chs-20231028

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 October 28, 2023


☐			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) (Zip Code)

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 November 21, 2023, the registrant had 123,457,364 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 AND THIRTY-NINE WEEKS ENDED OCTOBER 28, 2023

TABLE OF CONTENTS


PART I – Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Income for the Thirteen and T hirty-Nine Weeks Ended October 2 8 , 2023 (Unaudited) and October 29 , 2022 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the Thirteen and Thirty-Nine Weeks Ended October 28, 2023 (Unaudited) and October 29, 2022 (Unaudited)	5

	Condensed Consolidated Balance Sheets – October 28 , 2023 (Unaudited), January 28, 2023 (Audited), and October 29 , 2022 (Unaudited)	6

	Condensed Consolidated Statements of Shareholders’ Equity for the Thirteen and T hirty-Nine Weeks Ended October 28 , 2023 (Unaudited) and October 29 , 2022 (Unaudited)	7

	Condensed Consolidated Statements of Cash Flows for the T hirty-Nine Weeks Ended October 28 , 2023 (Unaudited) and October 29 , 2022 (Unaudited)	9

	Notes to Condensed Consolidated Financial Statements (Unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4.	Controls and Procedures	34

PART II – Other Information

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36



Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	38

Item 5.	Other Information	39

Item 6.	Exhibits	40

Signatures		41

Table of Contents

PART I – FINANCIAL INFORMATION


ITEM 1.			FINANCIAL STATEMENTS

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

CHICO’S FAS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)


	Thirteen Weeks Ended								Thirty-Nine Weeks Ended
	October 28, 2023				October 29, 2022				October 28, 2023				October 29, 2022

	Amount		% of Sales		Amount		% of Sales		Amount		% of Sales		Amount		% of Sales
Net Sales	$	505,126	100.0	%	$	518,332	100.0	%	$	1,584,995	100.0	%	$	1,617,967	100.0	%
Cost of goods sold	308,677		61.1		310,892		60.0		946,637		59.7		962,448		59.5
Gross Profit	196,449		38.9		207,440		40.0		638,358		40.3		655,519		40.5
Selling, general, and administrative expenses	178,643		35.4		175,841		33.9		520,672		32.8		520,296		32.1
Merger-related costs	7,277		1.4		—		0.0		7,277		0.5		—		0.0


Income from Operations	10,529		2.1		31,599		6.1		110,409		7.0		135,223		8.4
Interest expense, net	(389)		(0.1)		(1,080)		(0.2)		(1,439)		(0.1)		(3,111)		(0.2)
Income before Income Taxes	10,140		2.0		30,519		5.9		108,970		6.9		132,112		8.2
Income tax provision	5,100		1.0		5,900		1.2		4,700		0.3		30,600		1.9
Net Income	$	5,040	1.0	%	$	24,619	4.7	%	$	104,270	6.6	%	$	101,512	6.3	%
Per Share Data:
Net income per common share – basic	$	0.04			$	0.20			$	0.87			$	0.84
Net income per common and common equivalent share – diluted	$	0.04			$	0.20			$	0.85			$	0.82
Weighted average common shares outstanding – basic	119,457				120,333				119,424				119,776
Weighted average common and common equivalent shares outstanding – diluted	122,735				124,887				122,500				124,016

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 INCOME

(Unaudited)

(in thousands)


	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net income	$	5,040	$	24,619	$	104,270	$	101,512
Other comprehensive income:
Unrealized gains (losses) on marketable securities, net of taxes	35		(233)		72		(228)

Comprehensive income	$	5,075	$	24,386	$	104,342	$	101,284

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

(in thousands, except per share amounts)


	October 28, 2023		January 28, 2023		October 29, 2022
ASSETS	(Unaudited)		(Audited)		(Unaudited)

Current Assets:
Cash and cash equivalents	$	101,944	$	153,377	$	117,726
Marketable securities, at fair value	24,702		24,677		23,017
Inventories	342,721		276,840		304,127
Prepaid expenses and other current assets	51,086		48,604		47,208
Income tax receivable	9,181		11,865		15,430

Total Current Assets	529,634		515,363		507,508
Property and Equipment, net	200,980		192,165		183,153
Right of Use Assets	466,888		435,321		432,018
Other Assets:
Goodwill	16,360		16,360		16,360
Other intangible assets, net	5,000		5,000		5,000
Other assets, net	45,853		23,632		18,890
Total Other Assets	67,213		44,992		40,250
	$	1,264,715	$	1,187,841	$	1,162,929
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	153,401	$	156,262	$	107,400
Current lease liabilities	150,053		153,202		157,687

Other current and deferred liabilities	138,887		141,698		155,133

Total Current Liabilities	442,341		451,162		420,220
Noncurrent Liabilities:
Long-term debt	24,000		49,000		69,000
Long-term lease liabilities	373,823		349,409		346,560
Other noncurrent and deferred liabilities	1,956		2,637		2,612

Total Noncurrent Liabilities	399,779		401,046		418,172
Commitments and Contingencies (see Note 12)
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; 167,994 and 166,320 and 166,326 shares issued respectively; and 123,447 and 125,023 and 125,029 shares outstanding, respectively	1,234		1,250		1,250
Additional paid-in capital	516,323		513,914		510,374
Treasury stock, at cost, 44,547 and 41,297 and 41,297 shares, respectively	(514,168)		(494,395)		(494,395)
Retained earnings	419,292		315,022		307,536
Accumulated other comprehensive loss	(86)		(158)		(228)
Total Shareholders’ Equity	422,595		335,633		324,537
	$	1,264,715	$	1,187,841	$	1,162,929

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)


	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, July 29, 2023	123,524	$	1,235	$	514,059	44,547	$	(514,168)	$	414,252	$	(121)	$	415,257


Net income	—	—		—		—	—		5,040		—		5,040
Unrealized gains on marketable securities, net of taxes	—	—		—		—	—		—		35		35

Issuance of common stock	44	—		111		—	—		—		—		111

Repurchase of common stock and tax withholdings related to share-based awards	(121)	(1)		(677)		—	—		—		—		(678)
Share-based compensation	—	—		2,830		—	—		—		—		2,830
BALANCE, October 28, 2023	123,447	$	1,234	$	516,323	44,547	$	(514,168)	$	419,292	$	(86)	$	422,595

BALANCE, July 30, 2022	125,184	$	1,252	$	508,105	41,297	$	(494,395)	$	282,910	$	5	$	297,877


Net income	—	—		—		—	—		24,619		—		24,619
Unrealized losses on marketable securities, net of taxes	—	—		—		—	—		—		(233)		(233)

Issuance of common stock	3	—		83		—	—		—		—		83
Dividends on common stock	—	—		—		—	—		7		—		7
Repurchase of common stock and tax withholdings related to share-based awards	(158)	(2)		(978)		—	—		—		—		(980)
Share-based compensation	—	—		3,164		—	—		—		—		3,164
BALANCE, October 29, 2022	125,029	$	1,250	$	510,374	41,297	$	(494,395)	$	307,536	$	(228)

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