8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 16, 2005

CHARMING SHOPPES, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	000-07258	23-1721355
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

450 WINKS LANE, BENSALEM, PA	19020
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (215) 245-9100

NOT APPLICABLE

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)  

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)  

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))  

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))  

Item 2.02. Results of Operations and Financial Condition.

On November 16, 2005 we issued a press release announcing our sales and earnings for the third quarter and nine months ended October 29, 2005 and an updated earnings outlook for the fourth quarter and fiscal year ending January 28, 2006. The earnings announcement is attached as Exhibit 99.1 to this report.

In accordance with general instruction B.2 to Form 8-K, the information included in this Item 2.02, and the exhibit attached hereto, shall be deemed to be “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press Release dated November 16, 2005

1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CHARMING SHOPPES, INC.
	(Registrant)
Date: November 16, 2005	/S/ERIC M. SPECTER
	Eric M. Specter
	Executive Vice President
	Chief Financial Officer

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated November 16, 2005

3

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

CHARMING SHOPPES REPORTS THIRD QUARTER

NET INCOME OF $10.8 MILLION, AN INCREASE OF 69% OVER PRIOR YEAR;

UPDATES EARNINGS OUTLOOK

Bensalem, PA, November 16, 2005 - Charming Shoppes, Inc. (NASDAQ:CHRS) a leading multi-channel specialty apparel retailer specializing in women's plus-size apparel, today reported sales and earnings for the thirdquarter and nine months ended October 29, 2005. The Company’s reported results for the three and nine month periods ended October 29, 2005 include sales and earnings from Crosstown Traders, Inc., since its acquisition on June 2, 2005.

Three Months Ended October 29, 2005

For the three months ended October 29, 2005, net income increased 69% to $10,762,000 or $0.09 per diluted share. For the corresponding period ended October 30, 2004, net income was $6,353,000 or $0.05 per diluted share. The increase in net income is primarily attributable to solid improvements in operating margin, driven by expansion in gross margin at the Company’s retail store brands. There was a minor accretive impact to third quarter earnings from the Company's Crosstown Traders business, which was acquired on June 2, 2005.

Net sales for the three months ended October 29, 2005 increased 22% to $663,322,000, compared to sales of $541,759,000 for the three months ended October 30, 2004. The Company achieved record consolidated net sales for the quarter from its retail store brands, which increased 5% during the third quarter. Consolidated comparable store sales for the Company’s retail store brands increased 3% during the three months ended October 29, 2005.

Commenting on sales and earnings, Dorrit J. Bern, Chairman, Chief Executive Officer and President of Charming Shoppes, Inc., said, “We are pleased to report strong year-over-year improvement in our third quarter results. Our improvement was led by strong sales results at our Lane Bryant and Catherines Plus Sizes brands, which drove an overall increase in gross margin at our retail store brands of 120 basis points. Additionally, in our direct-to-consumer segment, Crosstown Traders met our sales and earnings objectives during the quarter. Our consolidated operating results for the quarter exceeded our plans, resulting in a 70 basis point expansion in the operating margin.”

The quarter’s results included a number of items, which in the aggregate had no net impact on the Company’s reported diluted earnings per share. Those items included a gain from estimated insurance settlement claims related to eight stores damaged by Hurricane Katrina, and the Visa/MasterCard antitrust litigation settlement. These gains were offset by an increase in the Company’s tax provision for the repatriation of foreign earnings under the American Jobs Creation Act of 2004.

Nine Months Ended October 29, 2005

For the nine months ended October 29, 2005, net income increased 34% to $80,203,000 or $0.61 per diluted share. For the corresponding period ended October 30, 2004, net income was $59,661,000 or $0.48 per diluted share.

Net sales for the nine months ended October 29, 2005 increased 12% to $1,954,937,000, compared to sales of $1,746,234,000 for the nine months ended October 30, 2004. Consolidated comparable store sales for the Company’s retail store brands increased 2% for the nine months ended October 29, 2005. The Company’s reported results for the nine month period ended October 29, 2005 include sales and earnings from Crosstown Traders, Inc. since its acquisition on June 2, 2005.

