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    Chico's FAS, Inc. Reports Second Quarter Results

    8/29/23 6:45:00 AM ET
    $CHS
    Clothing/Shoe/Accessory Stores
    Consumer Discretionary
    Get the next $CHS alert in real time by email

    FORT MYERS, Fla., Aug. 29, 2023 /PRNewswire/ --

    Chico's FAS Logo. (PRNewsFoto/Chico's FAS, Inc.) (PRNewsFoto/)

    • Reported second quarter diluted EPS of $0.49; adjusted diluted EPS of $0.28
    • Delivered total Company net sales of $545 million, in line with outlook
    • Generated 8.5% operating margin with solid gross margin and disciplined expense management
    • Strengthened balance sheet, ending quarter with $151 million in cash and marketable securities, and year-over-year debt reduction of $75 million

    Chico's FAS, Inc. (NYSE:CHS) ("Company" or "Chico's FAS") today announced its financial results for the thirteen weeks ended July 29, 2023 ("second quarter"). The Company also provided its fiscal 2023 third quarter outlook and updated its full-year outlook.

    Molly Langenstein, Chico's FAS Chief Executive Officer and President, commented, "We delivered another quarter of strong operating income and earnings performance, which was consistent with our outlook.

    "For all three brands, full-priced sales remained healthy, we attracted new customers, and we gained market share. Total Company average dollar spend and units per transaction increased, and we increased average unit retail at Chico's and Soma. Our apparel customers continued to buy head-to-toe dressing, and responded to new proportions in sportswear, and our intimates customers responded to new strapless and unlined bra launches."

    Langenstein concluded, "We continue to deliver strong results and generate meaningful cash flow. Our unrelenting focus on our brand strategy and four strategic pillars of customer led, product obsessed, digital first, and operationally excellent gives us confidence in achieving our long-term financial targets and further enhancing our operating performance, strengthening our balance sheet, and increasing shareholder value."

    Business Highlights

    The Company's second quarter highlights include:

    • Consistent profitability: For the second quarter, the Company reported net income per diluted share of $0.49 and adjusted net income per diluted share of $0.28, excluding a non-cash tax benefit.



    • Compelling two-year stacked comparable sales: For the second quarter, total Chico's FAS comparable sales decreased 3.0% versus last year's second quarter and increased 16.5% on a two-year stacked basis. Chico's® comparable sales decreased 2.5% versus the second quarter last year. White House Black Market® ("WHBM") comparable sales decreased 5.7% versus last year's second quarter, marking a sequential improvement from the first quarter. Soma® comparable sales were down 0.5% versus last year's second quarter, marking a sequential comparable sales improvement over the last four consecutive quarters. For all three brands, full-priced sales remained healthy, and year-over-year total Company average dollar spend and units per transaction increased.



    • Continued market share gains: Our brands continued to take market share. According to market research firm Circana, for the second quarter year over year, Chico's and WHBM gained share with customers over 45 with household incomes over $100,000. During the same period, Soma outpaced the market and gained share with customers over 35 with household incomes over $100,000.



    • Strong operating income: Second quarter income from operations was $46.5 million, or 8.5% of net sales, reflecting solid gross margin performance combined with continued, disciplined expense management and investment in the Company's growth strategies.



    • Solid balance sheet: The Company ended the second quarter with $150.7 million in cash and marketable securities and total liquidity of $385.8 million, with $24.0 million in long-term debt.

    Overview of Financial Results

    For the second quarter, the Company reported net income of $59.3 million, or $0.49 per diluted share, compared to net income of $42.0 million, or $0.34 per diluted share, for last year's second quarter. The Company reported second quarter adjusted net income of $33.7 million, or $0.28 per diluted share, excluding the reversal of a $25.6 million non-cash tax valuation allowance, as presented in the accompanying GAAP to non-GAAP reconciliation.

