FORT MYERS, Fla., June 8, 2021 /PRNewswire/ --
Comparisons to Q1 2020
- Total Company first quarter sales increased
38.4%
- Soma's extraordinary sales continued and increased
65%
- Gross margin improved to 32.7%
- SG&A expense remained flat and declined
sequentially
- Liquidity remains strong with cash and marketable
securities of $102.4 million with no
additional borrowings
Chico's FAS, Inc. (NYSE: CHS) (the "Company" or "Chico's FAS")
today announced its financial results for the fiscal 2021 thirteen
weeks ended May 1, 2021 (the "first quarter").
"Our first quarter results underscore the tremendous progress we
are making in our turnaround strategy and the power of our three
unique brands and being a digital-first, customer-led company,"
said Molly Langenstein, Chico's FAS
Chief Executive Officer and President.
"The strong first quarter performance across all three brands
was fueled by our significant improvements in product and
marketing, which drove full price selling. Our momentum started in
the fourth quarter of fiscal 2019, stalled by the pandemic, is now
back on track to deliver meaningful growth in the years to come.
Soma®, which posted a 65% sales increase over last
year's first quarter, remains on track to be one of the largest
intimate apparel brands in the country. At Chico's® and
White House Black Market®, elevated styling and quality
are leading to faster sell through rates and customer enthusiasm.
Operating discipline, strategically planned inventories and the
ongoing benefit of cost actions, are further expanding margins and
contributing to our return to profitable growth.
"Our progress is measurable and the opportunities planned
throughout the coming year will continue driving sales growth, even
deeper customer loyalty and market share gains," Langenstein
added.
Business Highlights
The Company's first quarter highlights include:
- Continued extraordinary sales growth at Soma: Soma
posted sales growth of 65% over the thirteen weeks ended
May 2, 2020 ("last year's first
quarter") and a 39% comparable sales growth over the thirteen weeks
ended May 4, 2019 (the "first quarter
of fiscal 2019"). According to market research firm NPD, Group
Inc., for the 12 months ended April
2021, Soma's growth exceeded that of the U.S. apparel
market, was in the top ten brands for non-sport bras and panties,
and was in the top five brands in the sleepwear market. We believe
this is compelling evidence Soma is well positioned and on track to
accelerate market share gains.
- Improving sales performance at Chico's and White House Black
Market ("WHBM"): Chico's and WHBM are continuing to benefit
from improvements in styling and quality. We've embraced the
comfort culture and developed innovative fabrics and technology to
provide comfort features. The bottoms business in both apparel
brands was strong. Inventories are lean and demand outpaced supply.
Inventory productivity is high, strategically fueling more full
price sales.
- Enhanced marketing continued to drive traffic as well as new
customers: Chico's FAS continues to elevate its marketing
efforts with digital storytelling, social influencers and organic
social efforts. Enhanced marketing initiatives are driving new
customer acquisition across all three brands, with new and
reactivated customers growing on a monthly basis in the first
quarter. The average age of new customers continues to drop,
reinforcing the runway for all three brands.
- Strong balance sheet: The Company ended the first
quarter with more than $102 million
in cash and marketable securities. Borrowings on the $300 million credit facility remain unchanged at
$149 million.
- Improved gross margin: Gross margin rate improved to
32.7% in the first quarter, exceeding each quarter's performance in
fiscal 2020.
- Continued cost discipline: Selling, general and
administrative ("SG&A") expenses were essentially flat
year-over-year and declined to a 34.6% rate for the first quarter,
an improvement over the fourth quarter fiscal 2020 rate of 35.3%,
reflecting continued cost discipline and the ongoing benefit of
cost savings realized last year.
- Obtained additional meaningful rent reductions: In the
first quarter of fiscal 2021, Chico's FAS obtained additional rent
reduction commitments from landlords of $10
million; this is in addition to the $65 million of reductions and abatements
negotiated during fiscal 2020.
