FORM | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☑ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
ITEM 1. | FINANCIAL STATEMENTS |
Thirteen Weeks Ended | |||||||||||||||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | ||||||||||||||||||||
Net Sales | $ | % | $ | % | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Gross Margin | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Income from Operations | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Income before Income Taxes | |||||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net Income | $ | % | $ | % | |||||||||||||||||||
Per Share Data: | |||||||||||||||||||||||
Net income per common share - basic | $ | $ | |||||||||||||||||||||
Net income per common and common equivalent share – diluted | $ | $ | |||||||||||||||||||||
Weighted average common shares outstanding – basic | |||||||||||||||||||||||
Weighted average common and common equivalent shares outstanding – diluted |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive income: | |||||||||||
Unrealized gains on marketable securities, net of taxes | |||||||||||
Comprehensive income | $ | $ |
April 29, 2023 | January 28, 2023 | April 30, 2022 | |||||||||||||||
ASSETS | (Unaudited) | (Audited) | (Unaudited) | ||||||||||||||
Current Assets: | |||||||||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||||||||
Marketable securities, at fair value | |||||||||||||||||
Inventories | |||||||||||||||||
Prepaid expenses and other current assets | |||||||||||||||||
Income tax receivable | |||||||||||||||||
Total Current Assets | |||||||||||||||||
Property and Equipment, net | |||||||||||||||||
Right of Use Assets | |||||||||||||||||
Other Assets: | |||||||||||||||||
Goodwill | |||||||||||||||||
Other intangible assets, net | |||||||||||||||||
Other assets, net | |||||||||||||||||
Total Other Assets | |||||||||||||||||
$ | $ | $ | |||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Accounts payable | $ | $ | $ | ||||||||||||||
Current lease liabilities | |||||||||||||||||
Other current and deferred liabilities | |||||||||||||||||
Total Current Liabilities | |||||||||||||||||
Noncurrent Liabilities: | |||||||||||||||||
Long-term debt | |||||||||||||||||
Long-term lease liabilities | |||||||||||||||||
Other noncurrent and deferred liabilities | |||||||||||||||||
Total Noncurrent Liabilities | |||||||||||||||||
Commitments and Contingencies (see Note 11) | |||||||||||||||||
Shareholders’ Equity: | |||||||||||||||||
Preferred stock, $ | |||||||||||||||||
Common stock, $ | |||||||||||||||||
Additional paid-in capital | |||||||||||||||||
Treasury stock, at cost, | ( | ( | ( | ||||||||||||||
Retained earnings | |||||||||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||||||||
Total Shareholders’ Equity | |||||||||||||||||
$ | $ | $ |
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 28, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized gains on marketable securities, net of taxes | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock and tax withholdings related to share-based awards | ( | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
BALANCE, April 29, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
BALANCE, January 29, 2022 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Repurchase of common stock and tax withholdings related to share-based awards | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
BALANCE, April 30, 2022 | $ | $ | $ | ( | $ | $ | $ |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Non-cash lease expense | |||||||||||
Loss on disposal and impairment of property and equipment, net | |||||||||||
Deferred tax benefit | ( | ||||||||||
Share-based compensation expense | |||||||||||
Changes in assets and liabilities: | |||||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ||||||||||
Income tax receivable | |||||||||||
Accounts payable | ( | ( | |||||||||
Accrued and other liabilities | ( | ( | |||||||||
Lease liability | ( | ( | |||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchases of marketable securities | ( | ||||||||||
Proceeds from sale of marketable securities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash Flows from Financing Activities: | |||||||||||
Payments on borrowings | ( | ||||||||||
Payments of debt issuance costs | ( | ||||||||||
Proceeds from issuance of common stock | |||||||||||
Repurchase of treasury stock under repurchase program | ( | ||||||||||
Payments of tax withholdings related to share-based awards | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net decrease in cash and cash equivalents | ( | ( | |||||||||
Cash and Cash Equivalents, Beginning of period | |||||||||||
Cash and Cash Equivalents, End of period | $ | $ | |||||||||
Supplemental Disclosures of Cash Flow Information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash (paid) received for income taxes, net | $ | ( | $ |
Thirteen Weeks Ended | |||||||||||||||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||||||||||||||
Chico’s | $ | % | $ | % | |||||||||||||||||||
WHBM | |||||||||||||||||||||||
Soma | |||||||||||||||||||||||
Total Net Sales | $ | % | $ | % |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Beginning gift card liability | $ | $ | |||||||||
Issuances | |||||||||||
Redemptions | ( | ( | |||||||||
Gift card breakage | ( | ( | |||||||||
Ending gift card liability | $ | $ | |||||||||
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Beginning balance rewards deferred revenue | $ | $ | |||||||||
Reduction in revenue, net | |||||||||||
Ending balance rewards deferred revenue | $ | $ |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Operating lease cost (1) | $ | $ |
April 29, 2023 | January 28, 2023 | April 30, 2022 | |||||||||||||||
Right of use assets | $ | $ | $ | ||||||||||||||
Current lease liabilities | $ | $ | $ | ||||||||||||||
