chs-20210501

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM			10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 1, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-16435



Chico's FAS, Inc.
(Exact name of registrant as specified in its charter)


Florida						59-2389435
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

11215 Metro Parkway, Fort Myers, Florida 33966

(Address of principal executive offices)

239-277-6200

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.01 Per Share	CHS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

At May 31, 2021, the registrant had 122,601,626 shares of Common Stock, $0.01 par value per share, outstanding.

Table of Contents

CHICO'S FAS, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE

FISCAL THIRTEEN WEEKS ENDED MAY 1, 2021

TABLE OF CONTENTS


PART I – Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Loss for the Thirteen Weeks Ended May 1, 2021 (Unaudited) and May 2, 2020 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Loss for the Thirteen Weeks Ended May 1, 2021 (Unaudited) and May 2, 2020 (Unaudited)	5

	Condensed Consolidated Balance Sheets – May 1, 2021 (Unaudited), January 30, 2021 (Audited), and May 2, 2020 (Unaudited)	6

	Condensed Consolidated Statements of Shareholders’ Equity for the Thirteen Weeks Ended May 1, 2021 (Unaudited) and May 2, 2020 (Unaudited)	7

	Condensed Consolidated Statements of Cash Flows for the Thirteen Weeks Ended May 1, 2021 (Unaudited) and May 2, 2020 (Unaudited)	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II – Other Information

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32



Item 6.	Exhibits	33

Signatures		34

Table of Contents

PART I – FINANCIAL INFORMATION


ITEM 1.			FINANCIAL STATEMENTS

CHICO'S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(Unaudited)

(Dollars in thousands, except per share amounts)


	Thirteen Weeks Ended
	May 1, 2021				May 2, 2020

	Amount		% of Sales		Amount		% of Sales
Net Sales	$	387,961	100.0	%	$	280,264	100.0	%
Cost of goods sold	261,166		67.3		291,359		104.0
Gross Margin	126,795		32.7		(11,095)		(4.0)
Selling, general and administrative expenses	134,319		34.6		130,171		46.4
Goodwill and intangible impairment charges	—		0.0		113,180		40.4


Loss from Operations	(7,524)		(1.9)		(254,446)		(90.8)
Interest expense, net	(1,705)		(0.5)		(344)		(0.1)
Loss before Income Taxes	(9,229)		(2.4)		(254,790)		(90.9)
Income tax benefit	(300)		(0.1)		(76,500)		(27.3)
Net Loss	$	(8,929)	(2.3)	%	$	(178,290)	(63.6)	%
Per Share Data:
Net loss per common share - basic	$	(0.08)			$	(1.55)
Net loss per common and common equivalent share – diluted	$	(0.08)			$	(1.55)
Weighted average common shares outstanding – basic	116,689				115,574
Weighted average common and common equivalent shares outstanding – diluted	116,689				115,574

The accompanying notes are an integral part of these condensed consolidated statements.

Table of Contents

CHICO'S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)


	Thirteen Weeks Ended
	May 1, 2021		May 2, 2020
Net loss	$	(8,929)	$	(178,290)
Other comprehensive loss:
Unrealized losses on marketable securities, net of taxes	(34)		(137)
Foreign currency translation adjustment	—		(132)
Comprehensive loss	$	(8,963)	$	(178,559)

The accompanying notes are an integral part of these condensed consolidated statements.

Table of Contents

CHICO'S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)


	May 1, 2021		January 30, 2021		May 2, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	83,874	$	90,791	$	89,841
Marketable securities, at fair value	18,511		18,559		27,755
Inventories	209,668		203,983		273,126
Prepaid expenses and other current assets	39,701		30,565		35,848
Income tax receivable	57,513		58,140		66,834

Total Current Assets	409,267		402,038		493,404
Property and Equipment, net	223,898		241,370		285,714
Right of Use Assets	554,795		586,061		612,161
Other Assets:
Goodwill	16,360		16,360		16,360
Other intangible assets, net	5,000		5,000		6,164
Other assets, net	21,038		24,049		42,901
Total Other Assets	42,398		45,409		65,425
	$	1,230,358	$	1,274,878	$	1,456,704
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	128,230	$	116,506	$	140,396
Current lease liabilities	184,296		194,551		190,811

Other current and deferred liabilities	116,764		120,729		108,707

Total Current Liabilities	429,290		431,786		439,914
Noncurrent Liabilities:
Long-term debt	149,000		149,000		149,000
Long-term lease liabilities	480,537		515,797		520,323
Other noncurrent and deferred liabilities	11,936		11,863		6,630
Deferred taxes	1,313		1,313		30
Total Noncurrent Liabilities	642,786		677,973		675,983
Commitments and Contingencies (see Note 14)
Shareholders’ Equity:
Preferred stock, $0.01 par value; 2,500 shares authorized; no shares issued and outstanding	—		—		—
Common stock, $0.01 par value; 400,000 shares authorized; 163,863 and 161,032 and 160,883 shares issued respectively; and 122,566 and 119,735 and 119,586 shares outstanding, respectively	1,226		1,197		1,196
Additional paid-in capital	500,453		498,488		493,140
Treasury stock, at cost, 41,297 shares, respectively	(494,395)		(494,395)		(494,395)
Retained earnings	150,968		159,765		341,563
Accumulated other comprehensive gain (loss)	30		64		(697)
Total Shareholders’ Equity	158,282		165,119		340,807
	$	1,230,358	$	1,274,878	$	1,456,704

The accompanying notes are an integral part of these condensed consolidated statements.

Table of Contents

CHICO'S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands, except per share amounts)


	Thirteen Weeks Ended
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings	Accumulated Other Comprehensive Gain (Loss)
	Shares	Par Value				Shares	Amount				Total
BALANCE, January 30, 2021	119,735	$	1,197	$	498,488	41,297	$	(494,395)

SEC Form 10-Q filed by Chico&#39;s FAS, Inc.

SEC Form 10-Q filed by Chico's FAS, Inc.