CHICO'S NEWS RELEASE
[CHICO'S LETTERHEAD]
FOR IMMEDIATE RELEASE
Contact: Charles J. Kleman
Chief Financial Officer
Phone: (239) 274-4105
Fax: (239) 277-5237
CHICO'S FAS, INC. ANNOUNCES FIRST QUARTER EARNINGS
- - REVENUES ROSE 29.5% TO A RECORD $169.0 MILLION
- - NET INCOME CLIMBED 18.2% TO A RECORD $23.4 MILLION
- - MAY COMPARABLE STORE SALES TRENDING HIGH SINGLE DIGIT
FORT MYERS, FL - MAY 29, 2003 - Chico's FAS, Inc. (NYSE: CHS) today
announced its financial results for the first quarter ended May 3, 2003.
Net sales for the first quarter of the current fiscal year increased
29.5% to $169.0 million from $130.5 million for the first quarter ended May 4,
2002. Net income rose 18.2% to $23.4 million, or $.27 cents a diluted share,
compared to net income of $19.8 million, or $.23 cents a diluted share (as
adjusted for the 2 for 1 stock split in July 2002) in the prior year's first
quarter. Comparable store sales for the Company-owned stores increased 7.8% for
the thirteen week period ended May 3, 2003 compared to the same thirteen week
period last year.
Scott A. Edmonds, Chico's President and COO commented, "The first
quarter's operating margin of 22.1% represents our second best quarterly
operating margin in history and is among the highest in the specialty retail
sector. To achieve these strong results in a quarter where we saw the war in
Iraq, extreme weather patterns, and a struggling economy is again testimony to
the strength of the Chico's brand and our management team. During the quarter,
we invested an additional 0.6% of operating margin into our marketing efforts
to help ensure we maintained strong customer traffic. Last year, front ending
of our marketing costs paid off by enabling us to sign up new Passport
customers early in the year and seeing these new customers continue their
spending throughout the last three quarters. We hope to see similar results
this year. We believe that our 7.8% same-store sales increase for this year's
first quarter indicates that this increase in marketing proved to be successful
in what were more challenging times for specialty apparel. Our balance sheet
remains solid with strong balances in cash and marketable securities, no debt,
and a lean inventory at $59 per net selling square foot."
With regard to Pazo, Edmonds stated, "It is too early to draw any
conclusions on the Pazo test at this time. We are learning a lot from the Pazo
customer and have been making certain changes to both the product assortment
and the store presentation. We believe these changes will give us the best
chance to achieve an acceptable and financially rewarding customer response.
The Pazo test cost us approximately 0.7% in operating margin. We see this as an
investment to develop a store concept that may help the company's performance
in the future."
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Chico's sells exclusively designed, private-label women's clothing and
related accessories. The Company operates 409 women's specialty stores, under
the name of Chico's and Pazo, in 41 states and the District of Columbia. The
Company owns 368 Chico's front-line stores, 19 Chico's outlet stores and 10
Pazo stores; franchisees own and operate 12 Chico's stores.
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, PLEASE CALL (877) 424-4267 TO LISTEN TO
CHICO'S MONTHLY SALES INFORMATION AND INVESTOR RELATIONS LINE
A COPY OF A SLIDE SHOW ADDRESSING CHICO'S RECENT FINANCIAL RESULTS AND
CURRENT PLANS FOR EXPANSION IS AVAILABLE ON THE CHICO'S WEBSITE AT
www.chicos.com IN THE INVESTOR RELATIONS SECTION
ADDITIONAL INVESTOR INFORMATION ON CHICO'S FAS, INC. IS AVAILABLE FREE
OF CHARGE ON THE CHICO'S WEBSITE AT www.chicos.com IN THE
INVESTOR RELATIONS SECTION
(Financial Tables Follow)
Page 2 of 4
CHICO'S FAS, Inc.
