FORT MYERS, Fla., June 11, 2019 /PRNewswire/ -- Chico's FAS,
Inc. (NYSE: CHS) (the "Company") today announced its financial
results for the fiscal 2019 first quarter ended May 4,
2019.
For the thirteen weeks ended May 4, 2019 (the "first
quarter"), the Company reported net income of $2.0 million, or $0.02 per diluted share, compared to net income
of $29.0 million, or $0.23 per diluted share, for the thirteen weeks
ended May 5, 2018 ("last year's first quarter"). The Company
reported first quarter adjusted net income of $5.6 million, or $0.05 per diluted share, as presented in the
related accompanying GAAP to non-GAAP reconciliation.
"In the first quarter, we made significant changes to the
Company's leadership and reset priorities for its growth and value
creation," commented Bonnie Brooks,
interim CEO and President of the Company. "Actions are now underway
across all brands with a focus on three distinct areas that will
positively impact our results. These include driving stronger sales
through improved product and marketing; optimizing the customer
journey by simplifying, digitizing and extending our unique and
personalized service; and transforming our sourcing and supply
chain operations to increase product speed to market and improve
quality. Having led successful turnarounds at other major apparel
retailers, I am confident that our action steps on the path forward
are the ones needed to deliver our plans."
Business Highlights
- Chico's first quarter results stabilized in line with the
fourth quarter 2018. The brand is making progress in elevating the
product aesthetic and delivering a more balanced merchandise
architecture to its customers.
- Soma reported positive 3.4% comparable sales in the first
quarter, driven by bras and sleepwear. The Company's latest
EnblissTM collection is performing particularly well and
is on track to be the #1 franchise in Soma's portfolio.
- White House Black Market reported a greater than expected
comparable sales decline, driven by misses in color and print.
Steps to course correct have been implemented, including
adjustments for fall and holiday product offerings.
- The Company completed the rollout of StyleConnect™, an enhanced
platform that provides digitized clienteling tools to all stores
and remains on track to launch Buy Online Pick-up in Store (BOPIS)
across its fleet this summer.
- The Company is making progress on its previously announced
search for a permanent CEO. The Board's search committee has met
with a number of exceptionally qualified candidates and is pleased
with the quality of the apparel executives with merchandising
experience that it is seeing.
Net Sales
For the first quarter, net sales were $517.7 million compared to $561.8 million in last year's first quarter. This
decrease of 7.8% reflects a comparable sales decline of 7.0% as
well as the impact of 41 net store closures since last year's first
quarter. The comparable sales decline was driven by lower average
dollar sale and a decrease in transaction count.
Comparable Sales
|
|
Thirteen Weeks
Ended
|
|
|
May 4,
2019
|
|
May 5,
2018
|
Chico's
|
|
(7.8)
|
%
|
|
(5.5)
|
%
|
White House Black
Market
|
|
(10.0)
|
%
|
|
(6.6)
|
%
|
Soma
|
|
3.4
|
%
|
|
(5.8)
|
%
|
Total
Company
|
|
(7.0)
|
%
|
|
(5.9)
|
%
|
Gross Margin
For the first quarter, gross margin was $190.8 million, or 36.9% of net sales, compared
to $226.9 million, or 40.4% of net
sales, in last year's first quarter. This 350-basis point decrease
primarily reflects the impact of product liquidations, continued
charges related to our omnichannel programs and accelerated
depreciation as a result of our retail fleet optimization plan
announced in the fourth quarter of 2018. Excluding the 100
basis-point impact of accelerated depreciation, gross margin
decreased approximately 250 basis points.
Retail Fleet Optimization Plan
In the first quarter, the Company recorded pre-tax accelerated
depreciation charges of property and equipment within cost of goods
sold of $4.9 million related to our
retail fleet optimization plan. On an after-tax basis, the first
quarter impact of these charges was $3.6
million, or $0.03 per diluted
share.
Selling, General and Administrative Expenses
For the first quarter, selling, general and administrative
("SG&A") expenses were $185.4
million, or 35.9% of net sales, compared to $186.4 million, or 33.2% of net sales, for last
year's first quarter.
