-in
capital
|
482,340
|
|
|
468,806
|
|
|
463,502
|
|
Treasury stock, at
cost
|
(444,309)
|
|
|
(413,465)
|
|
|
(411,766)
|
|
Retained
earnings
|
614,349
|
|
|
599,810
|
|
|
582,387
|
|
Accumulated other
comprehensive (loss) income
|
(504)
|
|
|
(44)
|
|
|
6
|
|
Total
Shareholders' Equity
|
653,133
|
|
|
656,382
|
|
|
635,407
|
|
|
$
|
1,092,151
|
|
|
$
|
1,087,605
|
|
|
$
|
1,077,202
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
Thirty-Nine Weeks
Ended
|
|
November 3,
2018
|
|
October 28,
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
|
52,253
|
|
|
$
|
73,025
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
69,290
|
|
|
73,968
|
|
Loss on disposal and
impairment of property and equipment
|
3,592
|
|
|
5,204
|
|
Deferred income
taxes
|
1,195
|
|
|
(1,483)
|
|
Share-based
compensation expense
|
15,523
|
|
|
14,739
|
|
Deferred rent and
lease credits
|
(14,868)
|
|
|
(14,684)
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(33,198)
|
|
|
(32,660)
|
|
Prepaid expenses and
other assets
|
(190)
|
|
|
5,556
|
|
Accounts
payable
|
31,947
|
|
|
18,758
|
|
Accrued and other
liabilities
|
(6,780)
|
|
|
(47,598)
|
|
Net cash provided by
operating activities
|
118,764
|
|
|
94,825
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(31,300)
|
|
|
(29,097)
|
|
Proceeds from sale of
marketable securities
|
31,946
|
|
|
19,056
|
|
Purchases of property
and equipment
|
(36,601)
|
|
|
(27,128)
|
|
Net cash used in
investing activities
|
(35,955)
|
|
|
(37,169)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
61,250
|
|
|
—
|
|
Payments on
borrowings
|
(68,750)
|
|
|
(12,500)
|
|
Proceeds from
issuance of common stock
|
1,448
|
|
|
2,058
|
|
Dividends
paid
|
(32,674)
|
|
|
(32,021)
|
|
Repurchase of common
stock
|
(30,879)
|
|
|
(25,697)
|
|
Payments of tax
withholdings related to share-based awards
|
(3,420)
|
|
|
(6,034)
|
|
Net cash used in
financing activities
|
(73,025)
|
|
|
(74,194)
|
|
|
|
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(475)
|
|
|
49
|
|
Net increase
(decrease) in cash and cash equivalents
|
9,309
|
|
|
(16,489)
|
|
Cash and Cash
Equivalents, Beginning of period
|
160,071
|
|
|
142,135
|
|
Cash and Cash
Equivalents, End of period
|
$
|
169,380
|
|
|
$
|
125,646
|
|
Supplemental
Detail on Net Income 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 comprised entirely of
unvested restricted stock awards and performance-based restricted
stock units ("PSUs") that have met their relevant performance
criteria.
|
|
Net income per share
is determined using the two-class method when it is more dilutive
than the treasury stock method. Basic net income per share is
computed by dividing net income available to common shareholders by
the weighted-average number of common shares outstanding during the
period, including participating securities. Diluted net income per
share reflects the dilutive effect of potential common shares from
non-participating securities such as stock options, PSUs and
restricted stock units. For the thirteen and thirty-nine weeks
ended November 3, 2018 and October 28, 2017, 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 net
income per share shown on the face of the accompanying condensed
consolidated statements of income (in thousands, except per share
amounts):
|
|
|
Thirteen Weeks
Ended
|
|
Thirty-Nine Weeks
Ended
|
|
November 3,
2018
|
|
October 28,
2017
|
|
November 3,
2018
|
|
October 28,
2017
|
Numerator
|
|
|
|
|
|
|
|
Net income
|
$
|
6,481
|
|
|
$
|
16,690
|
|
|
$
|
52,253
|
|
|
$
|
73,025
|
|
Net income and
dividends declared allocated to participating securities
|
(182)
|
|
|
(394)
|
|
|
(1,365)
|
|
|
(1,683)
|
|
Net income available
to common shareholders
|
$
|
6,299
|
|
|
$
|
16,296
|
|
|
$
|
50,888
|
|
|
$
|
71,342
|
|
|
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
122,201
|
|
|
124,957
|
|
|
124,069
|
|
|
125,550
|
|
Dilutive effect of
non-participating securities
|
72
|
|
|
32
|
|
|
51
|
|
|
41
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
122,273
|
|
|
124,989
|
|
|
124,120
|
|
|
125,591
|
|
|
|
|
|
|
|
|
|
Net Income per
Share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.41
|
|
|
$
|
0.57
|
|
Diluted
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.41
|
|
|
$
|
0.57
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
November 3, 2018
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
August 4,
2018
|
|
New
Stores
|
|
Closures
|
|
November 3,
2018
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
561
|
|
|
—
|
|
|
(6)
|
|
|
555
|
|
|
|
Chico's
outlets
|
120
|
|
|
4
|
|
|
—
|
|
|
124
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
WHBM frontline
boutiques
|
398
|
|
|
—
|
|
|
(4)
|
|
|
394
|
|
|
|
WHBM
outlets
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
265
|
|
|
—
|
|
|
(3)
|
|
|
262
|
|
|
|
Soma
outlets
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
Total Chico's FAS,
Inc.
