EX-99.1 2 erexhibit991q32016.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1

chicosfasbrandlogosupdatea02.jpg

Chico’s FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239) 277-6200

Chico's FAS, Inc. Reports Third Quarter Results
Cost Reduction and Operating Efficiency Initiatives Drive Significant Earnings Growth

GAAP earnings per share up $0.27 to $0.18 compared to last year
Non-GAAP earnings per share up $0.07, or 54%, to $0.20 compared to last year
Company on track to deliver double digit operating margin

Fort Myers, FL - November 22, 2016 - Chico’s FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2016 third quarter and thirty-nine weeks ended October 29, 2016.
For the thirteen weeks ended October 29, 2016 ("the third quarter"), the Company reported net income of $23.6 million, or $0.18 per diluted share, compared to a net loss of $11.6 million, or $0.09 per diluted share, for the thirteen weeks ended October 31, 2015. The Company reported third quarter 2016 adjusted net income of $26.4 million, or $0.20 adjusted earnings per diluted share, compared to adjusted net income of $17.7 million, or $0.13 adjusted earnings per diluted share, in last year’s third quarter. The adjusted results exclude EPS net charges of $0.02 in 2016 and $0.22 in 2015 related to restructuring and strategic charges and Boston Proper, as presented in the accompanying GAAP to non-GAAP reconciliation.
For the thirty-nine weeks ended October 29, 2016, the Company reported net income of $77.7 million, or $0.58 per diluted share, compared to net income of $23.0 million, or $0.16 per diluted share, for the thirty-nine weeks ended October 31, 2015. The Company reported adjusted net income of $93.2 million, or $0.70 adjusted earnings per diluted share, compared to adjusted net income of $99.7 million, or $0.70 adjusted earnings per diluted share, in 2015. The adjusted results exclude EPS net charges of $0.12 in 2016 and $0.54 in 2015 related to restructuring and strategic charges and Boston Proper, as presented in the accompanying GAAP to non-GAAP reconciliation.
Shelley Broader, CEO and President, said, "Our third quarter earnings exceeded expectations. As a result of our efforts to transform Chico’s FAS for the future, we were able to achieve significant earnings growth and are demonstrating considerable progress toward our goal of double digit operating margin. We are fully engaged in the implementation of our cost reduction and operating efficiency initiatives, and our continued progress reinforces our confidence in the company’s strategic plan. The improvements across the organization, additional recent hires, customers’ positive response to new merchandising initiatives, and other brand specific actions underway are re-energizing the company and fortifying our foundation for revenue and earnings growth and sustainable value creation.”

Net Sales
    
For the third quarter, net sales were $596.9 million compared to $645.4 million in last year’s third quarter. This decrease of 7.5% included $18.7 million related to Boston Proper. When excluding Boston Proper from fiscal 2015, net sales decreased 4.8%, primarily reflecting a decline in comparable sales of 4.9%, comprised of reduced transaction count and lower average dollar sale. Third quarter average unit retail increased with a decline in promotional activity.

Page 1



Comparable Sales
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
October 29, 2016
 
October 31, 2015
 
October 29, 2016
 
October 31, 2015
Chico's
 
(5.6
)%
 
(4.7
)%
 
(5.4
)%
 
(2.1
)%
White House Black Market
 
(5.5
)%
 
(2.0
)%
 
(3.5
)%
 
(0.8
)%
Soma
 
0.4
 %
 
(0.9
)%
 
0.6
 %
 
3.6
 %
Total Company
 
(4.9
)%
 
(3.3
)%
 
(4.0
)%
 
(1.0
)%
Gross Margin

For the third quarter, gross margin was $230.3 million, or 38.6%, compared to $249.2 million, or 38.6%, in last year’s third quarter. When excluding Boston Proper from fiscal 2015, gross margin decreased 40 basis points in fiscal 2016 compared to gross margin of $244.2 million, or 39.0% last year. This 40 basis point decrease from the 2015 adjusted gross margin rate primarily reflects an improvement in merchandise margin, which was more than offset by deleverage of occupancy costs and incentive compensation.