Income Tax Provision
For the first quarter, the effective tax rate
was 62.7% compared to 27.9% for last year's
first quarter. In the first quarter of fiscal 2017, we adopted
the employee share-based payment accounting standard which requires
all income tax effects of employee share-based awards to be
recognized in the income statement when the awards vest or are
settled. Previously, these charges were recorded in additional
paid-in capital. Excluding the impact of employee share-based
awards, the effective tax rate for the first quarter would be
approximately flat to last year's first quarter. The following
table details the impact of share-based awards on the Company's
effective tax rate (dollars in millions):
|
|
Thirteen Weeks
Ended
|
|
|
May 4,
2019
|
|
May 5,
2018
|
Components of
income tax provision
|
|
Amount
|
|
Tax
Rate
|
|
Amount
|
|
Tax
Rate
|
Income from
operations
|
|
$
|
1.4
|
|
|
25.0
|
%
|
|
$
|
10.1
|
|
|
25.1
|
%
|
Employee share-based
awards
|
|
2.0
|
|
|
37.7
|
|
|
1.1
|
|
|
2.8
|
|
Income Tax
Provision
|
|
$
|
3.4
|
|
|
62.7
|
%
|
|
$
|
11.2
|
|
|
27.9
|
%
|
Cash, Marketable Securities and Debt
At the end of the first quarter, cash and marketable securities
totaled $168.0 million, a decrease of
$86.8 million compared to last year's
first quarter, while debt totaled $53.8
million, a decrease of $11.1
million from last year's first quarter. This $86.8 million decrease in cash and marketable
securities primarily reflects a $124
million return of cash to shareholders in fiscal 2018
through share repurchases and dividend payments.
Inventories
At the end of the first quarter, inventories totaled
$242.4 million compared to
$253.8 million at the end of last
year's first quarter. This $11.4
million, or 4.5%, decrease primarily reflects the impact of
product liquidations through a third party, store closures and
management of inventory levels relative to net sales.
Fiscal 2019 Second Quarter and Full-Year Outlook
The Company is initiating outlook for the second quarter of
fiscal 2019 and is updating its full year fiscal 2019 outlook from
its previous outlook. The outlook for both the second quarter and
fiscal year excludes expected net charges related to the Company's
retail fleet optimization plan.
For the fiscal 2019 second quarter, compared to the fiscal 2018
second quarter:
- The Company anticipates a mid-single digit decline in total net
sales and consolidated comparable sales, reflecting expected softer
sales in its White House Black Market brand, which will continue
through the second quarter. However, the Company expects that sales
at the Chico's and Soma brands will improve in the second quarter
compared to the first.
- The Company expects gross margin as a percent of net sales to
decline approximately 200 to 250 basis points, due primarily to
incremental costs associated with its omnichannel programs and
deleverage of fixed costs from lower sales.
- SG&A expenses are expected to be approximately flat,
reflecting ongoing cost management, offset by investments in Soma
marketing.
For full year fiscal 2019, compared to full year fiscal
2018:
- The Company anticipates a low-to mid-single digit decline in
total net sales and consolidated comparable sales, versus its
previous guidance of a low-single digit decline in total net sales
and consolidated comparable sales. The Company expects stronger
sales trends across all brands in the second half of the year, as
key initiatives gain traction.
- The Company expects gross margin as a percent of net sales to
be down 50 to 100 basis points versus its previous guidance of
approximately flat to down 50 basis points, due primarily to
incremental costs associated with its omnichannel programs and
deleverage of fixed costs from lower sales.
- The Company anticipates SG&A expenses to be down
approximately $10 million, versus its
previous guidance of approximately flat with fiscal 2018,
reflecting ongoing cost management.
- The Company expects capital expenditures to be approximately
$55 million, primarily driven by
store reinvestments and technology enhancements.
- The Company estimates a fiscal 2019 tax rate in the range of
35% to 40% primarily as a result of an increase in tax expense
related to the accounting for employee share-based awards.
Conference Call Information
The Company is hosting a live conference call on Tuesday,
June 11, 2019 beginning at 8:00 a.m.
ET to review the operating results for the first 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, 7529042, is required to
join the conference call. Interested participants should call 10-15
minutes prior to the 8:00 a.m. start
to be placed in queue.
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House Black
Market, Soma and TellTaleTM is a leading omni-channel
specialty retailer of women's private branded, sophisticated,
casual-to-dressy clothing, intimates and complementary
accessories.