    Sales

    The Company reported second quarter net sales of $545.1 million compared to $558.7 million in last year's second quarter. This decrease of 2.4% primarily reflects a comparable sales decrease of 3.0% since last year's second quarter. The 3.0% comparable sales decline was driven by a decrease in transaction count, partially offset by an increase in average dollar sale.

    The following table depicts comparable sales percentages for Chico's FAS, Chico's, WHBM, and Soma:



    Thirteen Weeks Ended



    Twenty-Six Weeks Ended



    July 29, 2023



    July 30, 2022



    July 29, 2023



    July 30, 2022

    Chico's

    (2.5) %



    29.7 %



    1.1 %



    39.6 %

    White House Black Market

    (5.7)



    31.9



    (6.9)



    47.0

    Soma

    (0.5)



    (9.2)



    (1.5)



    (5.7)

    Total Company

    (3.0)



    19.5



    (1.8)



    28.9

    Gross Margin

    For the second quarter, gross profit was $216.9 million, or 39.8% of net sales, compared to $231.5 million, or 41.4% of net sales, in last year's second quarter. The 160-basis-point decrease in gross margin primarily reflects higher occupancy costs; lower average unit retail; increased raw material costs partially offset by lower inbound freight; and the benefit of disciplined expense management.

    Selling, General, and Administrative Expenses

    For the second quarter, selling, general, and administrative expenses ("SG&A") were $170.4 million, or 31.3% of net sales, compared to $173.3 million, or 31.0% of net sales, for last year's second quarter. The 30 basis points of deleverage primarily reflects increased store operating expenses and deleverage on lower net sales, partially offset by disciplined expense management.

    Income Taxes

    The Company's second quarter effective tax rate was a 28.6% benefit compared to a 26.6% expense for last year's second quarter. This year's effective tax rate primarily reflects a $25.6 million non-cash discrete benefit due to a reversal of the majority of the valuation allowance on deferred tax assets. The Company's second quarter effective tax rate, excluding the reversal of the valuation allowance, was 26.9%. Last year's second quarter effective tax rate primarily reflected the impact of losses in foreign jurisdictions on which a full valuation allowance was recorded.

    Cash, Marketable Securities, and Capital Allocation

    At the end of the second quarter, cash and marketable securities totaled $150.7 million compared to $172.5 million at the end of last year's second quarter.

    Long-term debt at the end of the second quarter totaled $24.0 million compared to $99.0 million at the end of last year's second quarter, reflecting a principal payment of $25.0 million in the first quarter of fiscal year 2023, in addition to the $50.0 million repaid in fiscal year 2022.

    During the second quarter of fiscal 2023, the Company announced that its Board authorized a new share repurchase program of up to $100 million of the Company's common stock and canceled the remainder of its $300 million share repurchase program.

    Inventories

    At the end of the second quarter, inventories totaled $300.2 million compared to $338.8 million at the end of last year's second quarter. The decrease of $38.6 million, or 11.4%, was primarily due to normalized supply chain conditions that resulted in significantly lower in-transit inventories.

    Fiscal 2023 Third Quarter and Full-Year Outlook

    For fiscal 2023 third quarter, the Company currently expects:

    • Consolidated net sales of $505 million to $525 million;
    • Gross margin rate as a percent of net sales of 38.5% to 39.0%;
    • SG&A as a percent of net sales of 35.1% to 35.6%;
    • Effective income tax rate of 29.0%; and
    • Earnings per diluted share of $0.08 to $0.12.

    For fiscal 2023, a 53-week year, the Company currently expects:

    • Consolidated net sales of $2,145 million to $2,175 million;
    • Gross margin rate as a percent of net sales of 38.5% to 38.8%;
    • SG&A as a percent of net sales of 33.0% to 33.3%;
    • Effective income tax rate of 26.0%;
    • Earnings per diluted share of $0.87 to $0.95(1); and
    • Capital and cloud-based expenditures of $75 million to $85 million.

    (1) Includes the non-cash tax benefit of $0.21 as reflected in the accompanying GAAP to non-GAAP reconciliation.

