8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 15, 2006

CHARMING SHOPPES, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	000-07258	23-1721355
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

450 WINKS LANE, BENSALEM, PA	19020
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (215) 245-9100

NOT APPLICABLE

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)  

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)  

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))  

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))  

Item 2.02. Results of Operations and Financial Condition.

On November 15, 2006 we issued a press release reporting, among other things, our sales and earnings for the third quarter and nine months ended October 28, 2006, re-affirming our outlook for the fourth quarter of our fiscal year ending February 3, 2007, and increasing our outlook for the fiscal year ending February 3, 2007. The press release is attached as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, the information included in this Item 2.02, and the exhibit attached hereto, shall be deemed to be “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press Release dated November 15, 2006

1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CHARMING SHOPPES, INC.
	(Registrant)
Date: November 15, 2006	/S/ERIC M. SPECTER
	Eric M. Specter
	Executive Vice President
	Chief Financial Officer

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated November 15, 2006

3

EX-99

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

CHARMING SHOPPES REPORTS THIRD QUARTER

NET INCOME OF $19.4 MILLION, AN INCREASE OF 80%

COMPANY INCREASES EARNINGS OUTLOOK FOR FULL FISCAL YEAR 2007

Bensalem, PA, November 15, 2006 - Charming Shoppes, Inc. (NASDAQ:CHRS) a leading multi-brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel, today reported sales and earnings for the thirdquarter and nine months ended October 28, 2006.

Three Months Ended October 28, 2006

For the three months ended October 28, 2006, net income was $19.4 million, or $0.15 per diluted share, an 80% increase compared to net income of $10.8 million or $0.09 per diluted share for the corresponding period ended October 29, 2005. The Company entered the third quarter with lower levels of seasonal inventory, resulting in an improved merchandise margin compared to the year-ago period. The quarter also benefited from the addition of the Company’s outlet stores, contribution from credit operations, and well-controlled expenses.

Net sales for the three months ended October 28, 2006 increased 5% to $695.3 million, compared to net sales of $663.7 million for the three months ended October 29, 2005. Net sales for the Company’s direct-to-consumer segment were $79.8 million during the three months ended October 28, 2006, compared to $93.6 million during the three months ended October 29, 2005. Net sales for the Company’s retail stores segment were $615.5 million during the three months ended October 28, 2006, compared to $570.1 million during the three months ended October 29, 2005. Consolidated comparable store sales for the Company’s retail store brands increased 1% during the three months ended October 28, 2006.

Commenting on sales and earnings, Dorrit J. Bern, Chairman, Chief Executive Officer and President of Charming Shoppes, Inc., said, “We are pleased to report earnings results which exceeded our plans for the quarter, and reflect a strong performance compared to our year-ago quarter. Entering the quarter with clean inventories resulted in improvements in our merchandise margin, which contributed to our better-than-planned earnings results. The quarter also benefited from the inclusion of our first fully-operational quarter for our outlet business, contribution from our credit operations, and strong expense management throughout the Company”.

Nine months Ended October 28, 2006

For the nine months ended October 28, 2006, net income was $84.0 million, or $0.63 per diluted share, a 5% increase compared to net income of $80.2 million or $0.61 per diluted share for the corresponding period ended October 29, 2005. The current year’s nine-month period includes pre-opening operating expenses of approximately $7.8 million pre tax, ($5.0 million after tax or $0.04 per diluted share) related to the Company’s opening of 76 Lane Bryant Outlet stores late in the second quarter. Year to date, net income before these expenses grew 11% over the prior year to date period. (See reconciliation in table below.)

Net sales for the nine months ended October 28, 2006 increased 12% to $2,193.6 million, compared to net sales of $1,956.1 million for the nine months ended October 29, 2005. Net sales for the Company’s direct-to-consumer segment were $279.6 million during the nine months ended October 28, 2006. Net sales for the Company’s retail stores segment were $1,914.0 million during the nine months ended October 28, 2006, compared to $1,811.2 million during the nine months ended October 29,. 2005. Consolidated comparable store sales for the Company’s retail store brands increased 1% during the nine months ended October 28, 2006.

