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): August 18, 2010

Chico’s FAS, Inc.

(Exact Name of Registrant as Specified in its Charter)

Florida
(State or Other Jurisdiction of Incorporation)

001-16435	59-2389435
(Commission File Number)	(IRS Employer Identification No.)

11215 Metro Parkway, Fort Myers, Florida	33966
(Address of Principal Executive Offices)	(Zip code)

(239) 277-6200
(Registrant’s Telephone Number, Including Area Code)
(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 (see General Instruction A.2. below):

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 August 18, 2010, Chico’s FAS, Inc. (the “Company”) issued a press release announcing its second quarter and six-month earnings for the period ending July 31, 2010. A copy of the release issued on August 18, 2010 is attached to this Report as Exhibit 99.1 and is incorporated by reference herein.

Item 8.01. Other Events

     On August 18, 2010, the Company also announced that its Board of Directors had recently approved the repurchase of up to $200 million of the Company’s outstanding common stock.

Item 9.01. Financial Statements and Exhibits

     (d)Exhibits:

Exhibit 99.1 Press Release of Chico’s FAS, Inc. dated August 18, 2010

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.

	CHICO’S FAS, INC.
Date: August 18, 2010	By:	/s/ Kent A. Kleeberger
		Kent A. Kleeberger, Executive Vice President —
		Chief Financial Officer and Treasurer

INDEX TO EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release of Chico’s FAS, Inc. dated August 18, 2010

EX-99.1

Exhibit 99.1

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

For Immediate Release

Executive Contact:
Robert C. Atkinson
Vice President-Investor Relations
Chico’s FAS, Inc.
(239) 274-4199

Chico’s FAS, Inc. Reports Second Quarter Earnings Per Share of $0.17 vs. $0.08

• Board authorizes $200 million share repurchase program

          Fort Myers, FL — August 18, 2010 — Chico’s FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2010 second quarter and six months ended July 31, 2010.

Net Income and Earnings per Share

          The Company reported net income of $30.5 million, or $0.17 per diluted share for the second quarter compared to net income of $14.9 million, or $0.08 per diluted share for last year’s second quarter. The second quarter 2009 results included non-cash impairment charges totaling approximately $3.1 million, net of tax. Excluding impairment charges, the Company’s net income for the second quarter of 2009 would have been $18.0 million, or $0.10 per diluted share.

          For the six months ended July 31, 2010, the Company reported net income of $65.9 million or $0.37 per diluted share, compared to net income of $29.4 million, or $0.17 per diluted share in the first six months of the prior year. Excluding impairment charges recorded in both years, the Company’s net income would have been $66.4 million, or $0.37 per diluted share, for the first six months in 2010 compared to net income of $37.6 million, or $0.21 per diluted share for the comparable period last year.

Sales

          Net sales for the quarter increased 10.8% to $465.4 million from $419.9 million in last year’s second quarter. Consolidated comparable store sales increased 6.4% for the quarter compared to a 1.3% increase for the like period last year. The Chico’s/Soma Intimates brands’ comparable store sales increased 4.3% compared to a 0.4% increase for the like period last year, and the White House | Black Market (“WH|BM”) brand’s comparable store sales increased 11.2% compared to a 3.7% increase for the same period last year. Direct-to-consumer sales, not included in comparable store sales, increased approximately 36%, to $27.6 million for the 2010 second quarter over last year’s second quarter.

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Gross Margin

          Gross margin for the quarter increased 12.2% to $259.2 million from $231.0 million in last year’s second quarter. Gross margin, expressed as a percentage of net sales, increased 70 basis points to 55.7% from 55.0% in the last year’s second quarter. The gross margin rate improvement was primarily attributable to higher margins for the WH|BM brand and continued gross margin improvement at Chico’s outlet stores resulting from increased penetration of made-for-outlet product. These improvements were partially offset by decreased merchandise margins at Chico’s front-line stores primarily due to higher markdowns in the month of July.