    Conference Call Information

    The Company is hosting a live conference call on Tuesday, August 29, 2023, beginning at 8:00 a.m. Eastern Time to review the operating results for the second 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, 4272299, is required to join the conference call. Interested participants should call 10-15 minutes prior to the 8:00 a.m. Eastern Time 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, FL. 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®, White House Black Market®, and Soma® – each operating 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 StyleConnect®, the Company's customized, branded, digital styling tool that enables customers to conveniently shop wherever, whenever, and however they prefer.

    As of July 29, 2023, the Company operated 1,258 stores in the U.S. and sold merchandise through 58 international franchise locations in Mexico and through two domestic franchise locations in airports. The Company's merchandise is also available at www.chicos.com, www.chicosofftherack.com, www.whbm.com, and www.soma.com.

    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 concerning our current expectations, assumptions, plans, estimates, judgments, and projections about our business and our industry, and other statements that are not historical facts. These statements, including, without limitation, the quote from Ms. Langenstein and the sections captioned "Business Highlights" and "Fiscal 2023 Third Quarter and Full-Year Outlook," are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, words or phrases such as "aim," "anticipates," "believes," "could," "estimates," "expects," "intends," "target," "may," "will," "plans," "path," "outlook," "project," "should," "strategy," "potential," "confident," "assumptions," and similar expressions identify forward-looking statements. These forward-looking statements are based largely on information currently available to our management and are subject to various 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, our expectations are not guarantees of performance. There is no assurance that our expectations will 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, those factors described in Item 1A, "Risk Factors" in our most recent Annual Report on Form 10-K and, from time to time, in Item 1A, "Risk Factors" in our Quarterly Reports on Form 10-Q and the following: the ability of our suppliers, logistics providers, vendors, and landlords to meet their obligations to us in light of financial stress, labor shortages, liquidity challenges, bankruptcy filings by other industry participants, and supply chain and other disruptions; our ability to sufficiently staff our retail stores; changes in general economic conditions, including, but not limited to, consumer confidence and spending patterns; the impacts of rising inflation, gasoline prices, and interest rates on consumer spending; the availability of, and interest rates on, consumer credit; the impact of consumer debt levels and consumers' ability to meet credit obligations; market disruptions, including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, adverse developments affecting the financial services industry, political and social crises, war and other military conflicts (such as the war in Ukraine) or other major events, or the prospect of these events (including their impact on consumer spending, inflation, and the global supply chain); shifts in consumer behavior, and our ability to adapt, identify, and respond to new and changing fashion trends and customer preferences, and to coordinate product development with buying and planning; changes in the general or specialty retail or apparel industries, including significant decreases in market demand and the overall level of spending for women's private-branded clothing and related accessories; our ability to secure and maintain customer acceptance of in-store and online concepts and styles; our ability to maintain strong relationships with our vendors, manufacturers, licensors, and retail customers; increased competition in the markets in which we operate, including for, among other things, premium mall space; our ability to remain competitive with customer shipping terms and costs; decreases in customer traffic at malls, shopping centers, and our stores; fluctuations in foreign currency exchange rates and commodity prices; significant increases in the costs of manufacturing, raw materials, transportation, importing, distribution, labor, and advertising; decreases in the quality of merchandise received from suppliers and increases in delivery times for receiving such merchandise; our ability to appropriately manage our store fleet; our ability to achieve the expected results of any store openings or store closings; our ability to appropriately manage inventory and allocation processes and leverage targeted promotions; our ability to maintain cost-saving discipline; our ability to generate sufficient cash flow; our ability to operate our retail websites in a profitable manner; our ability to successfully identify and implement additional sales and distribution channels; changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons; our ability to successfully execute and achieve the expected results of our business, brand strategies, brand awareness programs, and merchandising and marketing programs, including, but not limited to, the Company's rewards programs and its three-year strategic growth plan, sales initiatives, multi-channel strategies, and four strategic pillars, which are (1) customer led, (2) product obsessed, (3) digital first, and (4) operationally excellent; our ability to utilize our Fort Myers campus, our distribution center, and our other support facilities in an efficient and effective manner; our reliance on sourcing from foreign suppliers; significant adverse economic, labor, political, or other shifts (including adverse changes in tariffs, taxes, or other import regulations, particularly with respect to China or Vietnam, or legislation prohibiting certain imports from China or Vietnam); U.S. and foreign governmental actions and policies, and changes thereto; the continuing performance, implementation, and integration of our management information systems; our ability to successfully update and maintain our information systems; the impact of any system failure, cybersecurity, or other data security breaches, including any security breaches resulting in the theft, transfer, or unauthorized disclosure of customer, employee, or company information that we or our third-party vendors may experience; the risks that our share repurchase program may not successfully enhance shareholder value, or that share repurchases could be negatively perceived by investors; our ability to comply with applicable domestic and foreign information security and privacy laws, regulations, and technology platform rules or other obligations related to data privacy and security; our ability to attract, hire, train, motivate, and retain qualified employees in an inclusive environment; our ability to successfully recruit leadership or transition members of our senior management team; increased public focus and opinion on environmental, social, and governance ("ESG") initiatives and our ability to meet any announced ESG goals and initiatives; future unsolicited offers to buy the Company and actions of activist shareholders and others, and our ability to respond effectively; our ability to secure and protect our trademark and other intellectual property rights; our ability to protect our reputation and our brand images; unanticipated obligations or changes in estimates arising from new or existing litigation, income taxes, and other regulatory proceedings; unanticipated adverse changes in legal, regulatory, or tax laws; and our ability to comply with the terms of our credit agreement, including the restrictive provisions limiting our flexibility in operating our business and in obtaining additional credit on commercially reasonable terms.