As of May 4, 2019, the Company operated 1,410 stores in the
U.S. and Canada and sold
merchandise through 84 international franchise locations in
Mexico and 1 domestic franchise
airport store. The Company's merchandise is also available at
www.chicos.com, www.chicosofftherack.com, www.whbm.com,
www.soma.com and www.mytelltale.com as well as through third-party
channels. 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. Brooks' quotes and in the section entitled
"Fiscal 2019 Second 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; 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 (including, but not limited
to, the Company's retail fleet optimization plan, brand performance
improvement plans and expanded review of the Company's operations);
sales initiatives and multi-channel strategies; customer traffic;
our ability to appropriately manage our inventory and allocation
processes; our ability to leverage inventory management and
targeted promotions; the successful recruitment of a permanent
President and Chief Executive Officer and successful leadership
transition for the Chico's brand and successful integration of the
new members of our senior management team; uncertainties
regarding future unsolicited offers to buy the Company and our
ability to respond effectively to them as well as to actions of
activist shareholders and others; changes in the political
environment that create consumer uncertainty; 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 and Mexico) 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
|
|
May 4,
2019
|
|
May 5,
2018
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales:
|
|
|
|
|
|
|
|
Chico's
|
$
|
276,702
|
|
|
53.4
|
%
|
|
$
|
300,936
|
|
|
53.6
|
%
|
White House Black
Market
|
160,945
|
|
|
31.1
|
|
|
182,648
|
|
|
32.5
|
|
Soma
|
80,081
|
|
|
15.5
|
|
|
78,231
|
|
|
13.9
|
|
Total Net
Sales
|
517,728
|
|
|
100.0
|
|
|
561,815
|
|
|
100.0
|
|
Cost of goods
sold
|
326,897
|
|
|
63.1
|
|
|
334,947
|
|
|
59.6
|
|
Gross
Margin
|
190,831
|
|
|
36.9
|
|
|
226,868
|
|
|
40.4
|
|
Selling, general and
administrative expenses
|
185,408
|
|
|
35.9
|
|
|
186,419
|
|
|
33.2
|
|
Income from
Operations
|
5,423
|
|
|
1.0
|
|
|
40,449
|
|
|
7.2
|
|
Interest income
(expense), net
|
2
|
|
|
0.0
|
|
|
(245)
|
|
|
0.0
|
|
Income before
Income Taxes
|
5,425
|
|
|
1.0
|
|
|
40,204
|
|
|
7.2
|
|
Income tax
provision
|
3,400
|
|
|
0.6
|
|
|
11,200
|
|
|
2.0
|
|
Net
Income
|
$
|
2,025
|
|
|
0.4
|
%
|
|
$
|
29,004
|
|
|
5.2
|
%
|
Per Share
Data:
|
|
|
|
|
|
|
|
Net income per common
share - basic
|
$
|
0.02
|
|
|
|
|
$
|
0.23
|
|
|
|
Net income per common
and common equivalent share – diluted
|
$
|
0.02
|
|
|
|
|
$
|
0.23
|
|
|
|
Weighted average
common shares outstanding – basic
|
114,434
|
|
|
|
|
125,277
|
|
|
|
Weighted average
common and common
equivalent shares outstanding – diluted
|
114,787
|
|
|
|
|
125,316
|
|
|
|
Dividends declared
per share
|
$
|
0.175
|
|
|
|
|
$
|
0.170
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
May 4,
2019
|
|
February 2,
2019
|
|
May 5,
2018
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
105,141
|
|
|
$
|
124,128
|
|
|
$
|
193,547
|
|
Marketable
securities, at fair value
|
62,836
|
|
|
61,987
|
|
|
61,196
|
|
Inventories
|
242,402
|
|
|
235,218
|
|
|
253,777
|
|
Prepaid expenses and
other current assets
|
45,900
|
|
|
63,845
|
|
|
53,494
|
|
Total Current
Assets
|
456,279
|
|
|
485,178
|
|
|
562,014
|
|
Property and
Equipment, net
|
353,183
|
|
|
370,932
|
|
|
407,569
|
|
Right of Use
Assets
|
729,950
|
|
|
—
|
|
|
—
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
96,774
|
|
|
96,774
|
|
|