Outlook for the Fourth Quarter ending January 28, 2006

For the fourth quarter ending January 28, 2006, the Company has reaffirmed projections for diluted earnings per share in the range of $0.13 - $0.14, which includes projected accretion of approximately $0.07 per diluted share from Crosstown Traders. This projection assumes total consolidated sales in a range of $775 to $785 million and consolidated comparable store sales increases in the 2% - 4% range for the Company’s retail store brands. The Company projects that November’s sales results will perform at the upper end of the 2% - 4% range. For the corresponding period ended January 29, 2005, diluted earnings per share for the consolidated corporation were $0.04.

Updated Outlook for the Fiscal Year ending January 28, 2006

For the fiscal year ending January 28, 2006, the Company has provided an updated projection for diluted earnings per share in the range of $0.74 - $0.75, compared to $0.52 per diluted share for the corresponding period ended January 29, 2005.

Charming Shoppes, Inc. will host its third quarter fiscal year 2006 earnings conference call today at 9:15 am Eastern time. To listen to the conference call, please dial 1-866-244-4637 approximately 10 minutes prior to the scheduled event. The conference call will also be simulcast at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. The general public is invited to listen to the conference call via the webcast or the dial-in telephone number.

This press release, a transcript of prepared conference call remarks, and certain other financial and statistical information will be available, prior to today’s conference call, on the Company’s corporate website, at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives. An audio rebroadcast of the conference call will be accessible at http://phx.corporate-ir.net/phoenix.zhtml?c=106124&p=irol-audioArchives, following the live conference.

The conference call will be recorded on behalf of Charming Shoppes, Inc. and consists of copyrighted material. It may not be re-recorded, reproduced, transmitted or rebroadcast, in whole or in part, without the Company's express written permission. Accessing this call or the rebroadcast represents consent to these terms and conditions. Participation in this call serves as consent to having any comments or statements made appear on any transcript, broadcast or rebroadcast of this call.

At the end of the period, Charming Shoppes, Inc. operated 2,246 retail stores in 48 states under the names LANE BRYANT^®, FASHION BUG^®, FASHION BUG PLUS^®, and CATHERINES PLUS SIZES^®. Additionally, apparel, accessories, footwear and gift catalogs, including the following titles, are operated by Charming Shoppes’ Crosstown Traders: Old Pueblo Traders, Bedford Fair, Willow Ridge, Lew Magram, Brownstone Studio, Regalia, Intimate Appeal, Monterey Bay Clothing Company, Coward Shoe and Figi's. During the nine months ended October 29, 2005, the Company opened 47, relocated 57, and closed 22 retail stores. The Company ended the period with 1,034 Fashion Bug and Fashion Bug Plus stores, 745 Lane Bryant stores, 467 Catherines Plus Sizes stores, and approximately 15,469,000 square feet of leased space. Additionally, Crosstown Traders operates 3 outlet stores. Please visit www.charmingshoppes.com for additional information about Charming Shoppes, Inc.

This press release contains and the Company’s conference call will contain certain forward-looking statements concerning the Company's operations, performance, and financial condition. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those indicated. Such risks and uncertainties may include, but are not limited to: failure to successfully integrate the operations of Crosstown Traders, Inc. with Charming Shoppes, Inc., the failure to implement the Company's business plan for increased profitability and growth in the plus-size women's apparel business, the failure to successfully implement the Company’s business plan for Crosstown Traders, Inc., changes in or miscalculation of fashion trends, extreme or unseasonable weather conditions, economic downturns, a weakness in overall consumer demand, failure to find suitable store locations, the ability to hire and train associates, trade restrictions and political or financial instability in countries where goods are manufactured, the interruption of merchandise flow from its centralized distribution facilities, competitive pressures, and the adverse effects of acts or threats of war, terrorism, or other armed conflict on the United States and international economies. These, and other risks and uncertainties, are detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 2005 and other Company filings with the Securities and Exchange Commission. Charming Shoppes assumes no duty to update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.

CONTACT:	Gayle M. Coolick
	Director of Investor Relations
	215-638-6955

CHARMING SHOPPES, INC.