Long-term lease liabilities | |||||||||||||||||
Total operating lease liabilities | $ | $ | $ | ||||||||||||||
Weighted Average Remaining Lease Term (years) | |||||||||||||||||
Weighted Average Discount Rate (1) | % | % | % |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash outflows | $ | $ | |||||||||
Right of use assets obtained in exchange for lease obligations, non-cash |
Fiscal Year Ending: | |||||
February 3, 2024 | $ | ||||
February 1, 2025 | |||||
January 31, 2026 | |||||
January 30, 2027 | |||||
January 29, 2028 | |||||
Thereafter | |||||
Total future minimum lease payments | $ | ||||
Less imputed interest | ( | ||||
Total | $ |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Unvested, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested, end of period |
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Unvested, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Unvested, end of period |
Number of Units/ Shares | Weighted Average Grant Date Fair Value | ||||||||||
Unvested, beginning of period | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Unvested, end of period |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
Numerator: | |||||||||||
Net income | $ | $ | |||||||||
Net income allocated to participating securities | ( | ( | |||||||||
Net income available to common shareholders | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding – basic | |||||||||||
Dilutive effect of non-participating securities | |||||||||||
Weighted average common and common equivalent shares outstanding – diluted | |||||||||||
Net income per common share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ |
Level 1 | — | Unadjusted quoted prices in active markets for identical assets or liabilities | |||||||||
Level 2 | — | Unadjusted quoted prices in active markets for similar assets or liabilities; or Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or Inputs other than quoted prices that are observable for the asset or liability | |||||||||
Level 3 | — | Unobservable inputs for the asset or liability |
Fair Value Measurements at the End of the Reporting Date Using | |||||||||||||||||||||||
Balance as of April 29, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||||
Current Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market accounts | $ | $ | $ | $ | |||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
U.S. government agencies | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Deferred compensation plan | |||||||||||||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | |||||||||||||||||||
Fair Value Measurements at the End of the Reporting Date Using | |||||||||||||||||||||||
Balance as of January 28, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||||
Current Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market accounts | $ | $ | $ | $ | |||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
U.S. government agencies | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Deferred compensation plan | |||||||||||||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | |||||||||||||||||||
Fair Value Measurements at the End of the Reporting Date Using | |||||||||||||||||||||||
Balance as of April 30, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Recurring fair value measurements: | |||||||||||||||||||||||
Current Assets | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market accounts | $ | $ | $ | $ | |||||||||||||||||||
Marketable securities: | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Deferred compensation plan | |||||||||||||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | |||||||||||||||||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
(in millions, except per share amounts) | |||||||||||
Net sales | $ | 535 | $ | 541 | |||||||
Income from operations | 53 | 45 | |||||||||
Net income | 40 | 35 | |||||||||
Net income per common and common equivalent share - diluted | 0.32 | 0.28 |
Thirteen Weeks Ended | |||||||||||||||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Chico’s | $ | 274 | 51.2 | % | $ | 264 | 48.9 | % | |||||||||||||||
WHBM | 153 | 28.7 | 169 | 31.2 | |||||||||||||||||||
Soma | 108 | 20.1 | 107 | 19.9 | |||||||||||||||||||
Total Net Sales | $ | 535 | 100.0 | % | $ | 541 | 100.0 | % |
Thirteen Weeks Ended | ||||||||||||||
April 29, 2023 | April 30, 2022 | |||||||||||||
Compared to Fiscal 2022 | Compared to Fiscal 2021 | |||||||||||||
Chico’s | 4.9 | % | 52.0 | % | ||||||||||
WHBM | (8.0) | 64.8 | ||||||||||||
Soma | (2.5) | (1.4) | ||||||||||||
Total Company | (0.6) | 40.6 |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Cost of goods sold | $ | 310 | $ | 324 | |||||||
Gross margin | 225 | 217 | |||||||||
Gross margin percentage | 42.1 | % | 40.0 | % |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Selling, general and administrative expenses | $ | 172 | $ | 171 | |||||||
Percentage of total net sales | 32.1 | % | 31.6 | % |
Thirteen Weeks Ended | |||||||||||
April 29, 2023 | April 30, 2022 | ||||||||||
(dollars in millions) (1) | |||||||||||
Net cash provided by (used in) operating activities | $ | 12 | $ | (0.2) | |||||||
Net cash used in investing activities | (6) | (3) | |||||||||
Net cash used in financing activities | (51) | (8) | |||||||||
Net decrease in cash and cash equivalents | $ | (46) | $ | (11) |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans (b) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Publicly Announced Plans | |||||||||||||||||||||||||
January 29, 2023 - February 25, 2023 | — | $ | — | — | $ | 55,192 | |||||||||||||||||||||||
February 26, 2023 - April 1, 2023 | 4,250,308 | 6.10 | 3,250,000 | 35,386 | |||||||||||||||||||||||||
April 2, 2023 - April 29, 2023 | — | — | — | 35,386 | |||||||||||||||||||||||||
Total | 4,250,308 | 6.10 | 3,250,000 |
ITEM 6. | EXHIBITS |