96,774
|
|
Other intangible
assets, net
|
38,930
|
|
|
38,930
|
|
|
38,930
|
|
Other assets,
net
|
16,099
|
|
|
15,220
|
|
|
10,707
|
|
Total Other
Assets
|
151,803
|
|
|
150,924
|
|
|
146,411
|
|
|
$
|
1,691,215
|
|
|
$
|
1,007,034
|
|
|
$
|
1,115,994
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
135,964
|
|
|
$
|
143,404
|
|
|
$
|
138,439
|
|
Current lease
liabilities
|
160,731
|
|
|
—
|
|
|
—
|
|
Current
debt
|
—
|
|
|
—
|
|
|
15,000
|
|
Other current and
deferred liabilities
|
120,919
|
|
|
131,820
|
|
|
145,893
|
|
Total Current
Liabilities
|
417,614
|
|
|
275,224
|
|
|
299,332
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
53,750
|
|
|
57,500
|
|
|
49,868
|
|
Long-term lease
liabilities
|
645,796
|
|
|
—
|
|
|
—
|
|
Other noncurrent and
deferred liabilities
|
10,719
|
|
|
89,109
|
|
|
99,330
|
|
Deferred
taxes
|
3,893
|
|
|
5,237
|
|
|
6,560
|
|
Total Noncurrent
Liabilities
|
714,158
|
|
|
151,846
|
|
|
155,758
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,180
|
|
|
1,169
|
|
|
1,292
|
|
Additional paid-in
capital
|
485,805
|
|
|
486,406
|
|
|
471,458
|
|
Treasury stock, at
cost
|
(494,395)
|
|
|
(494,395)
|
|
|
(413,465)
|
|
Retained
earnings
|
567,233
|
|
|
587,145
|
|
|
601,801
|
|
Accumulated other
comprehensive loss
|
(380)
|
|
|
(361)
|
|
|
(182)
|
|
Total
Shareholders' Equity
|
559,443
|
|
|
579,964
|
|
|
660,904
|
|
|
$
|
1,691,215
|
|
|
$
|
1,007,034
|
|
|
$
|
1,115,994
|
|
|
The Company
adopted Accounting Standard Update ("ASU") 2016-02, Leases,
and related amendments as of February 3, 2019 under the modified
retrospective approach and, therefore, has not revised comparative
periods.
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
Thirteen Weeks
Ended
|
|
May 4,
2019
|
|
May 5,
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
|
2,025
|
|
|
$
|
29,004
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
23,837
|
|
|
22,445
|
|
Non-cash lease
expense
|
52,232
|
|
|
—
|
|
Loss on disposal and
impairment of property and equipment, net
|
113
|
|
|
1,031
|
|
Deferred tax
benefit
|
(732)
|
|
|
(838)
|
|
Share-based
compensation expense
|
1,494
|
|
|
5,055
|
|
Deferred rent and
lease credits
|
—
|
|
|
(5,594)
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(7,184)
|
|
|
(20,875)
|
|
Prepaid expenses and
other assets
|
(1,138)
|
|
|
12,270
|
|
Accounts
payable
|
(17,745)
|
|
|
9,253
|
|
Accrued and other
liabilities
|
9,685
|
|
|
10,143
|
|
Lease
liabilities
|
(56,876)
|
|
|
—
|
|
Net cash provided by
operating activities
|
5,711
|
|
|
61,894
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(15,084)
|
|
|
(9,123)
|
|
Proceeds from sale of
marketable securities
|
14,313
|
|
|
7,965
|
|
Purchases of property
and equipment
|
(7,666)
|
|
|
(9,991)
|
|
Net cash used in
investing activities
|
(8,437)
|
|
|
(11,149)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Payments on
borrowings
|
(3,750)
|
|
|
(3,750)
|
|
Proceeds from
issuance of common stock
|
346
|
|
|
605
|
|
Dividends
paid
|
(10,345)
|
|
|
(11,065)
|
|
Tax withholding
payments related to share-based awards
|
(2,430)
|
|
|
(2,991)
|
|
Net cash used in
financing activities
|
(16,179)
|
|
|
(17,201)
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
(82)
|
|
|
(68)
|
|
Net (decrease)
increase in cash and cash equivalents
|
(18,987)
|
|
|
33,476
|
|
Cash and Cash
Equivalents, Beginning of period
|
124,128
|
|
|
160,071
|
|
Cash and Cash
Equivalents, End of period
|
$
|
105,141
|
|
|
$
|
193,547
|
|
|
The Company
adopted ASU 2016-02, and related amendments as of February 3, 2019
under the modified retrospective approach and, therefore, has not
revised comparative periods.