    These factors should be considered in evaluating forward-looking statements contained herein. All forward-looking statements that are made, or are attributable to us, are expressly qualified in their entirety by this cautionary notice. The forward-looking statements included herein are only made as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

    Investor Relations Contact:

    Julie MacMedan

    Chico's FAS, Inc.

    (239) 346-4384

    [email protected]

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

     

    Chico's FAS, Inc. and Subsidiaries

    Condensed Consolidated Statements of Income

    (Unaudited)

     (in thousands, except per share amounts)





    Thirteen Weeks Ended



    Twenty-Six Weeks Ended



    July 29, 2023



    July 30, 2022



    July 29, 2023



    July 30, 2022



    Amount



    % of

    Sales



    Amount



    % of

    Sales



    Amount



    % of

    Sales



    Amount



    % of

    Sales

    Net Sales:































    Chico's

    $    274,217



    50.3 %



    $    281,777



    50.4 %



    $    547,867



    50.7 %



    $    546,243



    49.7 %

    White House Black Market

    150,048



    27.5



    158,581



    28.4



    303,518



    28.1



    327,610



    29.8

    Soma

    120,861



    22.2



    118,362



    21.2



    228,484



    21.2



    225,782



    20.5

    Total Net Sales

    545,126



    100.0



    558,720



    100.0



    1,079,869



    100.0



    1,099,635



    100.0

    Cost of goods sold

    328,226



    60.2



    327,206



    58.6



    637,960



    59.1



    651,556



    59.3

    Gross Margin

    216,900



    39.8



    231,514



    41.4



    441,909



    40.9



    448,079



    40.7

    Selling, general, and administrative expenses

    170,356



    31.3



    173,297



    31.0



    342,029



    31.7



    344,455



    31.3

    Income from Operations

    46,544



    8.5



    58,217



    10.4



    99,880



    9.2



    103,624



    9.4

    Interest expense, net

    (420)



    (0.1)



    (1,056)



    (0.2)



    (1,050)



    (0.1)



    (2,031)



    (0.2)

    Income before Income Taxes

    46,124



    8.4



    57,161



    10.2



    98,830



    9.1



    101,593



    9.2

    Income tax (benefit) provision

    (13,200)



    (2.5)



    15,200



    2.7



    (400)



    (0.1)