Exhibit 10.1 | Form of 2020 Omnibus Stock and Incentive Plan Restricted Stock Agreement for Employees (for awards on or after March 1, 2023) (incorporated by reference to Exhibit 10.54 to the Company’s Form 10-K, as filed with the SEC on March 14, 2023) | ||||||||||
Exhibit 10.2 | Form of 2020 Omnibus Stock and Incentive Plan Performance Award Agreement for Performance Share Units for Employees (for awards on or after March 1, 2023) (incorporated by reference to Exhibit 10.55 to the Company’s Form 10-K, as filed with the SEC on March 14, 2023) | ||||||||||
Exhibit 31.1 | |||||||||||
Exhibit 31.2 | |||||||||||
Exhibit 32.1 | |||||||||||
Exhibit 32.2 | |||||||||||
Exhibit 101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the Quarter Ended April 29, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Shareholders' Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | ||||||||||
Exhibit 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the Quarter Ended April 29, 2023, formatted in Inline XBRL (included within Exhibit 101). |
CHICO'S FAS, INC. | ||||||||||||||||||||
Date: | June 7, 2023 | By: | /s/ Molly Langenstein | |||||||||||||||||
Molly Langenstein | ||||||||||||||||||||
Chief Executive Officer, President and Director | ||||||||||||||||||||
Date: | June 7, 2023 | By: | /s/ Patrick J. Guido | |||||||||||||||||
Patrick J. Guido | ||||||||||||||||||||
Executive Vice President - Chief Financial Officer | ||||||||||||||||||||
Date: | June 7, 2023 | By: | /s/ David M. Oliver | |||||||||||||||||
David M. Oliver | ||||||||||||||||||||
Senior Vice President - Finance, Controller and Chief Accounting Officer |
/s/ Molly Langenstein | ||||||||
Name: | Molly Langenstein | |||||||
Title: | Chief Executive Officer, President and Director |
/s/ Patrick J. Guido | ||||||||
Name: | Patrick J. Guido | |||||||
Title: | Executive Vice President - Chief Financial Officer |
/s/ Molly Langenstein | ||
Molly Langenstein | ||
Chief Executive Officer, President and Director |
/s/ Patrick J. Guido | ||
Patrick J. Guido | ||
Executive Vice President - Chief Financial Officer |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 39,906 | $ 34,932 |
Other comprehensive income: | ||
Unrealized gains on marketable securities, net of taxes | 37 | 0 |
Comprehensive income | $ 39,943 | $ 34,932 |
Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares |
Apr. 29, 2023 |
Jan. 28, 2023 |
Apr. 30, 2022 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Preferred share par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred shares authorized (in shares) | 2,500,000 | 2,500,000 | 2,500,000 |
Preferred shares issued (in shares) | 0 | 0 | 0 |
Preferred shares outstanding (in shares) | 0 | 0 | 0 |
Common share par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 |
Common shares issued (in shares) | 167,971,000 | 166,320,000 | 166,458,000 |
Common shares outstanding (in shares) | 123,424,000 | 125,023,000 | 125,161,000 |
Treasury shares at cost (in shares) | 44,547,000 | 41,297,000 | 41,297,000 |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Apr. 29, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc., a Florida corporation, and its wholly owned subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, such interim financial statements reflect all normal, recurring adjustments considered necessary to present fairly the condensed consolidated financial position, the results of operations and cash flows for the interim periods presented. All significant intercompany balances and transactions have been eliminated in consolidation. The fiscal year ended January 28, 2023 balance sheet data was derived from audited consolidated financial statements. For further information, refer to the consolidated financial statements and notes thereto for the fiscal year ended January 28, 2023, included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2023 filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023 (“2022 Annual Report on Form 10-K”). As used in this report, all references to “we,” “us,” “our”, “the Company” and “Chico’s FAS,” refer to Chico’s FAS, Inc. and all of its wholly owned subsidiaries. Our fiscal years end on the Saturday closest to January 31 and are designated by the calendar year in which the fiscal year commences. Operating results for the thirteen weeks ended April 29, 2023 are not necessarily indicative of the results that may be expected for the entire year. Adoption of New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs: Disclosure of Supplier Finance Program Obligations,” to improve the disclosures of supplier finance programs. Specifically, the ASU requires disclosure of key terms of the supplier finance programs and a roll-forward of the related obligations. The amendments in this ASU do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The ASU is effective for the fiscal years, and the interim periods within those years, beginning after December 15, 2022, except for the amendment on roll-forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company did not engage in supplier finance programs during the first quarter of fiscal 2023 and, therefore, we have no incremental disclosures as required by ASU 2022-04. There were no new accounting pronouncements adopted by the Company during the thirteen weeks ended April 29, 2023.
|
Recently Issued Accounting Pronouncements |
3 Months Ended |
---|---|
Apr. 29, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTSThe Company currently has no material recent accounting pronouncements yet to be adopted. |
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | REVENUE RECOGNITION Disaggregated Revenue The table below disaggregates our operating segment revenue by brand, which we believe provides a meaningful depiction of the nature of our revenue. Amounts shown include licensing and wholesale revenue, which is not a significant component of total revenue, and is aggregated within the respective brands.