Comparable store sales by retail store brand for the thirteen and thirty-nine weeks ended October 28, 2006, were:

	Thirteen Weeks	Thirty-nine Weeks
	Ended October 28, 2006	Ended October 28, 2006
Lane Bryant Stores	0%	2%
Fashion Bug Stores	0%	(1%)
Catherines Stores	4%	4%
Consolidated Retail Store Brands	1%	1%

Year to date, the Company’s net income results included pre-opening operating expenses related to the opening of the Company’s outlet stores. Management believes the following analysis provides a more meaningful comparison for users of the Company’s financial statements:

($ in millions)
Net income for the nine months ended October 28, 2006, as reported:	$84.0
Pre-opening operating expenses related to outlet stores, after tax::	$  5.0
Net income for the nine months ended October 28, 2006, as adjusted:	$89.0
Net income for the nine months ended October 29, 2005, as reported:	$80.2
Percentage increase	11%

Reaffirmed Outlook for the Fourth Quarter ending February 3, 2007

For the fourth quarter ending February 3, 2007, the Company has reaffirmed its projection for diluted earnings per share in the range of $0.21 - $0.22. This projection assumes total sales in a range of $880 to $890 million and flat consolidated comparable store sales for the Company’s retail stores, compared to a 7% comparable store sales increase in the corresponding period of the prior year. For the corresponding period ended January 28, 2006, diluted earnings per share were $0.15.

Increased Outlook for the Fiscal Year ending February 3, 2007

For the fiscal year ending February 3, 2007, the Company has increased its projection for diluted earnings per share in the range of $0.84 - $0.85, compared to diluted earnings per share of $0.76 for the corresponding period ended January 28, 2006. Previously, the Company had projected diluted earnings per share in the range of $0.81 - $0.83.

Charming Shoppes, Inc. will host its third quarter earnings conference call today at 9:15 am Eastern time. To listen to the conference call, please dial 877-407-8293 approximately 10 minutes prior to the scheduled event. The conference call will also be simulcast at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. The general public is invited to listen to the conference call via the webcast or the dial-in telephone number.

This press release, a transcript of prepared conference call remarks, and certain other financial and statistical information will be available, prior to today’s conference call, on the Company’s corporate website, at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. An audio rebroadcast of the conference call will be accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives, following the live conference.

The conference call will be recorded on behalf of Charming Shoppes, Inc. and consists of copyrighted material. It may not be re-recorded, reproduced, transmitted or rebroadcast, in whole or in part, without the Company's express written permission. Accessing this call or the rebroadcast represents consent to these terms and conditions. Participation in this call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call.

At October 28, 2006, Charming Shoppes, Inc. operated 2,386 retail stores in 48 states under the names LANE BRYANT^®, FASHION BUG^®, FASHION BUG PLUS^®, CATHERINES PLUS SIZES^®, LANE BRYANT OUTLET™, and PETITE SOPHISTICATE OUTLET™. During the thirty-nine weeks ended October 28, 2006 the Company opened 181 (including 124 Lane Bryant and Petite Sophisticate Outlet stores), relocated 49, and closed 31 retail stores. The Company ended the period with 1,021 Fashion Bug and Fashion Bug Plus stores, 855 Lane Bryant and Lane Bryant Outlet stores, 466 Catherines Plus Sizes stores, and 44 Petite Sophisticate Outlet stores, comprising approximately 16,020,000 square feet of leased space. Apparel, accessories, footwear and gift catalogs, including the following titles, are operated by Charming Shoppes’ Crosstown Traders: Old Pueblo Traders, Bedford Fair, Willow Ridge, Lew Magram, Brownstone Studio, Regalia, Intimate Appeal, Monterey Bay Clothing Company, Coward Shoe and Figi's. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc.