- Shop-in-shops: Soma shop-in-shops successfully opened
inside Chico's stores and are exceeding expectations. 47
shop-in-shops will be open by mid-June
2021.
Overview of Financial Results
For the first quarter, the Company reported a net loss of
$8.9 million, or $0.08 loss per diluted share, compared to a net
loss of $178.3 million, or
$1.55 loss per diluted share, for
last year's first quarter. Last year's first quarter net loss
included $134.8 million, or
$1.17 per share, in significant
after-tax non-cash charges as presented in the accompanying Summary
of Significant Non-Cash Charges table.
Sales
For the first quarter, net sales were $388.0 million compared to $280.3 million in last year's first quarter. This
38.4% increase primarily reflects the impact of temporary store
closures during last year's first quarter, partially offset by 39
net permanent store closures since last year's first quarter. Total
Company comparable sales for the first quarter compared to the
first quarter of fiscal 2019 were down 21.7%, Soma was up 39.3%,
and the apparel brands were down 32.9%. Total Company on-hand
inventories at the end of the first quarter were down 21.0%, Soma
was up 12.9%, and the apparel brands were down 35.3%; correlating
sales and on-hand inventory.
Gross Margin
For the first quarter, gross margin was $126.8 million, or 32.7% of net sales, compared
to $(11.1) million, or (4.0)% of net
sales, in last year's first quarter. The year-over-year improvement
in gross margin rate primarily reflects the impact of significant
non-cash charges in last year's first quarter, as reflected in the
accompanying Summary of Significant Non-Cash Charges table,
improved leverage of occupancy costs with rising sales and margin
expansion as a result of less promotional activity.
Selling, General and Administrative Expenses
For the first quarter, SG&A expenses were $134.3 million, or 34.6% of net sales, compared
to $130.2 million, or 46.4% of net
sales, for last year's first quarter, primarily reflecting
continued cost savings initiatives and sales leverage. The first
quarter SG&A expense rate of 34.6% improved over the 35.9% rate
in the first quarter of fiscal 2019, reflecting the impact of cost
savings initiatives which more than offset sales deleverage.
Income Taxes
For the first quarter, the effective tax rate was 3.3%
compared to 30.0% for last year's first quarter. The 3.3%
effective tax rate for the first quarter primarily reflects a
change in the valuation allowance and favorable state audit
settlements, offset by share-based compensation expense and a
provision for state income and foreign withholding taxes. The 30.0%
effective tax rate for last year's first quarter primarily reflects
benefits provided by the enactment of the Coronavirus Aid, Relief,
and Economic Security Act, partially offset by the unfavorable
impact of the Company's book goodwill impairment and share-based
compensation expense incurred during last year's first quarter.
Cash, Marketable Securities and Debt
At the end of the first quarter, cash and marketable securities
totaled $102.4 million compared to
$117.6 million at the end of last
year's first quarter. Debt at the end of the first quarter totaled
$149.0 million, remaining unchanged
from the end of last year's first quarter.
At the end of the fourth quarter of fiscal 2020, cash and
marketable securities totaled $109.4
million. The $7.0 million
decrease in cash and marketable securities primarily reflects rent
and other liability settlements as well as acceleration of vendor
payments, partially offset by an improvement in other cash flow
components.
Inventories
At the end of the first quarter, inventories totaled
$209.7 million compared to
$273.1 million at the end of last
year's first quarter. This $63.5
million, or 23.2%, decrease primarily reflects conservative
inventory management to better align inventory and assortments with
consumer demand.
Fiscal 2021 Outlook
Given the ongoing market volatility and related uncertainty
caused by the COVID-19 pandemic, the Company is not providing
specific fiscal 2021 guidance at this time.
The Company is, however, providing information on its planning
expectations for the fiscal 2021 full year. At this time, the
Company expects:
- Consolidated year-over-year net sales improvement between 28%
to 34%;
- Gross margin rate improvement of 18 to 20 percentage points
over last fiscal year;
- SG&A as a percent of net sales to improve 500 to 600 basis
points year-over-year; and
- Income tax expense of approximately $0.5
million.
