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Record net sales of $651 mn at Chico's FAS

17 May '12

3 min read

Chico's FAS Inc. announced its financial results for the fiscal 2012 first quarter ended April 28, 2012.

Net Income and Earnings per Share
For the first quarter, net income was $53.6 million, or $0.32 per diluted share, compared to net income of $45.9 million, or $0.26 per diluted share for last year's first quarter, reflecting earnings per share increase of 23%.

Net Sales
For the first quarter, net sales were $650.8 million, an increase of 21.2% compared to $537.2 million in last year's first quarter. The increase reflects a consolidated comparable sales increase of 9.6%, an 8.0% increase in square footage and $33.7 million in sales for Boston Proper.

The consolidated comparable sales increase of 9.6% for the first quarter was on top of a 7.7% increase for last year's first quarter, and reflects increases in both average dollar sale and transaction count. The Chico's/Soma Intimates brands' comparable sales increased 8.8% on top of a 7.8% increase in last year's first quarter and the White House | Black Market ("WH|BM") brand's comparable sales increased 11.3% on top of a 7.4% increase in last year's first quarter.

Gross Margin
For the first quarter, gross margin was $378.6 million, an increase of 19.2% compared to $317.7 million in last year's first quarter. As a percentage of net sales, gross margin was 58.2%, a 90 basis point decrease from last year's first quarter, reflecting the cycling of 2011's four-year record gross margin rate, a more promotional environment, and the inclusion of Boston Proper's results.

Selling, General and Administrative Expenses
For the first quarter, selling, general and administrative expenses ("SG&A") were $291.7 million, an increase of 19.1% compared to $244.8 million in last year's first quarter. As a percentage of net sales, SG&A was 44.8%, a 70 basis point improvement from last year's first quarter, reflecting leverage on store expenses from our comparable sales increase and the inclusion of Boston Proper's results, partially offset by higher marketing expenses and increased performance-based incentive compensation.

Tax Rate
For the first quarter, the effective tax rate was 38.0% compared to 37.3% in last year's first quarter. The effective tax rate for last year reflected favorable state tax settlements.

Inventories
At the end of the first quarter, total inventories were $213.7 million compared to $198.5 million for the first quarter last year. Inventories in the current year include $13.6 million of inventory related to Boston Proper.

Outlook
For fiscal 2012, including Boston Proper, the Company's planning assumptions are as follows:
• Net sales increase at a mid to high teens percentage rate to approximately $2.5 to 2.6 billion, which includes comparable sales growth at a mid single digit rate, approximately 9% growth in store square footage and approximately $30 million in sales from the 53rd week;

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