This press release contains and the Company’s conference call will contain certain forward-looking statements concerning the Company's operations, performance, and financial condition. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: failure to implement the Company’s business plan for entry into the outlet store distribution channel, the failure to implement the Company’s business plan for increased profitability and growth in the Company’s retail stores and direct-to-consumer segments, the failure to successfully implement the Company’s expansion of Cacique through new store formats, the failure to successfully implement the Company’s integration of operations of, and the business plan for, Crosstown Traders, Inc., adverse changes in costs vital to catalog operations, such as postage, paper and acquisition of prospects, declining response rates to catalog offerings, failure to maintain efficient and uninterrupted order-taking and fulfillment in our direct-to-consumer business, changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, escalation of energy costs, a weakness in overall consumer demand, failure to find suitable store locations, the ability to hire and train associates, trade and security restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow from the Company’s centralized distribution facilities, competitive pressures, and the adverse effects of natural disasters, war, acts of terrorism or threats of either, or other armed conflict, on the United States and international economies. These, and other risks and uncertainties, are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2006 and other Company filings with the Securities and Exchange Commission. Charming Shoppes assumes no duty to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

CONTACT:	Gayle M. Coolick
	Director of Investor Relations
	215-638-6955

CHARMING SHOPPES, INC.
(Unaudited)
				3rd Quarter						3rd Quarter
				Ended						Ended
	Percent			Oct 28,			Percent			Oct 29,			Percent
(in thousands, except per share amounts)	Change			2006			of Sales (a)			2005 (b) (c)			of Sales (a)
Net sales		4.8		$	695,278			100.0		$	663,677			100.0
Cost of goods sold, buying, catalog and occupancy		3.6			478,247			68.8			461,806			69.6
Selling, general, and administrative (d)		2.6			186,006			26.8			181,275			27.3
Total operating expenses		3.3			664,253			95.5			643,081			96.9
Income from operations		50.6			31,025			4.5			20,596			3.1
Other income, principally interest		18.2			2,074			0.3			1,754			0.3
Interest expense		(26.2	)		(3,540	)		(0.5	)		(4,797	)		(0.7	)
Income before income taxes		68.4			29,559			4.3			17,553			2.6
Income tax provision		50.2			10,202			1.5			6,791			1.0
Net income		79.9		$	19,357			2.8		$	10,762			1.6
Basic net income per share				$	0.16					$	0.09
Weighted average shares outstanding					122,586						120,102
Net income per share, assuming dilution				$	0.15					$	0.09
Weighted average shares and equivalents outstanding					139,932						137,552
(a) Results do not add due to rounding.
(b) Includes results from operations for Crosstown Traders from the acquisition date (June 2, 2005).
(c) Certain 2005 amounts have been reclassified to conform with current-year presentation
(d) Includes a gain in Fiscal 2006 of approximately $1.3 million related to the Visa/Mastercard settement.

				Nine Months						Nine Months
				Ended						Ended
	Percent			Oct 28,			Percent			Oct 29,			Percent
(in thousands, except per share amounts)	Change			2006			of Sales (a)			2005 (b) (c)			of Sales (a)
Net sales		12.1		$	2,193,553			100.0		$	1,956,105			100.0
Cost of goods sold, buying, catalog and occupancy		13.4			1,509,779			68.8			1,331,523			68.1
Selling, general, and administrative (d)		12.0			548,179			25.0			489,280			25.0
Total operating expenses		13.0			2,057,958			93.8			1,820,803			93.1
Income from operations		0.2			135,595			6.2			135,302			6.9
Other income, principally interest		21.6			6,488			0.3			5,335			0.3
Interest expense		(14.6	)		(11,475	)		(0.5	)		(13,434	)		(0.7	)
Income before income taxes		2.7			130,608			6.0			127,203			6.5
Income tax provision		(0.8	)		46,627			2.1			47,000			2.4
Net income		4.7		$	83,981			3.8		$	80,203			4.1
Basic net income per share				$	0.69					$	0.67
Weighted average shares outstanding					122,174						119,513
Net income per share, assuming dilution				$	0.63					$	0.61
Weighted average shares and equivalents outstanding					139,571						136,634
(a) Results do not add due to rounding.
(b) Includes results from operations for Crosstown Traders from the acquisition date (June 2, 2005).
(c) Certain 2005 amounts have been reclassified to conform with current-year presentation
(d) Includes a gain in Fiscal 2006 of approximately $1.3 million related to the Visa/Mastercard settement.