Consolidated Balance Sheets
(Unaudited)
MAY 3, FEBRUARY 1,
2003 2003
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 21,060,273 $ 8,753,089
Marketable securities, at market 101,022,643 91,195,175
Receivables 3,420,615 2,226,068
Inventories 44,665,457 44,907,504
Prepaid expenses 6,760,022 6,222,526
Deferred taxes 7,980,000 7,125,000
------------- -------------
TOTAL CURRENT ASSETS 184,909,010 160,429,362
------------- -------------
PROPERTY AND EQUIPMENT:
Land and land improvements 5,282,677 5,166,394
Building and building improvements 20,376,548 19,667,654
Equipment, furniture and fixtures 79,225,729 71,769,250
Leasehold improvements 86,243,043 78,792,080
------------- -------------
TOTAL PROPERTY AND EQUIPMENT 191,127,997 175,395,378
Less accumulated depreciation and amortization (40,657,365) (36,686,235)
------------- -------------
PROPERTY AND EQUIPMENT, NET 150,470,632 138,709,143
------------- -------------
OTHER ASSETS:
Deferred taxes 603,000 92,000
Other assets, net 3,273,999 2,313,242
------------- -------------
TOTAL OTHER ASSETS 3,876,999 2,405,242
------------- -------------
$ 339,256,641 $ 301,543,747
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 25,932,355 $ 28,488,471
Accrued liabilities 22,919,011 24,803,448
Accrued income taxes 13,855,451 1,396,633
Current portion of deferred liabilities 176,255 171,217
------------- -------------
TOTAL CURRENT LIABILITIES 62,883,072 54,859,769
------------- -------------
NONCURRENT LIABILITIES:
Deferred liabilities 7,874,756 6,550,856
------------- -------------
TOTAL NONCURRENT LIABILITIES 7,874,756 6,550,856
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock 857,489 852,823
Additional paid-in capital 69,030,749 63,985,702
Retained earnings 198,476,607 175,109,145
Accumulated other comprehensive income 133,968 185,452
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 268,498,813 240,133,122
------------- -------------
$ 339,256,641 $ 301,543,747
============= =============
Page 3 of 4
CHICO'S FAS, Inc.
Consolidated Statements of Income
(Unaudited)
THIRTEEN WEEKS ENDED
----------------------------------------------------------------
MAY 3, 2003 MAY 4, 2002
--------------------------- ---------------------------
% OF % OF
AMOUNT SALES AMOUNT SALES
------------ ----- ------------ -----
Net sales by Company stores $161,440,522 95.5 $125,264,126 96.0
Net sales by catalog & Internet 5,682,730 3.4 3,581,926 2.8
Net sales to Franchisees 1,861,345 1.1 1,607,589 1.2
------------ ----- ------------ -----
NET SALES 168,984,597 100.0 130,453,641 100.0
Cost of goods sold 64,689,213 38.3 48,989,591 37.6
------------ ----- ------------ -----
GROSS PROFIT 104,295,384 61.7 81,464,050 62.4
General administrative and
store operating expenses 62,284,362 36.9 46,409,208 35.6
Depreciation and amortization 4,624,870 2.7 3,308,276 2.5
------------ ----- ------------ -----
INCOME FROM OPERATIONS 37,386,152 22.1 31,746,566 24.3
Interest income, net 303,310 0.2 153,717 0.1
------------ ----- ------------ -----
INCOME BEFORE TAXES 37,689,462 22.3 31,900,283 24.4
Income tax provision 14,322,000 8.5 12,123,000 9.2
------------ ----- ------------ -----
NET INCOME $ 23,367,462 13.8 $ 19,777,283 15.2
============ ===== ============ =====
PER SHARE DATA:
Net income per common
Share-basic (1) $ 0.27 $ 0.24
============ ============
Net income per common
& common equivalent
share-diluted (1) $ 0.27 $ 0.23
============ ============
Weighted average common
shares outstanding-basic (1) 85,512,752 81,885,902
============ ============
Weighted average common &
common equivalent shares
outstanding-diluted (1) 87,183,112 85,321,810
============ ============
(1) Prior year amounts restated to give effect to the 2 for 1 stock split
in July 2002.
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