Selling, General and Administrative Expenses

For the third quarter, selling, general and administrative expenses (“SG&A”) were $188.4 million, or 31.6%, compared to $226.3 million, or 35.1% last year. When excluding Boston Proper from fiscal 2015, SG&A decreased $27.3 million, or 280 basis points, compared to $215.6 million, or 34.4% last year. This $27.3 million decrease is primarily due to a reduction in unproductive marketing spend and savings in store labor, partially offset by an increase in incentive compensation.
Restructuring and Strategic Charges

For the third quarter, the Company recorded pre-tax restructuring and strategic charges of $10.8 million, primarily consisting of outside services related to cost reduction and operating efficiency initiatives (the "Initiatives"). On an after-tax basis, the impact of these charges was $6.8 million, or $0.05 per diluted share.

Income Tax Expense
    
For the third quarter, the effective tax rate of 22.9% reflected an additional tax benefit on the disposition of Boston Proper's stock and the recognition of additional income tax credits. Excluding the additional tax benefit, the effective tax rate for the third quarter of 2016 would have been 36.2% compared to 37.0% in the same period last year.

Inventories

At the end of the third quarter of 2016, inventories totaled $261.3 million compared to $269.0 million last year. When excluding Boston Proper store inventories from fiscal 2015, inventories decreased $6.0 million, or 2.2%, in the third quarter of fiscal 2016 compared to $267.3 million last year, primarily reflecting improved inventory management.

Share Repurchase Program

During the third quarter of fiscal 2016, the Company repurchased 1.7 million shares for $20.0 million, at an average of $12.13 per share, under its $300.0 million share repurchase program announced in November 2015, with $183.7 million remaining under the program.


Page 2


Changes in Presentation

Commencing in fiscal 2016, store occupancy expenses and shipping expenses, historically presented in SG&A, are being presented in Cost of Goods Sold. The Company believes that these costs represent direct costs associated with the sale of its merchandise, and these changes better align the Company with its peers and better reflect how the business operates. Additionally, shipping revenue, historically presented in SG&A, is being presented in Net Sales. These adjustments were made retrospectively and all periods presented conform with this presentation.

Fiscal 2016 Fourth Quarter Outlook

The fiscal 2016 fourth quarter outlook excludes Boston Proper for comparability purposes. The Company is anticipating a low single digit comparable sales decline in the fourth quarter compared to last year. We expect improvement in merchandise margin to be more than offset by occupancy deleverage, resulting in a reduction in gross margin rate. We continue to make progress on our Initiatives and expect a decrease in SG&A as a percent of sales; however, the reduction in marketing spend will be at a lower level than recognized in the third quarter. Fourth quarter total inventory is planned to be lower than last year.

ABOUT CHICO’S FAS, INC.

The Company, through its brands – Chico's, White House Black Market, and Soma is a leading omni-channel specialty retailer of women’s private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing items.

As of October 29, 2016, the Company operated 1,510 stores in the US and Canada and sold merchandise through franchise locations in Mexico. The Company’s merchandise is also available at www.chicos.com, www.whbm.com, and www.soma.com. For more detailed information on Chico's FAS, Inc., please go to our corporate website at www.chicosfas.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 
Some statements herein may be “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our current views with respect to certain events that could have an effect on our future financial performance, including but without limitation, statements regarding our plans, objectives, and the future success of our store concepts, the implementation and success of our previously announced restructuring program and organizational redesign, and the implementation and success of our strategies to increase the our brands’ sales volume and profitability through four previously announced focus areas. These statements may address items such as expectations for future sales, gross margin, SG&A (particularly estimated expected savings), operating margin, inventory levels, comparable store sales and cash needs, as well as , planned store openings, closings and expansions. These statements relate to expectations concerning matters that are not historical fact and may include the words or phrases such as “expects,” “believes,” “anticipates,” “plans,” “estimates,” “approximately,” “our planning assumptions,” “future outlook,” and similar expressions. Except for historical information, matters discussed in such oral and written statements are forward-looking statements. These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and are subject to various risks and uncertainties that could cause actual results to differ materially from historical results or those currently anticipated. Although we believe our expectations are based on reasonable estimates and assumptions, we cannot guarantee their accuracy or our future performance, and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Accordingly, there is no assurance that our expectations will, in fact, occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, general economic and business conditions, conditions in the specialty retail or apparel industries, the availability of quality store sites, the ability to successfully execute our business strategies, the ability to achieve the results of our restructuring program, the ability to achieve the results of our four focus areas, particularly the results expected from our current strategic projects related to those focus areas, the integration of our new management team, and those other factors described in Item 1A, “Risk Factors” and in the “Forward-Looking Statements” disclosure in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Investors using forward-looking statements are encouraged to review the Company’s latest annual report on Form 10-K, its filings on Form 10-Q, management's discussion and analysis in the Company’s latest annual report to stockholders, the Company’s filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company’s business, results of operations and financial condition. All written or oral forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice. The Company does not undertake to publicly update or revise its forward looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.