Contract Liability Contract liabilities in the unaudited condensed consolidated balance sheets are comprised of obligations associated with our gift card and customer rewards programs. As of April 29, 2023, January 28, 2023, and April 30, 2022, contract liabilities primarily consisted of gift cards of $35.3 million, $42.6 million and $36.7 million, respectively. For the thirteen weeks ended April 29, 2023, the Company recognized $11.2 million of revenue that was previously included in the gift card contract liability as of January 28, 2023. For the thirteen weeks ended April 30, 2022, the Company recognized $11.5 million of revenue that was previously included in the gift card contract liability as of January 29, 2022.
The Company maintains customer rewards programs in which customers earn points toward rewards for qualifying purchases and other marketing activities. Upon reaching specified point values, customers are issued a reward, which they may redeem on merchandise purchases at the Company’s stores or on its website. Generally, rewards earned must be redeemed within 60 days from the date of issuance. The Company defers a portion of the merchandise sales based on the estimated standalone selling price of the points earned. This deferred revenue is recognized as the rewards are redeemed or expire. While historically this point based program was specific to Soma, during the second quarter of fiscal year 2022, Chico’s FAS extended its point based rewards program to Chico’s and WHBM. As of April 29, 2023, January 28, 2023, and April 30, 2022, the rewards deferred revenue balance was $8.5 million, $7.4 million and $0.8 million, respectively.
Performance Obligation For the thirteen weeks ended April 29, 2023, and April 30, 2022, revenue recognized from performance obligations related to prior periods were not material. Revenue to be recognized in future periods related to performance obligations is not expected to be material.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASESThe Company leases retail stores, a limited amount of office space and certain equipment under operating leases expiring in various years through the fiscal year ending 2033. All of our leases have been classified as operating leases and are recognized and measured as such. Certain operating leases provide for renewal options that are at a pre-determined period and rental value. Furthermore, certain leases provide that we may cancel the lease if our retail sales at that location fall below an established level. In the normal course of business, operating leases are typically renewed or replaced by other leases. Escalation of operating lease payments of certain leases depend on an existing index or rate, such as the consumer price index or the market interest rate. These are considered variable lease payments and are included in lease payments when the escalation is known. Operating lease expense was as follows:
(1) Includes approximately $13.3 million and $9.5 million in variable lease costs for the thirteen weeks ended April 29, 2023, and April 30, 2022, respectively. Supplemental balance sheet information related to operating leases was as follows:
(1) The incremental borrowing rate used by the Company is based on the rate at which the Company could borrow funds using its credit rating for a collateralized loan of similar term to the lease. The weighted average discount rate represents a weighted average of the incremental borrowing rate for each lease weighted based on the remaining fixed lease obligations. Supplemental cash flow information related to operating leases was as follows:
Maturities of operating lease liabilities as of April 29, 2023 were as follows:
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Share-Based Compensation |
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Share-Based Compensation | SHARE-BASED COMPENSATION For the thirteen weeks ended April 29, 2023, and April 30, 2022, share-based compensation expense was $3.1 million and $3.9 million, respectively. As of April 29, 2023, approximately 4.4 million shares remain available for future grants of equity awards under our 2020 Omnibus Stock and Incentive Plan. Restricted Stock Awards Restricted stock awards vest in equal annual installments over a three-year period from the date of grant, except for a restricted stock award granted to our then Chief Executive Officer in fiscal 2019, which vests over a four-year period from the date of grant, and restricted stock awards granted in March 2021, which vest 50% one year from the date of grant, 30% two years from the date of grant and 20% three years from the date of grant. Restricted stock award activity for the thirteen weeks ended April 29, 2023 was as follows:
Restricted Stock Units Restricted stock units vest 100% one year from the date of grant with certain rights to defer settlement in shares of our common stock, except for restricted stock units granted in March 2021, which vest 50% one year from the date of grant, 30% two years from the date of grant and 20% three years from the date of grant, and restricted stock units granted in March 2022, which vest in equal annual installments over a three-year period from the date of grant. Restricted stock unit activity for the thirteen weeks ended April 29, 2023 was as follows:
Performance-based Restricted Stock Units During the thirteen weeks ended April 29, 2023, we granted performance-based restricted stock units (“PSUs”), contingent upon the achievement of Company-specific performance goals during the three fiscal years 2023 through 2025. Any units earned as a result of the achievement of the performance goals of the PSUs will vest three years from the date of grant and will be settled in shares of our common stock. PSU activity for the thirteen weeks ended April 29, 2023 was as follows:
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Income Taxes |
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Apr. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The provision for income taxes is based on a current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events. Our effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items and the mix of earnings across jurisdictions. For the first quarter of fiscal year 2023 (the “first quarter”), the effective tax rate was 24.3% compared to 21.4% for the first quarter of fiscal year 2022 (“last year’s first quarter”). The first quarter effective tax rate of 24.3% primarily reflects favorable share-based compensation benefit. Last year’s first quarter effective tax rate of 21.4% primarily reflects favorable share-based compensation benefit and the reduction in the liability for future reversing deferred tax liabilities. As of April 29, 2023, our unaudited condensed consolidated balance sheet reflected a $7.9 million income tax receivable related to the recovery of federal income taxes paid in prior years and other tax law changes as a result of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”).
