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 | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % of Sales | Amount | % of Sales | Amount | % of Sales | Amount | % of Sales | ||||||||||||||||||||||||||||||||||||||||
Net Sales | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||||||||||||||||||||||||||
Gross Profit | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Merger-related costs | |||||||||||||||||||||||||||||||||||||||||||||||
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 | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Unrealized gains (losses) on marketable securities, net of taxes | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
October 28, 2023 | January 28, 2023 | October 29, 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 12) | |||||||||||||||||
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, July 29, 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, October 28, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
BALANCE, July 30, 2022 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized losses on marketable securities, net of taxes | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock and tax withholdings related to share-based awards | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
BALANCE, October 29, 2022 | $ | $ | $ | ( | $ | $ | ( | $ |
Thirty-Nine 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, October 28, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
BALANCE, January 29, 2022 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized losses on marketable securities, net of taxes | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Issuance of common stock | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Dividends on common stock | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock and tax withholdings related to share-based awards | ( | ( | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
BALANCE, October 29, 2022 | $ | $ | $ | ( | $ | $ | ( | $ |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Inventory write-offs | |||||||||||
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 operating activities | |||||||||||
Cash Flows from Investing Activities: | |||||||||||
Purchases of marketable securities | ( | ( | |||||||||
Proceeds from sale of marketable securities | |||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
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) increase 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 for income taxes, net | $ | ( | $ | ( |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Chico’s | $ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
WHBM | |||||||||||||||||||||||||||||||||||||||||||||||
Soma | |||||||||||||||||||||||||||||||||||||||||||||||
Total Net Sales | $ | % | $ | % | $ | % | $ | % |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||
Beginning gift card liability | $ | $ | $ | $ | |||||||||||||||||||
Issuances | |||||||||||||||||||||||
Redemptions | ( | ( | ( | ( | |||||||||||||||||||
Breakage adjustment | ( | ( | ( | ||||||||||||||||||||
Ending gift card liability | $ | $ | $ | $ | |||||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||
Beginning balance rewards deferred revenue | $ | $ | $ | $ | |||||||||||||||||||
Net reduction in revenue | |||||||||||||||||||||||
Ending balance rewards deferred revenue | $ | $ | $ | $ |
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||
Operating lease cost (1) | $ | $ | $ | $ |
October 28, 2023 | January 28, 2023 | October 29, 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) | % | % | % |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 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 | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 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 October 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 | |||||||||||||||||||||||
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 | |||||||||||||||||||||||
Total recurring fair value measurements | $ | $ | $ | $ | |||||||||||||||||||
Fair Value Measurements at the End of the Reporting Date Using | |||||||||||||||||||||||
Balance as of October 29, 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: | |||||||||||||||||||||||
U.S. government agencies | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Noncurrent Assets | |||||||||||||||||||||||
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 | Thirty-Nine Weeks Ended | ||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | October 28, 2023 | October 29, 2022 | ||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||
Net sales | $ | 505 | $ | 518 | $ | 1,585 | $ | 1,618 | |||||||||||||||
Income from operations (1) | 11 | 32 | 110 | 135 | |||||||||||||||||||
Net income (2) | 5 | 25 | 104 | 102 | |||||||||||||||||||