(Unaudited)

				3rd Quarter						3rd Quarter
				Ended						Ended
	Percent			Oct. 29,			Percent			Oct 30,			Percent
(in thousands, except per share amounts)	Change			2005 (b)			of Sales (a)			2004 (c)			of Sales (a)
										(Restated)
Net sales		22.4	%	$	663,322			100.0	%	$	541,759			100.0	%
Cost of goods sold, buying, catalog, and occupancy (d)		21.9			461,451			69.6			378,533			69.9
Selling, general, and administrative (e)		21.0			181,275			27.3			149,769			27.6
Expenses related to cost reduction plan		(100.0	)		0			0.0			605			0.1
Total operating expenses		21.5			642,726			96.9			528,907			97.6
Income from operations		60.3			20,596			3.1			12,852			2.4
Other income, principally interest		124.0			1,754			0.3			783			0.1
Interest expense		23.8			(4,797	)		(0.7	)		(3,876	)		(0.7	)
Income before income taxes		79.9			17,553			2.6			9,759			1.8
Income tax provision (f)		99.4			6,791			1.0			3,406			0.6
Net income		69.4	%	$	10,762			1.6	%	$	6,353			1.2	%
Basic net income per share				$	0.09					$	0.05
Weighted average shares outstanding					120,102						117,217
Net income per share, assuming dilution				$	0.09					$	0.05
Weighted average shares and equivalents outstanding					137,552						118,633
(a)   Results do not add due to rounding.
(b)   Includes results of operations for Crosstown Traders from the acquisition date (June 2, 2005).
(c)   Restated from previously reported financial statements to reflect certain adjustments for lease accounting as discussed in Note 2 to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended January 29, 2005.
(d)   Includes a gain in 2005 of approximately $1.8 million for insurance claims related to store damages due to hurricane Katrina.
(e)   Includes a gain in 2005 of approximately $1.3 million related to the Visa/Mastercard settlement.
(f)   Includes approximately $1.4 million of taxes related to the repatriation of profits from international operations.
					Nine Months						Nine Months
					Ended						Ended
					Oct. 29,			Percent			Oct 30,			Percent
(in thousands, except per share amounts)		Change			2005 (b)			of Sales (a)			2004 (c)			of Sales (a)
											(Restated)
Net sales		12.0	%	$	1,954,937			100.0	%	$	1,746,234			100.0	%
Cost of goods sold, buying, catalog, and occupancy (e)		9.9			1,331,761			68.1			1,211,820			69.4
Selling, general, and administrative (f)		13.5			489,280			25.0			431,260			24.7
Expenses related to cost reduction plan		(100.0	)		0			0.0			605			0.0
Total operating expenses		10.8			1,821,041			93.2			1,643,685			94.1
Income from operations		30.6			133,896			6.8			102,549			5.9
Other income, principally interest (d)		323.4			6,741			0.3			1,592			0.1
Interest expense		15.4			(13,434	)		(0.7	)		(11,639	)		(0.7	)
Income before income taxes		37.5			127,203			6.5			92,502			5.3
Income tax provision (g)		43.1			47,000			2.4			32,841			1.9
Net income		34.4	%	$	80,203			4.1	%	$	59,661			3.4	%
Basic net income per share				$	0.67					$	0.52
Weighted average shares outstanding					119,513						115,474
Net income per share, assuming dilution				$	0.61					$	0.48
Weighted average shares and equivalents outstanding					136,634						132,400
(a)   Results do not add due to rounding.
(b)   Includes results of operations for Crosstown Traders from the acquisition date (June 2, 2005).
(c)   Restated from previously reported financial statements to reflect certain adjustments for lease accounting as discussed in Note 2 to the Consolidated Financial Statements included in the Company's Form 10-K for the year ended January 29, 2005.
(d)   Principally interest income and during the first quarter of Fiscal 2006, the Company recognized a $1.2 million gain from the sale of capital assets.
(e)   Includes a gain in 2005 of approximately $1.8 million for insurance claims related to store damages due to hurricane Katrina.
(f)   Includes a gain in 2005 of approximately $1.3 million related to the Visa/Mastercard settlement.
(g)   Includes approximately $1.4 million of taxes related to the repatriation of profits from international operations.