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Income Per Share |
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Income Per Share | INCOME PER SHARE In accordance with relevant accounting guidance, unvested share-based payment awards that include non-forfeitable rights to dividends, whether paid or unpaid, are considered participating securities. As a result, such awards are required to be included in the calculation of income per common share pursuant to the "two-class" method. For the Company, participating securities are comprised entirely of unvested restricted stock awards granted prior to fiscal 2020. Net income per share is determined using the two-class method when it is more dilutive than the treasury stock method. Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period, including participating securities. Diluted net income per share reflects the dilutive effect of potential common shares from non-participating securities such as restricted stock awards granted after fiscal 2019, stock options, PSUs and restricted stock units. The following table sets forth the computation of net income per basic and diluted share shown on the face of the accompanying condensed consolidated statements of income:
For the thirteen weeks ended April 29, 2023 and April 30, 2022, 1.6 million and 0.1 million potential shares of common stock, respectively, were excluded from the diluted income per common share calculation relating to non-participating securities, due to the antidilutive effect of including these shares.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Our financial instruments generally consist of cash, money market accounts, marketable securities, assets held in our non-qualified deferred compensation plan, accounts receivable and payable, and debt. Cash, accounts receivable and accounts payable are carried at cost, less reserves for credit losses as applicable, which approximates their fair value due to the short-term nature of the instruments. Marketable securities are classified as available-for-sale and as of April 29, 2023, consisted of U.S. government agencies, corporate bonds and commercial paper, with $39.0 million of securities with maturity dates within one year or less and $3.0 million with maturity dates over one year. We consider all marketable securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities within current assets on the unaudited condensed consolidated balance sheets, as applicable, as they were available to support current operational liquidity needs. Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive gain (loss) until realized, and any credit risk-related losses recognized in net income during the period incurred. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Entities are required to use a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:
Assets Measured on a Recurring Basis We measure certain financial assets at fair value on a recurring basis, including our marketable securities, as applicable, which are classified as available-for-sale securities, certain cash equivalents, specifically our money market accounts and assets held in our non-qualified deferred compensation plan, as applicable. The money market accounts are valued based on quoted market prices in active markets. Our marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. government securities, which are valued based on quoted market prices in active markets. The investments in our non-qualified deferred compensation plan are valued using quoted market prices and are included in other assets on our unaudited condensed consolidated balance sheets. Assets Measured on a Nonrecurring Basis From time to time, we measure certain assets at fair value on a nonrecurring basis when carrying value exceeds fair value. This includes the evaluation of long-lived assets, goodwill and other intangible assets for impairment using Company-specific assumptions that would fall within Level 3 of the fair value hierarchy. Assets that are measured at fair value on a nonrecurring basis are remeasured when carrying value exceeds fair value. Carrying value after impairment approximates fair value. We assess the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses market participant rents and a market participant discount rate to calculate the fair value of right of use (“ROU”) assets. The Company uses discounted future cash flows of the asset or asset group using a discount rate that approximates the cost of capital of a market participant to quantify fair value for other long-lived assets within the asset group, which are primarily leasehold improvements. The asset group is defined as the lowest level for which identifiable cash flows are available and is largely independent of the cash flows of other groups of assets, which for our retail stores, is primarily at the store level. To assess the fair value of goodwill, we have historically utilized both an income approach and a market approach. Inputs used to calculate the fair value based on the income approach primarily include estimated future cash flows, discounted at a rate that approximates the cost of capital of a market participant. Inputs used to calculate the fair value based on the market approach include identifying sales and EBITDA multiples based on guidelines for similar publicly traded companies and recent transactions. To assess the fair value of trademarks, we utilize a relief from royalty approach. Inputs used to calculate the fair value of the trademarks primarily include future sales projections, discounted at a rate that approximates the cost of capital of a market participant and an estimated royalty rate. As of April 29, 2023, January 28, 2023, and April 30, 2022, our revolving loan and letter of credit facility approximates fair value, as this instrument has a variable interest rate that approximates current market rates (Level 2 criteria). Fair value calculations contain significant judgments and estimates, which may differ from actual results due to, among other things, economic conditions, changes to the business model or changes in operating performance. We conduct reviews on a quarterly basis to verify pricing, assess liquidity and determine if significant inputs have changed that would impact the fair value hierarchy disclosure. In accordance with the provisions of the guidance, we categorized our financial assets and liabilities, which are valued on a recurring and nonrecurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:
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Debt |
3 Months Ended |