(Financial Tables Follow)


Page 3


Executive Contact:
Jennifer Powers
Vice President – Investor Relations
Chico’s FAS, Inc.
(239) 346-4199

Page 4




Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
(in thousands, except per share amounts)


 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
October 29, 2016
 
October 31, 2015
 
October 29, 2016
 
October 31, 2015
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
Net sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chico's
$
312,203

 
52.3

 
$
333,421

 
51.7

 
$
995,067

 
53.0

 
$
1,058,697

 
52.2

White House Black Market
210,389

 
35.2

 
220,965

 
34.2

 
633,420

 
33.8

 
659,682

 
32.5

Soma
74,320

 
12.5

 
72,349

 
11.2

 
247,134

 
13.2

 
240,347

 
11.8

Boston Proper

 
0.0

 
18,698

 
2.9

 

 
0.0

 
70,299

 
3.5

Total net sales
596,912

 
100.0

 
645,433

 
100.0

 
1,875,621

 
100.0

 
2,029,025

 
100.0

Cost of goods sold
366,618

 
61.4

 
396,270

 
61.4

 
1,142,182

 
60.9

 
1,219,543

 
60.1

Gross margin
230,294

 
38.6

 
249,163

 
38.6

 
733,439

 
39.1

 
809,482

 
39.9

Selling, general and administrative expenses
188,350

 
31.6

 
226,256

 
35.1

 
583,117

 
31.1

 
661,491

 
32.6

Goodwill and intangible impairment charges

 
0.0

 
45,514

 
7.1

 

 
0.0

 
112,455

 
5.6

Restructuring and strategic charges
10,820

 
1.8

 
3,137

 
0.4

 
31,027

 
1.6

 
34,178

 
1.6

Income (loss) from operations
31,124

 
5.2

 
(25,744
)
 
(4.0
)
 
119,295

 
6.4

 
1,358

 
0.1

Interest expense, net
(526
)
 
(0.1
)
 
(466
)
 
(0.1
)
 
(1,474
)
 
(0.1
)
 
(1,421
)
 
(0.1
)
Income (loss) before income taxes
30,598

 
5.1

 
(26,210
)
 
(4.1
)
 
117,821

 
6.3

 
(63
)
 
0.0

Income tax provision (benefit)
7,000

 
1.1

 
(14,600
)
 
(2.3
)
 
40,100

 
2.2

 
(23,100
)
 
(1.1
)
Net income (loss)
$
23,598

 
4.0

 
$
(11,610
)
 
(1.8
)
 
$
77,721

 
4.1

 
$
23,037

 
1.1

Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) per common share-basic
$
0.18

 
 
 
$
(0.09
)
 
 
 
$
0.59

 
 
 
$
0.16

 
 
Net income (loss) per common and common equivalent share–diluted
$
0.18

 
 
 
$
(0.09
)
 
 
 
$
0.58

 
 
 
$
0.16

 
 
Weighted average common shares outstanding–basic
128,753

 
 
 
136,172

 
 
 
129,830

 
 
 
139,386

 
 
Weighted average common and common equivalent shares outstanding–diluted
128,996

 
 
 
136,172

 
 
 
129,999

 
 
 
139,724

 
 
Dividends declared per share
$

 
 
 
$

 
 
 
$
0.2400

 
 
 
$
0.2325

 
 

Page 5




Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)