    24,700



    2.2

    Net Income

    $      59,324



    10.9 %



    $      41,961



    7.5 %



    $      99,230



    9.2 %



    $      76,893



    7.0 %

    Per Share Data:































    Net income per common share – basic

    $           0.50







    $           0.35







    $           0.83







    $           0.64





    Net income per common and common

    equivalent share – diluted

    $           0.49







    $           0.34







    $           0.81







    $           0.62





    Weighted average common shares

    outstanding – basic

    119,113







    120,003







    119,408







    119,498





    Weighted average common and common

    equivalent shares outstanding – diluted

    121,956







    123,897







    122,697







    123,580





     

     Chico's FAS, Inc. and Subsidiaries

    Condensed Consolidated Balance Sheets

    (Unaudited)

    (in thousands)





    July 29, 2023



    January 28, 2023



    July 30, 2022

    ASSETS











    Current Assets:











    Cash and cash equivalents

    $                 129,015



    $                 153,377



    $                 157,233

    Marketable securities, at fair value

    21,717



    24,677



    15,301

    Inventories

    300,151



    276,840



    338,761

    Prepaid expenses and other current assets

    53,693



    48,604



    47,553

    Income taxes receivable

    9,725



    11,865



    12,654

    Total Current Assets

    514,301



    515,363



    571,502

    Property and Equipment, net

    193,815



    192,165



    181,093

    Right of Use Assets

    464,050



    435,321



    438,959

    Other Assets:











    Goodwill

    16,360



    16,360



    16,360

    Other intangible assets, net

    5,000



    5,000



    5,000

    Other assets, net

    42,420



    23,632



    19,599

    Total Other Assets

    63,780



    44,992



    40,959



    $              1,235,946



    $              1,187,841



    $              1,232,513













    LIABILITIES AND SHAREHOLDERS' EQUITY











    Current Liabilities:











    Accounts payable

    $                 152,828



    $                 156,262



    $                 173,891

    Current lease liabilities

    152,927



    153,202



    165,345

    Other current and deferred liabilities

    118,146



    141,698



    143,181

    Total Current Liabilities

    423,901



    451,162



    482,417

    Noncurrent Liabilities:











    Long-term debt

    24,000



    49,000



    99,000

    Long-term lease liabilities

    370,976



    349,409



    350,797

    Other noncurrent and deferred liabilities

    1,812



    2,637



    2,422

    Total Noncurrent Liabilities

    396,788



    401,046



    452,219

    Commitments and Contingencies











    Shareholders' Equity:











    Preferred stock

    —



    —



    —

    Common stock

    1,235



    1,250



    1,252

    Additional paid-in capital

    514,059



    513,914



    508,105

    Treasury stock, at cost

    (514,168)



    (494,395)



    (494,395)

    Retained earnings

    414,252



    315,022



    282,910

    Accumulated other comprehensive (loss) gain

    (121)



    (158)



    5

    Total Shareholders' Equity

    415,257



    335,633



    297,877



    $              1,235,946



    $              1,187,841



    $              1,232,513

     

    Chico's FAS, Inc. and Subsidiaries

    Condensed Consolidated Cash Flow Statements

    (Unaudited)

     (in thousands)





    Twenty-Six Weeks Ended



    July 29, 2023



    July 30, 2022

    Cash Flows from Operating Activities:







    Net income

    $                          99,230



    $                          76,893

    Adjustments to reconcile net income to net cash provided by operating activities:







    Inventory write-offs

    —



    434

    Depreciation and amortization

    19,124



    22,886

    Non-cash lease expense

    90,641



    90,293

    Loss on disposal and impairment of property and equipment, net

    55



    2,126

    Deferred tax benefit

    (15,427)



    (432)

    Share-based compensation expense

    6,306



    7,157

    Changes in assets and liabilities:







    Inventories

    (23,311)



    (15,806)

    Prepaid expenses and other assets

    (9,835)



    (1,136)

    Income tax receivable

    2,140



    1,044

    Accounts payable

    (3,351)