Selling, General and Administrative Expenses

          Selling, general and administrative expenses (“SG&A”) for the quarter increased to $211.8 million from $207.0 million in last year’s second quarter. SG&A dollars increased primarily due to higher store and direct operating costs associated with approximately 50 net new stores opened since last year’s second quarter and the planned increase in marketing expenses. As a percentage of net sales, SG&A for the quarter decreased 380 basis points compared to last year’s second quarter. Excluding the impairment charges recognized in the second quarter of last year, the SG&A rate improved 260 basis points as a percentage of net sales due primarily to the leverage resulting from the comparable store sales increase.

          Store and direct operating expenses increased by $7.7 million in the second quarter, primarily due to increased occupancy expense, store labor costs, and higher credit card fees associated with approximately 50 net new opened stores over last year and higher sales volume versus last year. However, expressed as a percentage of net sales, store and direct operating expenses decreased 200 basis points due to the leverage resulting from the comparable store sales increase.

          Marketing expenses increased $1.8 million in the second quarter primarily due to increased television, online and print media campaigns.

Inventories

          End of quarter inventory increased $16.7 million or approximately 12.8% from last year’s second quarter. Excluding an incremental $6.8 million of in-transit inventories and inventory earmarked for 18 net new stores slated for third quarter over last year, inventories per selling square foot were up only 1.4% over the end of second quarter last year.

Cash and Marketable Securities

          Cash and marketable securities at the end of the quarter increased to $487.4 million from $377.5 million at the end of the second quarter fiscal 2009 and from $423.5 million as of the end of fiscal 2009.

Cash Flow

          Net cash provided by operating activities for the first six months of 2010 decreased by $34.4 million over the same period last year primarily due to changes in working capital offset by higher net income. For the first half of fiscal 2010, the Company’s capital expenditures totaled $34.4 million compared to $36.2 million for the same period last year.

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          Share Repurchase Program

     The Board of Directors recently authorized the repurchase of up to $200 million of the Company’s outstanding common stock, through January 2013. Repurchases under the program will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18. The Company intends to fund the repurchase program from cash on hand and retire any shares repurchased. The Company, however, has no obligation to repurchase shares under this authorization, and the timing, actual number and value of shares to be purchased will depend on the performance of Chico’s stock price and other market conditions.

ABOUT CHICO’S FAS, INC.
The Company is a women’s specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,128 specialty stores, including stores in 48 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico.

The Chico’s brand currently operates 598 boutique and 55 outlet stores, publishes a catalog during key shopping periods throughout the year, and conducts e-commerce at www.chicos.com.

White House | Black Market currently operates 339 boutique and 18 outlet stores, publishes a catalog highlighting its latest fashions and conducts e-commerce at www.whbm.com.

Soma Intimates is the Company’s developing concept with 110 boutique stores and 8 outlet stores today. Soma Intimates also publishes a catalog for its customers and conducts e-commerce at www.soma.com.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of 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. 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.

For more detailed information on Chico’s FAS, Inc., please go to our corporate website, www.chicosfas.com.

(Financial Tables Follow)

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Chico’s FAS, Inc.
Consolidated Statements of Income
(Unaudited)

(in thousands, except per share amounts)