Conference Call Information
The Company is hosting a live conference call on Tuesday,
June 8, 2021 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 Company's
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, 9636050, 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.
Chico's FAS is a Florida-based
fashion company founded in 1983 on Sanibel Island, Fla. The Company
reinvented the fashion retail experience by creating fashion
communities anchored by service, which put the customer at the
center of everything we do. As one of the leading fashion retailers
in North America, Chico's FAS is a
company of three unique brands - Chico's, WHBM and Soma - each
thriving in their own white space, founded by women, led by women,
providing solutions that millions of women say give them confidence
and joy.
Our Company has a passion for fashion, and each day, we provide
clothing, shoes and accessories, intimate apparel and expert
styling in our brick-and-mortar boutiques, digital online boutiques
and through Style Connect, the Company's proprietary digital
styling tool that enables customers to conveniently shop wherever,
whenever and however they prefer.
As of May 1, 2021, the Company operated 1,293 stores in the
U.S. and sold merchandise through 66 international franchise
locations in Mexico and 2 domestic
franchise airport locations. 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.
To learn more about Chico's FAS, please visit 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 statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements, including
without limitation the quote from Ms. Langenstein and the sections
captioned "Business Highlights" and "Fiscal 2021 Outlook," relate
to expectations and projections regarding the Company's future
performance and may include the words "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may," "will," "plan,"
"outlook," "project," "should," "strategy," "potential,"
"confident" and similar terms. 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 risks and uncertainties that could cause actual
results to differ materially from historical results or those
expressed or implied by such forward-looking statements. Although
we believe our expectations are based on reasonable estimates and
assumptions, 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 actual
results to differ include, but are not limited to: the effects of
the pandemic and uncertainties about its depth and duration, new
variants of COVID-19 that have emerged, and the speed, efficacy and
availability of vaccine and treatment developments, as well as the
impacts to general economic conditions and the economic slowdown
affecting consumer behavior and discretionary spending (before and
after the pandemic) and any ongoing temporary store restrictions
(including reduced hours or capacity) due to government mandates;
the effectiveness of store reopenings, cost reduction initiatives
(including our ability to effectively restructure our lease
portfolio to obtain future rent relief), the extent, availability
and effectiveness of any pandemic stimulus packages or loan
programs, including the Coronavirus Aid, Relief, and Economic
Security Act, the ability of our third-party business partners,
including our suppliers, logistics providers, vendors and
landlords, to meet their obligations to us in light of financial
stress, staffing shortages, liquidity challenges, bankruptcy
filings by other industry participants and other disruptions due to
the pandemic, the impact of the pandemic on our manufacturing
operations in China, and trends in
consumer behavior and spending during and after the end of the
pandemic; our ability to successfully implement any alternatives
that we pursue including our ability to achieve the cost savings
described in this release; government actions and policies;
increases in unemployment rates and taxes; local, regional,
national and international economic conditions; changes in the
general economic and business environment; changes in the general
or specialty retail or apparel industries, including the extent of
the market demand and overall level of spending for women's private
branded clothing and related accessories; future permanent store
closures; the effectiveness of our brand strategies, awareness and
marketing programs; 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
organizational restructure and five fiscal 2021 operating
priorities which are: continuing our ongoing digital
transformation; further refining product through fit, quality,
fabric and innovation; driving increased customer engagement
through marketing; maintaining our operating and cost discipline;
and further enhancing the productivity of our real estate
portfolio; cyber security or other data or security breaches; 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 leadership and
the successful transition of 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; the risk
that our investments in merchandise or marketing initiatives may
not deliver the results we anticipate; 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 that could impact, among other things, our
sourcing from foreign suppliers; the risk that future legislation
may prohibit certain imports from China; and significant shifts in consumer
behavior. Other risk factors are detailed in the Company's Annual
Report on Form 10-K and, from time to time, the Company's Quarterly
Reports on Form 10-Q and other reports filed with the Securities
and Exchange Commission. These factors should be considered in
evaluating forward-looking statements contained herein. There can
be no assurance that the actual future results, performance, or
achievements expressed or implied by such forward-looking
statements will occur. 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)
Investor Relations Contact:
Tom Filandro
ICR, Inc.