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Apr. 29, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DEBT On February 2, 2022, the Company and certain material domestic subsidiaries entered into Amendment No. 2 (the “Amendment”) to its credit agreement (as amended, the “Credit Agreement”) originally entered into on August 2, 2018 and amended October 30, 2020, by and among the Company, certain material domestic subsidiaries as co-borrowers and guarantors, Wells Fargo Bank, National Association (“Wells Fargo Bank”), as Agent, letter of credit issuer and swing line lender, and certain lenders party thereto. Our obligations under the Credit Agreement are guaranteed by the guarantors and are secured by a first priority lien on certain assets of the Company and certain material domestic subsidiaries, including inventory, accounts receivable, cash deposits, certain insurance proceeds, real estate, fixtures and certain intellectual property. The Credit Agreement provides for a five-year asset-based senior secured revolving loan (“ABL”) and letter of credit facility of up to $285.0 million, maturing February 2, 2027. The interest rate applicable to Term Secured Overnight Financing Rate (“SOFR”) Loans drawn under the ABL is equal to Term SOFR plus 1.60% (subject to a further decrease to Term SOFR plus 1.35% or an increase to Term SOFR plus 1.85% based upon average quarterly excess availability under the ABL). The Credit Agreement also provides for a $15.0 million first-in last-out (“FILO”) loan. The interest rate applicable to the FILO is equal to Term SOFR plus 3.60% (subject to a further decrease to Term SOFR plus 3.35% or an increase to Term SOFR plus 3.85% based on average quarterly excess availability under the FILO). However, for any ABL or FILO with a SOFR interest rate period of six months, the interest rate applicable to the ABL and FILO is increased by 30 basis points. The Credit Agreement contains customary representations, warranties, and affirmative covenants, as well as customary negative covenants, that, among other things restrict, subject to certain exceptions, the ability of the Company and certain of its domestic subsidiaries to (i) incur liens, (ii) make investments, (iii) issue or incur additional indebtedness, (iv) undergo significant corporate changes, including mergers and acquisitions, (v) make dispositions, (vi) make restricted payments, (vii) prepay other indebtedness and (viii) enter into certain other restrictive agreements. The Company may pay cash dividends and repurchase shares under its share buyback program, subject to certain thresholds of available borrowings based upon the lesser of the aggregate amount of commitments under the Credit Agreement and the borrowing base, determined after giving effect to any such transaction or payment, on a pro forma basis. In addition, the Company must pay a commitment fee per annum on the unused portion of the commitments under the Credit Agreement. As of April 29, 2023, $24.0 million in net borrowings were outstanding under the Credit Agreement. Availability under the Credit Agreement is determined based upon a monthly borrowing base calculation, which includes eligible credit card receivables, real estate and inventory, less outstanding borrowings, letters of credit and certain designated reserves. As of April 29, 2023, the available additional borrowing capacity under the Credit Agreement was approximately $263.0 million, inclusive of the current loan cap of $30.0 million. As of April 29, 2023, deferred financing costs of $3.1 million were outstanding related to the Credit Agreement and are presented in other current assets in the accompanying unaudited condensed consolidated balance sheet.
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Share Repurchases |
3 Months Ended |
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Apr. 29, 2023 | |
Equity [Abstract] | |
Share Repurchases | SHARE REPURCHASESDuring the thirteen weeks ended April 29, 2023, under our $300.0 million share repurchase program announced in November 2015, we repurchased 3.25 million shares at a total cost of approximately $19.8 million, at an average price of $6.09 per share. As of April 29, 2023, the Company had $35.4 million remaining for future repurchases under the program. However, we have no continuing obligation to repurchase shares under this authorization, and the timing, actual number and value of any additional shares to be purchased will depend on the performance of our stock price, market conditions and other considerations. |
Commitments and Contingencies |
3 Months Ended |
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Apr. 29, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIESWe are not currently a party to any material legal proceedings other than claims and lawsuits arising in the normal course of our business. All such matters are subject to uncertainties, and outcomes may not be predictable. Consequently, as of April 29, 2023, the ultimate aggregate amounts of monetary liability or financial impact with respect to such matters are not estimable. However, while such matters could affect our consolidated operating results when resolved in future periods, management believes that, upon final disposition, any monetary liability or financial impact to us would not be material to our annual consolidated financial statements. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of Chico’s FAS, Inc., a Florida corporation, and its wholly owned subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, such interim financial statements reflect all normal, recurring adjustments considered necessary to present fairly the condensed consolidated financial position, the results of operations and cash flows for the interim periods presented. All significant intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04, “Supplier Finance Programs: Disclosure of Supplier Finance Program Obligations,” to improve the disclosures of supplier finance programs. Specifically, the ASU requires disclosure of key terms of the supplier finance programs and a roll-forward of the related obligations. The amendments in this ASU do not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. The ASU is effective for the fiscal years, and the interim periods within those years, beginning after December 15, 2022, except for the amendment on roll-forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company did not engage in supplier finance programs during the first quarter of fiscal 2023 and, therefore, we have no incremental disclosures as required by ASU 2022-04. There were no new accounting pronouncements adopted by the Company during the thirteen weeks ended April 29, 2023.