	Twenty-Six Weeks Ended								Thirteen Weeks Ended
	July 31, 2010				August 1, 2009				July 31, 2010				August 1, 2009
	Amount		% of Sales		Amount		% of Sales		Amount		% of Sales		Amount			% of Sales
Net Sales:
Chico’s/Soma Intimates	$	656,360		69.3	$	582,524		70.1	$	319,660		68.7	$	294,602			70.2
White House | Black Market		290,599		30.7		248,033		29.9		145,711		31.3		125,313			29.8
Net sales		946,959		100.0		830,557		100.0		465,371		100.0		419,915			100.0
Cost of goods sold		406,173		42.9		366,128		44.1		206,164		44.3		188,874			45.0
Gross margin		540,786		57.1		464,429		55.9		259,207		55.7		231,041			55.0
Selling, general and administrative expenses:
Store and direct operating expenses		332,679		35.1		317,375		38.2		164,853		35.4		157,180			37.4
Marketing		47,091		5.0		34,002		4.1		18,011		3.9		16,168			3.9
National Store Support Center		57,782		6.1		54,235		6.5		28,982		6.2		28,701			6.8
Impairment charges		822		0.1		13,026		1.6		—		—		4,968			1.2
Total selling, general and administrative expenses		438,374		46.3		418,638		50.4		211,846		45.5		207,017			49.3
Income from operations		102,412		10.8		45,791		5.5		47,361		10.2		24,024			5.7
Interest income (expense), net		844		0.1		1,003		0.1		394		0.0		(19	)		0.0
Income before income taxes		103,256		10.9		46,794		5.6		47,755		10.2		24,005			5.7
Income tax provision		37,400		3.9		17,400		2.1		17,300		3.7		9,100			2.2
Net income	$	65,856		7.0	$	29,394		3.5	$	30,455		6.5	$	14,905			3.5
Per share data:
Net income per common share-basic	$	0.37			$	0.17			$	0.17			$	0.08
Net income per common & common equivalent share—diluted	$	0.37			$	0.17			$	0.17			$	0.08
Weighted average common shares outstanding—basic		177,417				177,192				177,499				177,228
Weighted average common & common equivalent shares outstanding—diluted		178,807				178,021				178,774				178,566
Dividends declared per share	$	0.12				—			$	0.04				—

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Chico’s FAS, Inc.
Consolidated Balance Sheets
(in thousands)

	July 31,			January 30,			August 1,
	2010			2010			2009
	(Unaudited)						(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	17,559		$	37,043		$	44,143
Marketable securities, at fair value		469,829			386,500			333,367
Receivables		7,483			3,922			6,110
Income tax receivable		657			312			1,156
Inventories		146,899			138,516			130,238
Prepaid expenses		27,018			24,023			26,088
Deferred taxes		9,823			9,664			15,555
Total Current Assets		679,268			599,980			556,657
Property and Equipment:
Land and land improvements		42,080			21,978			20,293
Building and building improvements		85,628			82,169			83,600
Equipment, furniture and fixtures		406,682			388,392			385,503
Leasehold improvements		418,585			412,834			416,003
Total Property and Equipment		952,975			905,373			905,399
Less accumulated depreciation and amortization		(425,498	)		(383,844	)		(367,151	)
Property and Equipment, Net		527,477			521,529			538,248
Other Assets:
Goodwill		96,774			96,774			96,774
Other intangible assets		38,930			38,930			38,930
Deferred taxes		39,597			36,321			38,261
Other assets, net		4,940			25,269			27,131
Total Other Assets		180,241			197,294			201,096
	$	1,386,986		$	1,318,803		$	1,296,001
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	101,584		$	79,219		$	82,827
Accrued liabilities		93,603			95,862			108,719
Current portion of deferred liabilities		19,681			19,625			19,160
Total Current Liabilities		214,868			194,706			210,706
Noncurrent Liabilities:
Deferred liabilities		137,437			142,179			152,800
Stockholders’ Equity:
Common stock		1,789			1,781			1,774
Additional paid-in capital		276,000			268,109			259,331
Retained earnings		756,043			711,624			671,372
Other accumulated comprehensive income		849			404			18
Total Stockholders’ Equity		1,034,681			981,918			932,495
	$	1,386,986		$	1,318,803		$	1,296,001

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Chico’s FAS, Inc.
Consolidated Cash Flow Statements
(Unaudited)

(in thousands)