|
Supplemental Detail on Net Income Per Common
Share Calculation
In accordance with accounting guidance, unvested share-based
payment awards that include non-forfeitable rights to dividends,
whether paid or unpaid, are considered participating securities. As
a result, such awards are required to be included in the
calculation of 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
weeks ended May 4, 2019 and May 5, 2018, potential common
shares were excluded from the computation of diluted income per
share 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
|
|
|
May 4,
2019
|
|
May 5,
2018
|
Numerator
|
|
|
|
|
Net income
|
|
$
|
2,025
|
|
|
$
|
29,004
|
|
Net income and
dividends declared allocated to participating securities
|
|
—
|
|
|
(714)
|
|
Net income available
to common shareholders
|
|
$
|
2,025
|
|
|
$
|
28,290
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
|
114,434
|
|
|
125,277
|
|
Dilutive effect of
non-participating securities
|
|
353
|
|
|
39
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
|
114,787
|
|
|
125,316
|
|
|
|
|
|
|
Net Income per
Common Share:
|
|
|
|
|
Basic
|
|
$
|
0.02
|
|
|
$
|
0.23
|
|
Diluted
|
|
$
|
0.02
|
|
|
$
|
0.23
|
|
GAAP to Non-GAAP Reconciliation of Net Income and Diluted
Income Per Common Share
The Company reports information in accordance with GAAP. The
Company's management does not, nor does it suggest that investors
should, consider non-GAAP financial measures in isolation from, or
as a substitute for, financial information prepared in accordance
with GAAP. Further, the non-GAAP measures utilized by the Company
may be unique to the Company, as they may be different from
non-GAAP measures used by other companies. The Company
believes presenting these non-GAAP measures, which exclude items
that are not comparable from period to period, is useful to
investors and others in evaluating the Company's ongoing operating
and financial results in a manner that is consistent with
management's evaluation of business performance and understanding
how such results compare with the Company's historical performance.
The reconciliation below excludes the impact of the Company's
retail fleet optimization plan announced in the fourth quarter of
fiscal 2018.
A reconciliation of net income and diluted income per share on a
GAAP basis to net income and diluted income per share on a non-GAAP
basis for the thirteen weeks ended May 4, 2019 is presented in
the table below:
Chico's FAS, Inc.
and Subsidiaries
|
GAAP to Non-GAAP
Reconciliation of Net Income and Diluted Income per
Share
|
(Unaudited)
|
(in thousands, except
per share amounts)
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
|
May 4,
2019
|
Net
income:
|
|
|
|
|
|
GAAP
basis
|
|
$
|
2,025
|
|
Accelerated
depreciation, net of tax (1)
|
|
3,580
|
|
Non-GAAP adjusted
basis
|
|
$
|
5,605
|
|
|
|
|
Net income per
diluted share:
|
|
|
|
|
|
GAAP
basis
|
|
$
|
0.02
|
|
Accelerated
depreciation, net of tax (1)
|
|
0.03
|
|
Non-GAAP adjusted
basis
|
|
$
|
0.05
|
|
|
(1)
Reflects the impact of accelerated depreciation on property and
equipment due to the change in the useful life of store assets for
store closures added as a result of the Company's retail fleet
optimization plan.
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
May 4, 2019
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
February 2,
2019
|
|
New
Stores
|
|
Closures
|
|
May 4,
2019
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
551
|
|
|
—
|
|
|
(3)
|
|
|
548
|
|
|
|
Chico's
outlets
|
125
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
|
Chico's
Canada
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
|
WHBM frontline
boutiques
|
390
|
|
|
—
|
|
|
(4)
|
|
|
386
|
|
|
|
WHBM
outlets
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
|
WHBM
Canada
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
|
Soma frontline
boutiques
|
258
|
|
|
—
|
|
|
(1)
|
|
|
257
|
|
|
|
Soma
outlets
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
|
Total Chico's FAS,
Inc.
|
1,418
|
|
|
—
|
|
|
(8)
|
|
|
1,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February 2,
2019
|
|
New
Stores
|
|
Closures
|
|
Other
Changes in
SSF
|
|
May 4,
2019
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,502,688
|
|
|
—
|
|
|
(8,750)
|
|
|
(1,111)
|
|
|
1,492,827
|
|
Chico's
outlets
|
315,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
315,400
|
|
Chico's
Canada
|
9,695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,695
|
|
WHBM frontline
boutiques
|
909,849
|
|
|
—
|
|
|
(9,118)
|
|
|
125
|
|
|
900,856
|
|
WHBM
outlets
|
135,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
135,863
|
|
WHBM
Canada
|
14,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,891
|
|
Soma frontline
boutiques
|
488,509
|
|
|
—
|
|
|
(2,048)
|
|
|
—
|
|
|
486,461
|
|
Soma
outlets
|
35,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,774
|
|
Total Chico's FAS,
Inc.
|
3,412,669
|
|
|
—
|
|
|
(19,916)
|
|
|
(986)
|
|
|
3,391,767
|
|
|
As of May 4,
2019, the Company's franchise operations consisted of 84
international retail locations in Mexico and 1 domestic airport
store.
|
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SOURCE Chico's FAS, Inc.