(646) 277-1235
tom.filandro@icrinc.com
Chico's FAS, Inc. • 11215 Metro Parkway •
Fort Myers, Florida 33966 • (239)
277-6200
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Loss
|
(Unaudited)
|
(in thousands,
except per share amounts)
|
|
|
Thirteen Weeks
Ended
|
|
May 1,
2021
|
|
May 2,
2020
|
|
Amount
|
|
% of
Sales
|
|
Amount
|
|
% of
Sales
|
Net
Sales:
|
|
|
|
|
|
|
|
Chico's
|
$
|
177,021
|
|
|
45.6
|
%
|
|
$
|
131,437
|
|
|
46.9
|
%
|
|
White House Black
Market
|
104,047
|
|
|
26.8
|
|
|
83,920
|
|
|
29.9
|
|
|
Soma
|
106,893
|
|
|
27.6
|
|
|
64,907
|
|
|
23.2
|
|
|
Total Net
Sales
|
387,961
|
|
|
100.0
|
|
|
280,264
|
|
|
100.0
|
|
|
Cost of goods
sold
|
261,166
|
|
|
67.3
|
|
|
291,359
|
|
|
104.0
|
|
|
Gross
Margin
|
126,795
|
|
|
32.7
|
|
|
(11,095)
|
|
|
(4.0)
|
|
|
Selling, general and
administrative expenses
|
134,319
|
|
|
34.6
|
|
|
130,171
|
|
|
46.4
|
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
0.0
|
|
|
113,180
|
|
|
40.4
|
|
|
Loss from
Operations
|
(7,524)
|
|
|
(1.9)
|
|
|
(254,446)
|
|
|
(90.8)
|
|
|
Interest expense,
net
|
(1,705)
|
|
|
(0.5)
|
|
|
(344)
|
|
|
(0.1)
|
|
|
Loss before Income
Taxes
|
(9,229)
|
|
|
(2.4)
|
|
|
(254,790)
|
|
|
(90.9)
|
|
|
Income tax
benefit
|
(300)
|
|
|
(0.1)
|
|
|
(76,500)
|
|
|
(27.3)
|
|
|
Net
Loss
|
$
|
(8,929)
|
|
|
(2.3)
|
%
|
|
$
|
(178,290)
|
|
|
(63.6)
|
%
|
|
Per Share
Data:
|
|
|
|
|
|
|
|
Net loss per common
share - basic
|
$
|
(0.08)
|
|
|
|
|
$
|
(1.55)
|
|
|
|
|
Net loss per common
and common equivalent share – diluted
|
$
|
(0.08)
|
|
|
|
|
$
|
(1.55)
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
116,689
|
|
|
|
|
115,574
|
|
|
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
116,689
|
|
|
|
|
115,574
|
|
|
|
|
Dividends declared
per share
|
$
|
—
|
|
|
|
|
$
|
0.09
|
|
|
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(in
thousands)
|
|
|
May 1,
2021
|
|
January 30,
2021
|
|
May 2,
2020
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
83,874
|
|
|
$
|
90,791
|
|
|
$
|
89,841
|
|
Marketable securities,
at fair value
|
18,511
|
|
|
18,559
|
|
|
27,755
|
|
Inventories
|
209,668
|
|
|
203,983
|
|
|
273,126
|
|
Prepaid expenses and
other current assets
|
39,701
|
|
|
30,565
|
|
|
35,848
|
|
Income taxes
receivable
|
57,513
|
|
|
58,140
|
|
|
66,834
|
|
Total Current
Assets
|
409,267
|
|
|
402,038
|
|
|
493,404
|
|
Property and
Equipment, net
|
223,898
|
|
|
241,370
|
|
|
285,714
|
|
Right of Use
Assets
|
554,795
|
|
|
586,061
|
|
|
612,161
|
|
Other
Assets:
|
|
|
|
|
|
Goodwill
|
16,360
|
|
|
16,360
|
|
|
16,360
|
|
Other intangible
assets, net
|
5,000
|
|
|
5,000
|
|
|
6,164
|
|
Other assets,
net
|
21,038
|
|
|
24,049
|
|
|
42,901
|
|
Total Other
Assets
|
42,398
|
|
|
45,409
|
|
|
65,425
|
|
|
$
|
1,230,358
|
|
|
$
|
1,274,878
|
|
|
$
|
1,456,704
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
128,230