|
1,440
|
|
|
4
|
|
|
(13)
|
|
|
1,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August 4,
2018
|
|
New
Stores
|
|
Closures
|
|
Other
Changes in
SSF
|
|
November 3,
2018
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,529,237
|
|
|
—
|
|
|
(16,137)
|
|
|
(1,439)
|
|
|
1,511,661
|
|
Chico's
outlets
|
302,325
|
|
|
10,795
|
|
|
|
|
344
|
|
|
313,464
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WHBM frontline
boutiques
|
927,327
|
|
|
—
|
|
|
(9,282)
|
|
|
—
|
|
|
918,045
|
|
WHBM
outlets
|
140,349
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|
140,678
|
|
WHBM
Canada
|
14,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
502,480
|
|
|
—
|
|
|
(6,237)
|
|
|
30
|
|
|
496,273
|
|
Soma
outlets
|
35,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,774
|
|
Total Chico's FAS,
Inc.
|
3,462,078
|
|
|
10,795
|
|
|
(31,656)
|
|
|
(736)
|
|
|
3,440,481
|
|
|
As of
November 3, 2018, the Company also sold merchandise through 83
international franchise locations in Mexico.
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirty-Nine Weeks
Ended November 3, 2018
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
February 3,
2018
|
|
New
Stores
|
|
Closures
|
|
November 3,
2018
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
568
|
|
|
—
|
|
|
(13)
|
|
|
555
|
|
|
|
Chico's
outlets
|
120
|
|
|
4
|
|
|
—
|
|
|
124
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
WHBM frontline
boutiques
|
404
|
|
|
—
|
|
|
(10)
|
|
|
394
|
|
|
|
WHBM
outlets
|
69
|
|
|
—
|
|
|
(2)
|
|
|
67
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
270
|
|
|
—
|
|
|
(8)
|
|
|
262
|
|
|
|
Soma
outlets
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
Total Chico's FAS,
Inc.
|
1,460
|
|
|
4
|
|
|
(33)
|
|
|
1,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 3,
2018
|
|
New
Stores
|
|
Closures
|
|
Other
Changes in
SSF
|
|
November 3,
2018
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,555,671
|
|
|
—
|
|
|
(36,041)
|
|
|
(7,969)
|
|
|
1,511,661
|
|
Chico's
outlets
|
302,088
|
|
|
10,795
|
|
|
—
|
|
|
581
|
|
|
313,464
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WHBM frontline
boutiques
|
939,606
|
|
|
—
|
|
|
(22,231)
|
|
|
670
|
|
|
918,045
|
|
WHBM
outlets
|
143,963
|
|
|
—
|
|
|
(3,614)
|
|
|
329
|
|
|
140,678
|
|
WHBM
Canada
|
14,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
511,989
|
|
|
—
|
|
|
(15,746)
|
|
|
30
|
|
|
496,273
|
|
Soma
outlets
|
35,541
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|
35,774
|
|
Total Chico's FAS,
Inc.
|
3,513,444
|
|
|
10,795
|
|
|
(77,632)
|
|
|
(6,126)
|
|
|
3,440,481
|
|
|
As of
November 3, 2018, the Company also sold merchandise through 83
international franchise locations in Mexico.
|
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SOURCE Chico's FAS, Inc.