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Fair Value Measurements | FAIR VALUE MEASUREMENTS Our financial instruments generally consist of cash, money market accounts, marketable securities, assets held in our non-qualified deferred compensation plan, accounts receivable and payable, and debt. Cash, accounts receivable and accounts payable are carried at cost, less reserves for credit losses as applicable, which approximates their fair value due to the short-term nature of the instruments. Marketable securities are classified as available-for-sale and as of April 29, 2023, consisted of U.S. government agencies, corporate bonds and commercial paper, with $39.0 million of securities with maturity dates within one year or less and $3.0 million with maturity dates over one year. We consider all marketable securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities within current assets on the unaudited condensed consolidated balance sheets, as applicable, as they were available to support current operational liquidity needs. Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected in accumulated other comprehensive gain (loss) until realized, and any credit risk-related losses recognized in net income during the period incurred. For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Entities are required to use a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:
Assets Measured on a Recurring Basis We measure certain financial assets at fair value on a recurring basis, including our marketable securities, as applicable, which are classified as available-for-sale securities, certain cash equivalents, specifically our money market accounts and assets held in our non-qualified deferred compensation plan, as applicable. The money market accounts are valued based on quoted market prices in active markets. Our marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third-party pricing entities, except for U.S. government securities, which are valued based on quoted market prices in active markets. The investments in our non-qualified deferred compensation plan are valued using quoted market prices and are included in other assets on our unaudited condensed consolidated balance sheets. Assets Measured on a Nonrecurring Basis From time to time, we measure certain assets at fair value on a nonrecurring basis when carrying value exceeds fair value. This includes the evaluation of long-lived assets, goodwill and other intangible assets for impairment using Company-specific assumptions that would fall within Level 3 of the fair value hierarchy. Assets that are measured at fair value on a nonrecurring basis are remeasured when carrying value exceeds fair value. Carrying value after impairment approximates fair value. We assess the carrying amount of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses market participant rents and a market participant discount rate to calculate the fair value of right of use (“ROU”) assets. The Company uses discounted future cash flows of the asset or asset group using a discount rate that approximates the cost of capital of a market participant to quantify fair value for other long-lived assets within the asset group, which are primarily leasehold improvements. The asset group is defined as the lowest level for which identifiable cash flows are available and is largely independent of the cash flows of other groups of assets, which for our retail stores, is primarily at the store level. To assess the fair value of goodwill, we have historically utilized both an income approach and a market approach. Inputs used to calculate the fair value based on the income approach primarily include estimated future cash flows, discounted at a rate that approximates the cost of capital of a market participant. Inputs used to calculate the fair value based on the market approach include identifying sales and EBITDA multiples based on guidelines for similar publicly traded companies and recent transactions. To assess the fair value of trademarks, we utilize a relief from royalty approach. Inputs used to calculate the fair value of the trademarks primarily include future sales projections, discounted at a rate that approximates the cost of capital of a market participant and an estimated royalty rate.
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The table below disaggregates our operating segment revenue by brand, which we believe provides a meaningful depiction of the nature of our revenue. Amounts shown include licensing and wholesale revenue, which is not a significant component of total revenue, and is aggregated within the respective brands.
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Contract with Customer, Contract Asset, Contract Liability, and Receivable |
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Leases (Tables) |
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Lease Cost | Operating lease expense was as follows:
(1) Includes approximately $13.3 million and $9.5 million in variable lease costs for the thirteen weeks ended April 29, 2023, and April 30, 2022, respectively. Supplemental cash flow information related to operating leases was as follows:
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Supplemental Balance Sheet Information Related to Operating Leases | Supplemental balance sheet information related to operating leases was as follows:
(1) The incremental borrowing rate used by the Company is based on the rate at which the Company could borrow funds using its credit rating for a collateralized loan of similar term to the lease. The weighted average discount rate represents a weighted average of the incremental borrowing rate for each lease weighted based on the remaining fixed lease obligations.