 
October 29, 2016
 
January 30, 2016
 
October 31, 2015
 
 
 
 
 
 
ASSETS
 
 
 
 
 
Current Assets:
 
 
 
 
 
Cash and cash equivalents
$
80,331

 
$
89,951

 
$
91,256

Marketable securities, at fair value
50,411

 
50,194

 
47,316

Inventories
261,341

 
233,834

 
268,968

Prepaid expenses and other current assets
46,635

 
45,660

 
55,149

Income taxes receivable
3,402

 
29,157

 
16,225

Assets held for sale
18,520

 
16,525

 
41,802

Total Current Assets
460,640

 
465,321

 
520,716

Property and Equipment, net
495,587

 
550,953

 
556,172

Other Assets:
 
 
 
 
 
Goodwill
96,774

 
96,774

 
96,774

Other intangible assets, net
38,930

 
38,930

 
38,930

Other assets, net
18,382

 
14,074

 
40,622

Total Other Assets
154,086

 
149,778

 
176,326

 
$
1,110,313

 
$
1,166,052

 
$
1,253,214

 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
Accounts payable
$
125,532

 
$
129,343

 
$
147,526

Current debt
10,000

 
10,000

 
10,000

Other current and deferred liabilities
148,706

 
158,788

 
140,557

Liabilities held for sale

 

 
8,478

Total Current Liabilities
284,238

 
298,131

 
306,561

Noncurrent Liabilities:
 
 
 
 
 
Long-term debt
74,768

 
82,219

 
84,702

Deferred liabilities
122,848

 
130,743

 
135,390

Deferred taxes
9,320

 
15,171

 
20,385

Total Noncurrent Liabilities
206,936

 
228,133

 
240,477

Commitments and Contingencies
 
 
 
 
 
Stockholders’ Equity:
 
 
 
 
 
Preferred stock

 

 

Common stock
1,301

 
1,355

 
1,394

Additional paid-in capital
445,787

 
435,881

 
429,746

Treasury stock, at cost
(366,081
)
 
(289,813
)
 
(249,854
)
Retained earnings
538,134

 
492,325

 
524,244

Accumulated other comprehensive (loss) income
(2
)
 
40

 
646

Total Stockholders’ Equity
619,139

 
639,788

 
706,176

 
$
1,110,313

 
$
1,166,052

 
$
1,253,214



Page 6




Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Statements
(Unaudited)
(in thousands)


 
Thirty-Nine Weeks Ended
 
October 29, 2016
 
October 31, 2015
Cash Flows From Operating Activities:
 
 
 
Net income
$
77,721

 
$
23,037

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Goodwill and intangible impairment charges, pre-tax

 
112,455

Depreciation and amortization
82,585

 
90,266

Loss on disposal and impairment of property and equipment
6,434

 
22,609

Deferred tax benefit
(8,098
)
 
(52,623
)
Stock-based compensation expense
15,483

 
20,712

Excess tax benefit from stock-based compensation
(322
)
 
(2,992
)
Deferred rent and lease credits
(14,264
)
 
(15,018
)
Changes in assets and liabilities:
 
 
 
Inventories
(27,506
)
 
(44,811
)
Prepaid expenses and accounts receivable
(6,237
)
 
(12,024
)
Income tax receivable
25,755

 
(15,629
)
Accounts payable
(3,789
)
 
7,377

Accrued and other liabilities
(3,391
)
 
(3,300
)
Net cash provided by operating activities
144,371

 
130,059

Cash Flows From Investing Activities:
 
 
 
Purchases of marketable securities
(43,266
)
 
(43,479
)
Proceeds from sale of marketable securities
43,058

 
122,712

Purchases of property and equipment, net
(35,663
)
 
(66,595
)
Net cash (used in) provided by investing activities
(35,871
)
 
12,638

Cash Flows From Financing Activities:
 
 
 
Proceeds from borrowings

 
124,000

Payments on borrowings
(7,500
)
 
(29,000
)
Proceeds from issuance of common stock
2,363

 
10,614

Excess tax benefit from stock-based compensation
322

 
2,992

Dividends paid
(31,936
)
 
(32,933
)
Repurchase of common stock
(81,324
)
 