    (6,635)

    Accrued and other liabilities

    (24,667)



    2,683

    Lease liability

    (98,276)



    (103,508)

    Net cash provided by operating activities

    42,629



    75,999

    Cash Flows from Investing Activities:







    Purchases of marketable securities

    (4,308)



    (16,324)

    Proceeds from sale of marketable securities

    7,274



    1,029

    Purchases of property and equipment

    (19,008)



    (10,191)

    Net cash used in investing activities

    (16,042)



    (25,486)

    Cash Flows from Financing Activities:







    Payments on borrowings

    (25,000)



    —

    Payments of debt issuance costs

    —



    (706)

    Proceeds from issuance of common stock

    218



    156

    Repurchase of treasury stock under repurchase program

    (19,805)



    —

    Payments of tax withholdings related to share-based awards

    (6,362)



    (7,835)

    Net cash used in financing activities

    (50,949)



    (8,385)

    Net (decrease) increase in cash and cash equivalents

    (24,362)



    42,128

    Cash and Cash Equivalents, Beginning of period

    153,377



    115,105

    Cash and Cash Equivalents, End of period

    $                        129,015



    $                        157,233

     

    Supplemental Detail on Net Income per Common Share Calculation

    In accordance with accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of income 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 income per share is determined using the two-class method when it is more dilutive than the treasury stock method. Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period, including participating securities. Diluted net income per share reflects the dilutive effect of potential common shares from non-participating securities, such as restricted stock awards granted after fiscal 2019, stock options, performance-based restricted stock units, and restricted stock units. For the twenty-six weeks ended July 29, 2023 and July 30, 2022, potential common shares were excluded from the computation of diluted income per common share to the extent they were antidilutive.

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





    Thirteen Weeks Ended



    Twenty-Six Weeks Ended





    July 29, 2023



    July 30, 2022



    July 29, 2023



    July 30, 2022

    Numerator:

















    Net income



    $                  59,324



    $                  41,961



    $                  99,230



    $                  76,893

    Net income allocated to participating securities



    (87)



    (166)



    (145)



    (348)

    Net income available to common shareholders



    $                  59,237



    $                  41,795



    $                  99,085



    $                  76,545



















    Denominator:

















    Weighted average common shares outstanding – basic



    119,113



    120,003



    119,408



    119,498

    Dilutive effect of non-participating securities



    2,842



    3,894



    3,290



    4,082

    Weighted average common and common equivalent

    shares outstanding – diluted



    121,956



    123,897



    122,697



    123,580



















    Net income per common share:

















    Basic



    $                       0.50



    $                       0.35



    $                       0.83



    $                       0.64

    Diluted



    $                       0.49



    $                       0.34



    $                       0.81



    $                       0.62



















     

    GAAP to Non-GAAP Reconciliation

    The Company reports information in accordance with U.S. generally accepted accounting principles ("GAAP"). However, this press release includes non-GAAP financial measures that are not based on any standardized methodology prescribed by GAAP. Non-GAAP financial measures should be used supplemental to, and not as an alternative to, the Company's GAAP financial results, and the Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies. The Company believes presenting these non-GAAP measures, which exclude items that are not comparable from period to period, is useful to investors and others in evaluating the Company's ongoing operating and financial results in a manner that is consistent with management's evaluation of business performance and understanding how such results compare with the Company's historical performance. The reconciliation below excludes the favorable non-cash impact of the tax valuation allowance reversal in this year's second quarter.

    A reconciliation of net income and income per diluted share on a GAAP basis to adjusted net income and adjusted net income per diluted share on a non-GAAP basis for the thirteen and twenty-six weeks ended July 29, 2023 is presented in the table below.