|
|
|
$
|
116,506
|
|
|
$
|
140,396
|
|
Current lease
liabilities
|
184,296
|
|
|
194,551
|
|
|
190,811
|
|
Other current and
deferred liabilities
|
116,764
|
|
|
120,729
|
|
|
108,707
|
|
Total Current
Liabilities
|
429,290
|
|
|
431,786
|
|
|
439,914
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term
debt
|
149,000
|
|
|
149,000
|
|
|
149,000
|
|
Long-term lease
liabilities
|
480,537
|
|
|
515,797
|
|
|
520,323
|
|
Other noncurrent and
deferred liabilities
|
11,936
|
|
|
11,863
|
|
|
6,630
|
|
Deferred
taxes
|
1,313
|
|
|
1,313
|
|
|
30
|
|
Total Noncurrent
Liabilities
|
642,786
|
|
|
677,973
|
|
|
675,983
|
|
Commitments and
Contingencies
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
Common
stock
|
1,226
|
|
|
1,197
|
|
|
1,196
|
|
Additional paid-in
capital
|
500,453
|
|
|
498,488
|
|
|
493,140
|
|
Treasury stock, at
cost
|
(494,395)
|
|
|
(494,395)
|
|
|
(494,395)
|
|
Retained
earnings
|
150,968
|
|
|
159,765
|
|
|
341,563
|
|
Accumulated other
comprehensive gain (loss)
|
30
|
|
|
64
|
|
|
(697)
|
|
Total Shareholders'
Equity
|
158,282
|
|
|
165,119
|
|
|
340,807
|
|
|
$
|
1,230,358
|
|
|
$
|
1,274,878
|
|
|
$
|
1,456,704
|
|
Chico's FAS, Inc.
and Subsidiaries
|
Condensed
Consolidated Cash Flow Statements
|
(Unaudited)
|
(in
thousands)
|
|
|
Thirteen Weeks
Ended
|
|
May 1,
2021
|
|
May 2,
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net loss
|
$
|
(8,929)
|
|
|
$
|
(178,290)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Goodwill and
intangible impairment charges
|
—
|
|
|
113,180
|
|
Inventory
write-offs
|
—
|
|
|
43,101
|
|
Depreciation and
amortization
|
13,432
|
|
|
17,777
|
|
Non-cash lease
expense
|
47,737
|
|
|
51,018
|
|
Right of use asset
impairment
|
—
|
|
|
2,442
|
|
Loss on disposal and
impairment of property and equipment, net
|
31
|
|
|
18,637
|
|
Deferred tax
benefit
|
10
|
|
|
(22,067)
|
|
Share-based
compensation expense
|
2,815
|
|
|
1,704
|
|
Changes in assets and
liabilities:
|
|
|
|
Inventories
|
(5,685)
|
|
|
(69,490)
|
|
Prepaid expenses and
other assets
|
(37)
|
|
|
3,748
|
|
Income tax
receivable
|
627
|
|
|
(59,703)
|
|
Accounts
payable
|
11,900
|
|
|
5,966
|
|
Accrued and other
liabilities
|
(4,190)
|
|
|
(7,537)
|
|
Lease
liability
|
(62,111)
|
|
|
(19,119)
|
|
Net cash used in
operating activities
|
(4,400)
|
|
|
(98,633)
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Purchases of
marketable securities
|
(139)
|
|
|
(5,191)
|
|
Proceeds from sale of
marketable securities
|
140
|
|
|
41,156
|
|
Purchases of property
and equipment
|
(1,697)
|
|
|
(6,464)
|
|
Net cash (used in)
provided by investing activities
|
(1,696)
|
|
|
29,501
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Proceeds from
borrowings
|
—
|
|
|
106,500
|
|
Proceeds from issuance
of common stock
|
1
|
|
|
252
|
|
Dividends
paid
|
—
|
|
|
(10,686)
|
|
Payments of tax