(260,555
)
Net cash used in financing activities
(118,075
)
 
(184,882
)
Effects of exchange rate changes on cash and cash equivalents
(45
)
 
90

Net decrease in cash and cash equivalents
(9,620
)
 
(42,095
)
Cash and Cash Equivalents, Beginning of period
89,951

 
133,351

Cash and Cash Equivalents, End of period
$
80,331

 
$
91,256


Page 7




Supplemental Detail on Earnings Per Share Calculation

In accordance with accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of earnings per common share pursuant to the “two-class” method. For the Company, participating securities are composed entirely of unvested restricted stock awards and performance-based restricted stock units (“PSUs”) that have met their relevant performance criteria.

Earnings per share is determined using the two-class method when it is more dilutive than the treasury stock method. Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of potential common shares from non-participating securities such as stock options and PSUs. For the thirty-nine weeks ended October 29, 2016 and October 31, 2015, potential common shares were excluded from the computation of diluted EPS to the extent they were antidilutive.

The following unaudited table sets forth the computation of basic and diluted earnings per share shown on the face of the accompanying condensed consolidated statements of operations (in thousands, except per share amounts):

 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
October 29, 2016
 
October 31, 2015
 
October 29, 2016
 
October 31, 2015
 
 
 
 
 
 
 
 
 
Numerator
 
 
 
 
 
 
 
 
Net income (loss)
 
$
23,598

 
$
(11,610
)
 
$
77,721

 
$
23,037

Net income and dividends declared allocated to participating securities
 
(502
)
 

 
(1,677
)
 
(492
)
Net income (loss) available to common shareholders
 
$
23,096

 
$
(11,610
)
 
$
76,044

 
$
22,545

 
 
 
 
 
 
 
 
 
Denominator
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – basic
 
128,753

 
136,172

 
129,830

 
139,386

Dilutive effect of non-participating securities
 
243

 

 
169

 
338

Weighted average common and common equivalent shares outstanding – diluted
 
128,996

 
136,172

 
129,999

 
139,724

 
 
 
 
 
 
 
 
 
Net income (loss) per common share(1)
 
 
 
 
 
 
 
 
Basic
 
$
0.18

 
$
(0.09
)
 
$
0.59

 
$
0.16

Diluted
 
$
0.18

 
$
(0.09
)
 
$
0.58

 
$
0.16


(1) Due to the differences between quarterly and year-to-date weighted average share counts and the effect of quarterly rounding to the nearest cent per diluted share, the year-to-date calculation of generally accepted accounting principles ("GAAP") diluted EPS may not equal the sum of the quarters.

Page 8






SEC Regulation G - The Company reports its consolidated financial results in accordance with GAAP. However, to supplement these consolidated financial results, management believes that certain non-GAAP results, which exclude charges and results related to non-continuing Boston Proper operations as well as certain strategic charges, may provide a more meaningful measure on which to compare the Company’s results of operations between periods. The Company believes these non-GAAP results provide useful information to both management and investors by excluding certain expenses that impact the comparability of the results.

A reconciliation of net income and earnings per diluted share on a GAAP basis to net income and earnings per diluted share on a non-GAAP adjusted basis is presented in the table below:

Chico’s FAS, Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliation of Net Income (Loss) and Diluted EPS
(Unaudited)
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
October 29, 2016
 
October 31, 2015
 
October 29, 2016
 
October 31, 2015
Net income (loss): (1)
 
 
 
 
 
 
 
 
GAAP basis
 
$
23,598

 
$
(11,610
)
 
$
77,721

 
$
23,037

Goodwill and other intangible impairment charges
 

 
23,859

 

 
70,985

Restructuring and strategic charges
 
6,806

 
1,948

 
19,422

 
21,225

Boston Proper operating loss
 

 
3,502

 

 
8,239

Tax benefit related to the disposition of Boston Proper
 
(3,979
)
 

 
(3,979
)
 
(23,779
)
Non-GAAP adjusted basis
 
$
26,425

 
$
17,699

 
$
93,164

 
$
99,707

 
 
 
 
 
 
 
 
 
Net income (loss) per diluted share: (1) (2)
 
 
 
 
 
 
 