    GAAP to Non-GAAP Reconciliation of Adjusted Net Income and Adjusted Net Income Per Diluted Share

    (Unaudited)

    (in thousands)















    Thirteen Weeks Ended



    Twenty-Six Weeks Ended





    July 29, 2023

    Net Income:



















    Net Income GAAP basis



    $                              59,324



    $                              99,230

    Tax valuation allowance reversal



    (25,575)



    (25,575)

    Adjusted Net Income (Non-GAAP adjusted basis)



    $                              33,749



    $                              73,655











    Net income per common and common equivalent share – diluted:



















    Net income per common and common share equivalent (GAAP basis)



    $                                  0.49



    $                                   0.81

    Tax valuation allowance reversal per common share equivalent



    (0.21)



    (0.21)

    Adjusted net income per common share equivalent (Non-GAAP adjusted

    basis)



    $                                  0.28



    $                                   0.60

     

    Chico's FAS, Inc. and Subsidiaries

    Store Count and Square Footage

    Thirteen Weeks Ended July 29, 2023

    (Unaudited)























    April 29, 2023



    New Stores



    Closures



    July 29, 2023





    Store Count:



















    Chico's frontline boutiques

    486



    —



    (2)



    484





    Chico's outlets

    120



    —



    —



    120





    WHBM frontline boutiques

    324



    —



    (2)



    322





    WHBM outlets

    53



    —



    —



    53





    Soma frontline boutiques

    259



    1



    (1)



    259





    Soma outlets

    20



    —



    —



    20





    Total Chico's FAS, Inc.

    1,262



    1



    (5)



    1,258















































    April 29, 2023



    New Stores



    Closures



    Other Changes in

    SSF



    July 29, 2023

    Net Selling Square Footage

    ("SSF"):



















    Chico's frontline boutiques

    1,323,344



    —



    (5,841)



    (157)



    1,317,346

    Chico's outlets

    301,647



    —



    —



    —



    301,647

    WHBM frontline boutiques

    758,662



    —



    (4,570)



    106



    754,198

    WHBM outlets

    110,394



    —



    —



    —



    110,394

    Soma frontline boutiques

    478,265



    1,211



    (1,533)



    (438)



    477,505

    Soma outlets

    37,539



    —



    —



    —



    37,539

    Total Chico's FAS, Inc.        

    3,009,851



    1,211



    (11,944)



    (489)



    2,998,629

    As of July 29, 2023, the Company's franchise operations consisted of 58 international retail locations in Mexico and two domestic locations in airports.

     

    Chico's FAS, Inc. and Subsidiaries

    Store Count and Square Footage

    Twenty-Six Weeks Ended July 29, 2023

    (Unaudited)























    January 28, 2023



    New Stores



    Closures



    July 29, 2023





    Store count:



















    Chico's frontline boutiques

    488



    —



    (4)



    484





    Chico's outlets

    121



    —



    (1)



    120





    WHBM frontline boutiques

    328



    —



    (6)



    322





    WHBM outlets

    53



    —



    —



    53





    Soma frontline boutiques

    259



    1



    (1)



    259





    Soma outlets

    20



    —



    —



    20





    Total Chico's FAS, Inc.

    1,269



    1



    (12)



    1,258















































    January 28, 2023



    New Stores



    Closures



    Other Changes in

    SSF



    July 29, 2023

    Net Selling Square Footage:



















    Chico's frontline boutiques

    1,326,251



    —



    (10,650)



    1,745



    1,317,346

    Chico's outlets

    304,487



    —



    (2,840)



    —



    301,647

    WHBM frontline boutiques

    767,063



    —



    (14,559)



    1,694



    754,198

    WHBM outlets

    110,394



    —



    —



    —



    110,394

    Soma frontline boutiques

    476,669



    1,211



    (1,533)



    1,158



    477,505

    Soma outlets

    37,539



    —



    —



    —



    37,539

    Total Chico's FAS, Inc.

    3,022,403



    1,211



    (29,582)



    4,597



    2,998,629

    As of July 29, 2023, the Company's franchise operations consisted of 58 international retail locations in Mexico and two domestic locations in airports.

     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/chicos-fas-inc-reports-second-quarter-results-301911779.html

    SOURCE Chico's FAS, Inc.

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