withholdings related to share-based awards
|
(822)
|
|
|
(933)
|
|
Net cash (used in)
provided by financing activities
|
(821)
|
|
|
95,133
|
|
Effects of exchange
rate changes on cash and cash equivalents
|
—
|
|
|
(132)
|
|
Net (decrease)
increase in cash and cash equivalents
|
(6,917)
|
|
|
25,869
|
|
Cash and Cash
Equivalents, Beginning of period
|
90,791
|
|
|
63,972
|
|
Cash and Cash
Equivalents, End of period
|
$
|
83,874
|
|
|
$
|
89,841
|
|
Supplemental Detail on Net Loss 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 loss per common share pursuant to the "two-class"
method. For the Company, participating securities are comprised
entirely of unvested restricted stock awards granted prior to
fiscal 2020.
Net loss per share is determined using the two-class method when
it is more dilutive than the treasury stock method. Basic net loss
per share is computed by dividing net loss available to common
shareholders by the weighted-average number of common shares
outstanding during the period, including participating securities.
Diluted net loss per share reflects the dilutive effect of
potential common shares from non-participating securities such as
restricted stock awards granted after fiscal 2019, stock options,
PSUs and restricted stock units. For the thirteen weeks ended
May 1, 2021 and May 2, 2020, potential common shares were
excluded from the computation of diluted loss per common share to
the extent they were antidilutive.
The following unaudited table sets forth the computation of net
loss per basic and diluted share shown on the face of the
accompanying condensed consolidated statements of loss (in
thousands, except per share amounts):
|
|
Thirteen Weeks
Ended
|
|
|
May 1,
2021
|
|
May 2,
2020
|
Numerator
|
|
|
|
|
Net loss
|
|
$
|
(8,929)
|
|
|
$
|
(178,290)
|
|
Net income and
dividends declared allocated to participating securities
|
|
—
|
|
|
(358)
|
|
Net loss available to
common shareholders
|
|
$
|
(8,929)
|
|
|
$
|
(178,648)
|
|
|
|
|
|
|
Denominator
|
|
|
|
|
Weighted average
common shares outstanding – basic
|
|
116,689
|
|
|
115,574
|
|
Dilutive effect of
non-participating securities
|
|
—
|
|
|
—
|
|
Weighted average
common and common equivalent shares outstanding –
diluted
|
|
116,689
|
|
|
115,574
|
|
|
|
|
|
|
Net loss per
common share:
|
|
|
|
|
Basic
|
|
$
|
(0.08)
|
|
|
$
|
(1.55)
|
|
Diluted
|
|
$
|
(0.08)
|
|
|
$
|
(1.55)
|
|
Supplemental Detail on Significant Non-Cash
Charges
A summary of significant non-cash charges related to the impact
of the COVID-19 pandemic (the "pandemic") on last year's first
quarter results is presented in the table below:
Summary of
Significant Non-Cash Charges (1)
|
|
|
|
Thirteen Weeks
Ended
|
|
May 2,
2020
|
|
Amount, pre-tax
(4)
|
|
% of Net Sales
(4)
|
|
Amount,
after-tax
|
|
Per share
impact
|
|
(dollars in
thousands, except per share amounts)