 
GAAP basis
 
$
0.18

 
$
(0.09
)
 
$
0.58

 
$
0.16

Goodwill and other intangible impairment charges
 
0.00

 
0.18

 
0.00

 
0.50

Restructuring and strategic charges
 
0.05

 
0.01

 
0.15

 
0.15

Boston Proper operating loss
 
0.00

 
0.03

 
0.00

 
0.06

Tax benefit related to the disposition of Boston Proper
 
(0.03
)
 
0.00

 
(0.03
)
 
(0.17
)
Non-GAAP adjusted basis
 
$
0.20

 
$
0.13

 
$
0.70

 
$
0.70


(1) All adjustments to net income (loss) are presented net of tax.
(2) Due to the differences between quarterly and year-to-date weighted average share counts and the effect of quarterly rounding to the nearest cent per diluted share, the year-to-date calculation of non-GAAP diluted EPS may not equal the sum of the quarters.


Page 9




SEC Regulation G - The Company reports its consolidated financial results in accordance with GAAP. However, to supplement these consolidated financial results, management believes that certain non-GAAP results, which exclude results from non-continuing Boston Proper operations, may provide a more meaningful measure on which to compare the Company’s results of operations between periods.

The tables below present a reconciliation of selected consolidated financial data on a GAAP basis to selected consolidated financial data on a non-GAAP adjusted basis, reflecting certain adjustments as identified in the footnotes to the table and excluding Boston Proper:
Chico's FAS, Inc. and Subsidiaries
Fiscal 2015 Reconciliation of Reported to Adjusted Selected Non-GAAP Consolidated Financial Data
(Unaudited)
(in thousands)
 
 
 
 
 
 
 
 
As Reported
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
October 31, 2015
 
October 31, 2015
 
Amount
 
% of Sales
 
Amount
 
% of Sales
Net Sales
$
641,219

 
100.0

 
$
2,014,909

 
100.0

Cost of goods sold
290,737

 
45.3

 
902,689

 
44.8

Gross margin
350,482

 
54.7

 
1,112,220

 
55.2

Selling, general and administrative expenses
327,575

 
51.1

 
964,229

 
47.9

Subtotal
22,907

 
3.6

 
147,991

 
7.3

 
Boston Proper
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
October 31, 2015
 
October 31, 2015
 
Amount
 
% of Sales
 
Amount
 
% of Sales
Net Sales
$
17,312

 
100.0

 
$
65,301

 
100.0

Cost of goods sold
11,486

 
66.3

 
38,073

 
58.3

Gross margin
5,826

 
33.7

 
27,228

 
41.7

Selling, general and administrative expenses
11,466

 
66.2

 
40,495

 
62.0

Subtotal
(5,640
)
 
(32.5
)
 
(13,267
)
 
(20.3
)
 
Adjustments, excluding Boston Proper
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
October 31, 2015
 
October 31, 2015
 
Amount
 
% of Sales
 
Amount
 
% of Sales
Net Sales(1)
$
2,828

 
0.4

 
$
9,118

 
0.5

Store occupancy expense(2)
95,583

 
14.8

 
284,141

 
14.1

Shipping expense(3)
7,710

 
1.2

 
23,504

 
1.2

Cost of goods sold
103,293

 
16.0

 
307,645

 
15.3

Gross margin
(100,465
)
 
(15.6
)
 
(298,527
)
 
(14.8
)
Selling, general and administrative expenses
(100,465
)
 
(15.6
)
 
(298,527
)
 
(14.8
)
Subtotal

 

 

 

 
As Adjusted, Non-GAAP
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
October 31, 2015
 
October 31, 2015
 
Amount
 
% of Sales
 
Amount
 
% of Sales
Net Sales
$
626,735

 
100.0

 
$
1,958,726

 
100.0

Cost of goods sold
382,544

 
61.0

 
1,172,261

 
59.8

Gross margin
244,191

 
39.0

 
786,465

 
40.2

Selling, general and administrative expenses
215,644

 
34.4

 
625,207

 
31.9

Subtotal
28,547

 
4.6

 
161,258

 
8.3

 
 
 
 
 
 
 
 
(1) Adjustments to net sales represent the correction of an immaterial error in the classification of shipping revenue, which was previously classified within SG&A.
(2) Adjustments to store occupancy expense represent the reclassification of store occupancy expenses, which were previously classified within SG&A.
(3) Adjustments to shipping expense represent a change in accounting policy to present shipping expenses within cost of goods sold, which were previously reported within SG&A.