CHARMING SHOPPES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	October 28,			January 28,
(In thousands, except share amounts)	2006			2006
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	138,238		$	130,132
Available-for-sale securities		3,323			20,150
Accounts receivable, net of allowances of $1,265 and $6,588		2,020			38,603
Investment in asset-backed securities		65,355			66,828
Merchandise inventories		481,449			376,409
Deferred advertising		26,208			20,591
Deferred taxes		18,546			13,848
Prepayments and other		106,451			89,245
Total current assets		841,590			755,806
Property, equipment, and leasehold improvements - at cost		947,275			888,481
Less accumulated depreciation and amortization		554,568			525,882
Net property, equipment, and leasehold improvements		392,707			362,599
Trademarks and other intangible assets		248,759			250,074
Goodwill		154,020			154,553
Other assets		47,831			43,963
Total assets	$	1,684,907		$	1,566,995
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	0		$	50,000
Accounts payable		207,566			133,236
Accrued expenses		201,101			217,421
Income taxes payable		1,008			1,743
Current portion - long-term debt		11,600			14,765
Total current liabilities		421,275			417,165
Deferred taxes		51,147			45,046
Other non-current liabilities		113,124			98,457
Long-term debt		183,653			191,979
Stockholders’ equity
Common Stock $.10 par value:
Authorized - 300,000,000 shares
Issued - 135,452,909 shares and 133,954,852 shares		13,545			13,395
Additional paid-in capital		278,302			261,077
Treasury stock at cost - 12,265,993 shares		(84,136	)		(84,136	)
Accumulated other comprehensive income/(loss)		1			(3	)
Retained earnings		707,996			624,015
Total stockholders’ equity		915,708			814,348
Total liabilities and stockholders’ equity	$	1,684,907		$	1,566,995
Certain prior-year amounts have been reclassified to conform to the current-year presentation.
Amounts are preliminary and subject to reclassifications and adjustments.

CHARMING SHOPPES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Thirty-nine Weeks Ended
	October 28,			October 29,
(In thousands)	2006			2005
Operating activities
Net income	$	83,981		$	80,203
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		66,431			60,369
Deferred income taxes		1,294			(4,420	)
Stock-based compensation		7,603			4,667
Excess tax benefits related to stock-based compensation		(2,771	)		2,365
Net (gain)/loss from disposition of capital assets		849			(785	)
Net gain from securitization activities		(761	)		(3,577	)
Changes in operating assets and liabilities
Accounts receivable		36,583			0
Merchandise inventories		(105,040	)		(118,126	)
Accounts payable		74,330			48,691
Deferred advertising		(5,617	)		(17,249	)
Prepayments and other		(17,206	)		8,902
Income taxes payable		2,036			8,963
Accrued expenses and other		(1,014	)		28,183
Net cash provided by operating activities		140,698			98,186
Investing activities
Investment in capital assets		(92,524	)		(68,177	)
Proceeds from sales of capital assets		0			2,432
Gross purchases of securities		(33,472	)		(48,507	)
Proceeds from sales of securities		52,540			17,714
Acquisition of Crosstown Traders, Inc., net of cash acquired		0			(256,702	)
Purchase of Catherines receivables portfolio		0			(56,582	)
Securitization of Catherines receivables portfolio		0			56,582
Securitization of Crosstown apparel-related receivables		0			50,000
Increase in other assets		(7,417	)		(2,455	)
Net cash used by investing activities		(80,873	)		(305,695	)
Financing activities
Proceeds from short-term borrowings		142,212			261,311
Repayments of short-term borrowings		(192,212	)		(211,311	)
Proceeds from long-term borrowings		0			50,000
Repayments of long-term borrowings		(11,491	)		(18,480	)
Payments of deferred financing costs		0			(1,371	)
Excess tax benefits related to stock-based compensation		2,771			0
Proceeds from issuance of common stock		7,001			5,987
Net cash provided/(used) by financing activities		(51,719	)		86,136
Increase (decrease) in cash and cash equivalents		8,106			(121,373	)
Cash and cash equivalents, beginning of period		130,132			273,049
Cash and cash equivalents, end of period	$	138,238		$	151,676
Non-cash financing and investing activities
Equipment acquired through capital leases	$	0		$	3,892
Certain prior-year amounts have been reclassified to conform to the current-year presentation.
Amounts are preliminary and subject to reclassifications and adjustments.