	Twenty-Six Weeks Ended
	July 31,			August 1,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	65,856		$	29,394
Adjustments to reconcile net income to net cash provided by operating activities —
Depreciation and amortization		46,636			48,630
Deferred tax (benefit) expense		(3,628	)		2,501
Stock-based compensation expense		5,950			4,177
Excess tax benefit from stock-based compensation		(1,011	)		(115	)
Impairment charges		822			13,026
Deferred rent expense, net		(4,361	)		(5,787	)
Loss on disposal of property and equipment		992			711
(Increase) decrease in assets —
Receivables, net		(3,578	)		2,048
Income tax receivable		(346	)		10,550
Inventories		(8,382	)		2,175
Prepaid expenses and other		(2,666	)		(4,416	)
Increase (decrease) in liabilities —
Accounts payable		15,210			26,285
Accrued and other deferred liabilities		(1,574	)		15,183
Total adjustments		44,064			114,968
Net cash provided by operating activities		109,920			144,362
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		(82,884	)		(91,331	)
Purchases of property and equipment		(34,380	)		(36,235	)
Net cash used in investing activities		(117,264	)		(127,566	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		1,378			773
Excess tax benefit from stock-based compensation		1,011			115
Dividends paid		(14,282	)		—
Repurchase of common stock		(247	)		(90	)
Net cash (used in) provided by financing activities		(12,140	)		798
Net (decrease) increase in cash and cash equivalents		(19,484	)		17,594
CASH AND CASH EQUIVALENTS, Beginning of period		37,043			26,549
CASH AND CASH EQUIVALENTS, End of period	$	17,559		$	44,143

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SEC Regulation G — The Company reports its consolidated financial results in accordance with generally accepted accounting principles (GAAP). However, to supplement these consolidated financial results, management believes that certain non-GAAP operating results, which exclude impairment and certain other non-recurring 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 basis is presented in the table below:

Chico’s FAS, Inc.

Non-GAAP to GAAP Reconciliation of Net Income and Diluted EPS
(in thousands, except per share amounts)

	Twenty-Six Weeks Ended						Thirteen Weeks Ended
	July 31, 2010			August 1, 2009			July 31, 2010		August 1, 2009
Net income:
GAAP basis	$	65,856		$	29,394		$	30,455	$	14,905
Add: Impact of impairment charges		822			13,026			—		4,968
Less: Tax effect on impairment charges		(298	)		(4,846	)		—		(1,883	)
Non-GAAP adjusted basis	$	66,380		$	37,574		$	30,455	$	17,990
Net income per diluted share:
GAAP basis	$	0.37		$	0.17		$	0.17	$	0.08
Add: Impact of impairment charges, net of tax		0.00			0.04			—		0.02
Non-GAAP adjusted basis	$	0.37		$	0.21		$	0.17	$	0.10

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Chico’s FAS, Inc.
Boutique Count and Square Footage
As of July 31, 2010

	As of		New					As of
	5/1/2010		Stores		Closures			7/31/2010
Store count:
Chico’s frontline boutiques		598		2		(2	)		598
Chico’s outlets		50		3		—			53
WH|BM frontline boutiques		334		3		—			337
WH|BM outlets		17		1		—			18
Soma frontline boutiques		95		10		—			105
Soma outlets		5		2		—			7
Total Chico’s FAS		1,099		21		(2	)		1,118
								Remodels/
								Relos and
	As of		New					change in			As of
	5/1/2010		Stores		Closures			SSF			7/31/2010
Net selling square footage:
Chico’s frontline boutiques		1,608,645		3,349		(3,775	)		(1,521	)		1,606,698
Chico’s outlets		135,820		6,555		—			—			142,375
WH|BM frontline boutiques		687,485		6,468		—			2,065			696,018
WH|BM outlets		32,712		1,979		—			—			34,691
Soma frontline boutiques		183,816		21,469		—			(538	)		204,747
Soma outlets		9,277		3,569		—			—			12,846
Total Chico’s FAS		2,657,755		43,389		(3,775	)		6			2,697,375

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