Page 10






Chico's FAS, Inc. and Subsidiaries
Store Count and Square Footage
Thirteen Weeks Ended October 29, 2016
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
July 30, 2016
 
New Stores
 
Closures
 
October 29, 2016
 
 
Store count:
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
599

 
1

 
(6
)
 
594

 
 
Chico’s outlets
117

 

 

 
117

 
 
Chico's Canada
4

 

 

 
4

 
 
WHBM frontline boutiques
427

 

 
(2
)
 
425

 
 
WHBM outlets
71

 

 

 
71

 
 
WHBM Canada
6

 

 

 
6

 
 
Soma frontline boutiques
274

 

 

 
274

 
 
Soma outlets
19

 

 

 
19

 
 
Total Chico’s FAS, Inc.
1,517

 
1

 
(8
)
 
1,510

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 30, 2016
 
New Stores
 
Closures
 
Other changes in SSF
 
October 29, 2016
Net selling square footage (SSF):
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
1,638,071

 
2,444

 
(16,562
)
 
279

 
1,624,232

Chico’s outlets
293,646

 

 

 

 
293,646

Chico's Canada
9,695

 

 

 

 
9,695

WHBM frontline boutiques
993,320

 

 
(3,247
)
 
196

 
990,269

WHBM outlets
148,457

 

 

 

 
148,457

WHBM Canada
14,891

 

 

 

 
14,891

Soma frontline boutiques
517,994

 

 

 

 
517,994

Soma outlets
35,637

 

 

 

 
35,637

Total Chico’s FAS, Inc.
3,651,711

 
2,444

 
(19,809
)
 
475

 
3,634,821


As of October 29, 2016 the Company also sold merchandise through 88 international franchise locations, comprised of 7 Chico's stand-alone boutiques, 50 Chico's shop-in-shops, and 31 Soma shop-in-shops.


Page 11




Chico's FAS, Inc. and Subsidiaries
Store Count and Square Footage
Thirty-Nine Weeks Ended October 29, 2016
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
January 30, 2016
 
New Stores
 
Closures
 
October 29, 2016
 
 
Store count:
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
604

 
3

 
(13
)
 
594

 
 
Chico’s outlets
117

 

 

 
117

 
 
Chico's Canada
4

 

 

 
4

 
 
WHBM frontline boutiques
429

 
3

 
(7
)
 
425

 
 
WHBM outlets
71

 

 

 
71

 
 
WHBM Canada
6

 

 

 
6

 
 
Soma frontline boutiques
269

 
6

 
(1
)
 
274

 
 
Soma outlets
18

 
1

 

 
19

 
 
Total Chico’s FAS, Inc.
1,518

 
13

 
(21
)
 
1,510

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
January 30, 2016
 
New Stores
 
Closures
 
Other changes in SSF
 
October 29, 2016
Net selling square footage (SSF):
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
1,652,991

 
7,556

 
(35,960
)
 
(355
)
 
1,624,232

Chico’s outlets
293,646

 

 

 

 
293,646

Chico's Canada
9,695

 

 

 

 
9,695

WHBM frontline boutiques
991,164

 
6,921

 
(13,547
)
 
5,731

 
990,269

WHBM outlets
148,457

 

 

 

 
148,457

WHBM Canada
14,891

 

 

 

 
14,891

Soma frontline boutiques
507,805

 
11,008

 
(1,562
)
 
743

 
517,994

Soma outlets
33,792

 
1,845

 

 

 
35,637

Total Chico’s FAS, Inc.
3,652,441

 
27,330

 
(51,069
)
 
6,119

 
3,634,821


As of October 29, 2016 the Company also sold merchandise through 88 international franchise locations, comprised of 7 Chico's stand-alone boutiques, 50 Chico's shop-in-shops, and 31 Soma shop-in-shops.


Page 12