CHARMING SHOPPES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	October 29,			January 29,
(Dollars in thousands, except share amounts)	2005			2005
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	151,676		$	273,049
Available-for-sale securities		86,465			52,857
Merchandise inventories		474,484			285,120
Deferred advertising		29,128			0
Deferred taxes		28,452			15,500
Prepayments and other		93,931			86,382
Total current assets		864,136			712,908
Property, equipment, and leasehold improvements - at cost		863,287			786,028
Less accumulated depreciation and amortization		511,885			465,365
Net property, equipment, and leasehold improvements		351,402			320,663
Trademarks and other intangible assets		248,908			169,818
Goodwill		153,843			66,666
Available-for-sale securities		240			240
Other assets		40,738			33,476
Total assets	$	1,659,267		$	1,303,771
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	50,000		$	0
Accounts payable		188,879			127,819
Accrued expenses		210,822			154,681
Income taxes payable		11,141			0
Current portion - long-term debt		15,249			16,419
Total current liabilities		476,091			298,919
Deferred taxes and other non-current liabilities		150,265			101,743
Long-term debt		245,227			208,645
Stockholders’ equity
Common Stock $.10 par value:
Authorized - 300,000,000 shares
Issued - 133,177,902 shares and 132,063,290 shares, respectively		13,318			13,206
Additional paid-in capital		269,059			249,485
Treasury stock at cost - 12,265,993 shares		(84,136	)		(84,136	)
Deferred employee compensation		(15,382	)		(8,715	)
Accumulated other comprehensive loss		(2	)		0
Retained earnings		604,827			524,624
Total stockholders’ equity		787,684			694,464
Total liabilities and stockholders’ equity	$	1,659,267		$	1,303,771
Subject to reclassifications.

CHARMING SHOPPES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Thirty-nine Weeks Ended
	October 29,			October 30,
(In thousands)	2005			2004
				(Restated)
Operating activities
Net income	$	80,203		$	59,661
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		65,336			57,681
Deferred income taxes		(7,738	)		3,536
Tax benefit related to stock plans		2,365			4,187
Net loss from disposition of capital assets		241			646
Gain from securitization of Catherines portfolio		(759	)		0
Loss on sales of available-for-sale securities		0			185
Changes in operating assets and liabilities:
Merchandise inventories		(118,126	)		(68,960	)
Accounts payable		48,691			31,467
Deferred advertising		(17,249	)		0
Prepayments and other		8,905			(19,649	)
Accrued expenses and other		28,895			18,862
Income taxes payable		11,141			828
Net cash provided by operating activities		101,905			88,444
Investing activities
Investment in capital assets		(69,203	)		(42,078	)
Proceeds from sales of capital assets		2,432			0
Proceeds from sales of available-for-sale securities		17,714			45,571
Gross purchases of available-for-sale securities		(51,326	)		(30,887	)
Acquisition of Crosstown Traders, Inc., net of cash acquired		(256,467	)		0
Purchase of Catherines receivables portfolio		(56,582	)		0
Securitization of Catherines receivables portfolio		56,582			0
Securitization of Crosstown apparel-related receivables		50,000			0
Increase in other assets		(2,785	)		(5,610	)
Net cash used by investing activities		(309,635	)		(33,004	)
Financing activities
Proceeds from short-term borrowings		261,311			150,298
Repayments of short-term borrowings		(211,311	)		(150,298	)
Proceeds from long-term borrowings		50,000			13,098
Repayments of long-term borrowings		(18,480	)		(12,813	)
Payments of deferred financing costs		(850	)		(350	)
Proceeds from issuance of common stock		5,687			23,722
Net cash provided by financing activities		86,357			23,657
Increase (decrease) in cash and cash equivalents		(121,373	)		79,097
Cash and cash equivalents, beginning of period		273,049			123,781
Cash and cash equivalents, end of period	$	151,676		$	202,878
Non-cash financing and investing activities
Equipment acquired through capital leases	$	3,892		$	5,399
Certain prior-year amounts have been reclassified to conform to the current-year presentation.
Subject to reclassifications.