|
Gross
margin:
|
|
|
|
|
|
|
|
Inventory write-offs
(2)
|
$
|
43,101
|
|
|
15.4
|
%
|
|
$
|
26,091
|
|
|
$
|
0.23
|
|
Long-lived store asset
impairment (2)(3)
|
18,493
|
|
|
6.6
|
|
|
13,907
|
|
|
0.12
|
|
Right of use store
asset impairment (2)
|
2,442
|
|
|
0.9
|
|
|
1,837
|
|
|
0.02
|
|
Total significant
charges impacting gross margin
|
64,035
|
|
|
22.8
|
|
|
41,835
|
|
|
0.37
|
|
Goodwill and
intangible impairment charges:
|
|
|
|
|
|
|
|
Goodwill impairment
(2)
|
80,414
|
|
|
28.7
|
|
|
68,362
|
|
|
0.59
|
|
Indefinite-lived asset
impairment (2)
|
32,766
|
|
|
11.7
|
|
|
24,640
|
|
|
0.21
|
|
Total significant
goodwill and intangible impairment charges
|
113,180
|
|
|
40.4
|
|
|
93,002
|
|
|
0.80
|
|
Total significant
non-cash charges
|
177,215
|
|
|
63.2
|
%
|
|
$
|
134,837
|
|
|
$
|
1.17
|
|
(1)
|
All significant
charges relate to the impact of the pandemic. Less significant
charges that may have been incurred are not reflected in the table
above.
|
(2)
|
Presented
pre-tax.
|
(3)
|
Primarily includes
impairment on leasehold improvements at certain underperforming
stores.
|
(4)
|
May not foot due
to rounding.
|
Chico's FAS, Inc.
and Subsidiaries
|
Store Count and
Square Footage
|
Thirteen Weeks Ended
May 1, 2021
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2021
|
|
New
Stores
|
|
Closures
|
|
May 1,
2021
|
|
|
Store
Count:
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
517
|
|
|
—
|
|
|
(4)
|
|
|
513
|
|
|
|
Chico's
outlets
|
123
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|
|
WHBM frontline
boutiques
|
347
|
|
|
—
|
|
|
(3)
|
|
|
344
|
|
|
|
WHBM
outlets
|
56
|
|
|
—
|
|
|
(1)
|
|
|
55
|
|
|
|
Soma frontline
boutiques
|
241
|
|
|
—
|
|
|
(1)
|
|
|
240
|
|
|
|
Soma
outlets
|
18
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
|
Total Chico's FAS,
Inc.
|
1,302
|
|
|
—
|
|
|
(9)
|
|
|
1,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 30,
2021
|
|
New
Stores
|
|
Closures
|
|
Other Changes in
SSF
|
|
May 1,
2021
|
Net Selling Square
Footage (SSF):
|
|
|
|
|
|
|
|
|
|
Chico's frontline
boutiques
|
1,411,356
|
|
|
—
|
|
|
(12,548)
|
|
|
—
|
|
|
1,398,808
|
|
Chico's
outlets
|
309,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309,921
|
|
WHBM frontline
boutiques
|
814,157
|
|
|
—
|
|
|
(7,182)
|
|
|
—
|
|
|
806,975
|
|
WHBM
outlets
|
117,484
|
|
|
—
|
|
|
(2,337)
|
|
|
—
|
|
|
115,147
|
|
Soma frontline
boutiques
|
454,557
|
|
|
—
|
|
|
(1,758)
|
|
|
—
|
|
|
452,799
|
|
Soma
outlets
|
34,329
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,329
|
|
Total Chico's FAS,
Inc.
|
3,141,804
|
|
|
—
|
|
|
(23,825)
|
|
|
—
|
|
|
3,117,979
|
|
As of May 1,
2021, the Company's franchise operations consisted of 66
international retail locations in Mexico and 2 domestic airport
locations.
|
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SOURCE Chico's FAS, Inc.