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Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of April 29, 2023 were as follows:
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Share-Based Compensation (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Activity | Restricted stock award activity for the thirteen weeks ended April 29, 2023 was as follows:
Restricted stock unit activity for the thirteen weeks ended April 29, 2023 was as follows:
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Schedule of Performance-Based Restricted Stock Unit Activity | PSU activity for the thirteen weeks ended April 29, 2023 was as follows:
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Income Per Share (Tables) |
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Computation of Basic and Diluted Net Income Per Share | The following table sets forth the computation of net income per basic and diluted share shown on the face of the accompanying condensed consolidated statements of income:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Assets Valued on a Recurring Basis | In accordance with the provisions of the guidance, we categorized our financial assets and liabilities, which are valued on a recurring and nonrecurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:
|
Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
Jan. 28, 2023 |
Jan. 29, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 534,743 | $ 540,915 | ||
Total net sales, as a percentage | 100.00% | 100.00% | ||
Contract liabilities | $ 35,291 | $ 36,730 | $ 42,649 | $ 43,536 |
Contract liability revenue recognized | 11,200 | 11,500 | ||
Chico’s | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 273,650 | $ 264,466 | ||
Total net sales, as a percentage | 51.20% | 48.90% | ||
WHBM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 153,470 | $ 169,029 | ||
Total net sales, as a percentage | 28.70% | 31.20% | ||
Soma | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Net Sales | $ 107,623 | $ 107,420 | ||
Total net sales, as a percentage | 20.10% | 19.90% |
Revenue Recognition - Gift Card Contract Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Contract With Customer Liability [Roll Forward] | ||
Beginning balance rewards deferred revenue | $ 42,649 | $ 43,536 |
Issuances | 8,224 | 9,060 |
Redemptions | (14,171) | (14,584) |
Gift card breakage | (1,411) | (1,282) |
Ending balance rewards deferred revenue | $ 35,291 | $ 36,730 |
Revenue Recognition - Contract Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Contract With Customer Liability [Roll Forward] | ||
Beginning balance rewards deferred revenue | $ 42,649 | $ 43,536 |
Ending balance rewards deferred revenue | 35,291 | 36,730 |
Customer Rewards Program | ||
Contract With Customer Liability [Roll Forward] | ||
Beginning balance rewards deferred revenue | 7,441 | 626 |
Reduction in revenue, net | 1,068 | 131 |
Ending balance rewards deferred revenue | $ 8,509 | $ 757 |
Leases - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Leases [Abstract] | ||
Operating lease cost | $ 56,489 | $ 53,415 |
Variable lease cost | $ 13,300 | $ 9,500 |
Leases - Supplemental Balance Sheet Information Related to Operating Leases (Details) - USD ($) $ in Thousands |
Apr. 29, 2023 |
Jan. 28, 2023 |
Apr. 30, 2022 |
---|---|---|---|
Leases [Abstract] | |||
Right of use assets | $ 457,695 | $ 435,321 | $ 439,896 |
Current lease liabilities | 156,494 | 153,202 | 150,476 |
Long-term lease liabilities | 365,422 | 349,409 | 355,851 |
Total operating lease liabilities | $ 521,916 | $ 502,611 | $ 506,327 |
Weighted Average Remaining Lease Term (years) | 4 years 2 months 12 days | 4 years 2 months 12 days | 3 years 10 months 24 days |
Weighted average discount rate | 5.60% | 5.30% | 4.40% |
Leases - Supplemental Cash Flow Information Related to Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows | $ 49,230 | $ 67,908 |
Right of use assets obtained in exchange for lease obligations, non-cash | $ 61,640 | $ 14,786 |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Apr. 29, 2023 |
Jan. 28, 2023 |
Apr. 30, 2022 |
---|---|---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
February 3, 2024 | $ 143,347 | ||
February 1, 2025 | 155,425 | ||
January 31, 2026 | 111,378 | ||
January 30, 2027 | 76,659 | ||
January 29, 2028 | 48,643 | ||
Thereafter | 59,334 | ||
Total future minimum lease payments | 594,786 | ||
Less imputed interest | (72,870) | ||
Total | $ 521,916 | $ 502,611 | $ 506,327 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 24.30% | 21.40% |
CARES Act, COVID-19 | ||
Income Tax Examination [Line Items] | ||
Income tax receivable | $ 7.9 |
Income Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Numerator: | ||
Net income | $ 39,906 | $ 34,932 |
Net income allocated to participating securities | (58) | (178) |
Net income available to common shareholders | $ 39,848 | $ 34,754 |
Denominator: | ||
Weighted average common shares outstanding – basic (in shares) | 119,702 | 118,993 |
Dilutive effect of non-participating securities (in shares) | 3,673 | 4,318 |
Weighted average common and common equivalent shares outstanding – diluted (in shares) | 123,375 | 123,311 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.33 | $ 0.29 |
Diluted (in dollars per share) | $ 0.32 | $ 0.28 |
Income Per Share - Additional Information (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Apr. 29, 2023 |
Apr. 30, 2022 |
|
Earnings Per Share [Abstract] | ||
Number of antidilutive securities (in shares) | 1.6 | 0.1 |
Debt (Details) - Revolving credit facility - USD ($) |
Feb. 02, 2022 |
Apr. 29, 2023 |
---|---|---|
Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt, term | 5 years | |
Borrowing capacity | $ 285,000,000 | |
Long-term debt | $ 24,000,000 | |
Additional borrowing capacity | 263,000,000 | |
Excess availability of borrowing | 30,000,000 | |
Deferred financing costs | $ 3,100,000 | |
Line of credit | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.60% | |
Line of credit | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.35% | |
Line of credit | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.85% | |
FILO | ||
Debt Instrument [Line Items] | ||
Borrowing capacity | $ 15,000,000 | |
Basis points | 0.30% | |
FILO | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.85% | |
FILO | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.60% | |
FILO | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.35% |
Share Repurchases (Details) $ / shares in Units, shares in Thousands |
3 Months Ended |
---|---|
Apr. 29, 2023
USD ($)
$ / shares
shares
| |
Equity [Abstract] | |
Shares authorized to be repurchased | $ 300,000,000 |
Shares repurchased (in shares) | shares | 3,250 |
Cost of shares repurchased | $ 19,800,000 |
Weighted average cost per share of shares repurchased (in dollars per share) | $ / shares | $ 6.09 |
Share repurchase program, amount remaining for future repurchases | $ 35,400,000 |
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