Net income per common and common equivalent share – diluted | $ | 0.04 | $ | 0.20 | $ | 0.85 | $ | 0.82 |
Thirteen Weeks Ended | |||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Chico’s | $ | 252 | 49.9 | % | $ | 255 | 49.3 | % | |||||||||||||||
WHBM | 148 | 29.2 | 157 | 30.4 | |||||||||||||||||||
Soma | 105 | 20.9 | 106 | 20.3 | |||||||||||||||||||
Total Net Sales | $ | 505 | 100.0 | % | $ | 518 | 100.0 | % |
Thirteen Weeks Ended | ||||||||||||||
October 28, 2023 | October 29, 2022 | |||||||||||||
Compared to Fiscal 2022 | Compared to Fiscal 2021 | |||||||||||||
Chico’s | 0.0 | % | 28.8 | % | ||||||||||
WHBM | (6.7) | 17.0 | ||||||||||||
Soma | (3.1) | (6.1) | ||||||||||||
Total Company | (2.7) | 16.5 |
Thirteen Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Cost of goods sold | $ | 309 | $ | 311 | |||||||
Gross profit | 196 | 207 | |||||||||
Gross margin percentage | 38.9 | % | 40.0 | % |
Thirteen Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Selling, general, and administrative expenses | $ | 179 | $ | 176 | |||||||
Percentage of total net sales | 35.4 | % | 33.9 | % |
Thirteen Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Merger-related costs | $ | 7 | $ | — | |||||||
Percentage of total net sales | 1.4 | % | — | % |
Thirty-Nine Weeks Ended | |||||||||||||||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Chico’s | $ | 800 | 50.5 | % | $ | 802 | 49.5 | % | |||||||||||||||
WHBM | 451 | 28.4 | 485 | 30.0 | |||||||||||||||||||
Soma | 334 | 21.1 | 331 | 20.5 | |||||||||||||||||||
Total net sales | $ | 1,585 | 100.0 | % | $ | 1,618 | 100.0 | % |
Thirty-Nine Weeks Ended | ||||||||||||||
October 28, 2023 | October 29, 2022 | |||||||||||||
Compared to Fiscal 2022 | Compared to Fiscal 2021 | |||||||||||||
Chico's | 0.7 | % | 36.0 | % | ||||||||||
WHBM | (6.8) | 35.6 | ||||||||||||
Soma | (2.0) | (5.8) | ||||||||||||
Total Company | (2.1) | % | 24.7 | % |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Cost of goods sold | $ | 947 | $ | 962 | |||||||
Gross profit | 638 | 656 | |||||||||
Gross margin percentage | 40.3 | % | 40.5 | % |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Selling, general, and administrative expenses | $ | 521 | $ | 520 | |||||||
Percentage of total net sales | 32.8 | % | 32.1 | % |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(dollars in millions) | |||||||||||
Merger-related costs | $ | 7 | $ | — | |||||||
Percentage of total net sales | 0.5 | % | — | % |
Thirty-Nine Weeks Ended | |||||||||||
October 28, 2023 | October 29, 2022 | ||||||||||
(in millions) (1) | |||||||||||
Net cash provided by operating activities | $ | 36 | $ | 84 | |||||||
Net cash used in investing activities | (35) | (42) | |||||||||
Net cash used in financing activities | (52) | (39) | |||||||||
Net (decrease) increase in cash and cash equivalents | $ | (51) | $ | 3 |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
Risk | Description | ||||
1. The pendency of the Merger could have a material adverse effect on our business, consolidated financial condition or results of operations, or the market price of our common stock. | On September 27, 2023, the Company entered into the Merger Agreement. During the period between the date of the signing of the Merger Agreement and the closing of the Merger, our business has been and is exposed to certain inherent risks due to the effect of the announcement and the pendency of the Merger, including the following: • difficulties maintaining relationships with customers and business partners, who may defer decisions about working with us, move to our competitors, or seek to delay or change existing business relationships with us; • uncertainties caused by negative sentiment in the marketplace with respect to the Merger, which could adversely impact investor confidence in our business; • our inability to retain and hire key personnel during the pendency of the Merger, as our personnel may experience uncertainty about their future roles following the Merger; • diversion of our management’s time and attention, as well as distraction of our key personnel, from the Company’s ordinary course of business operations; • the occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement, including in circumstances requiring the Company to pay a termination fee; and • our inability to solicit other acquisition proposals, pursue alternative business opportunities, make strategic changes to our business, and other restrictions on our ability to conduct our business pursuant to the Merger Agreement. |
2. The Merger may not be completed within the expected timeframe, or at all, and any significant delay or the failure to complete the Merger could adversely affect our business, consolidated financial condition or results of operations, or the market price of our common stock. | There can be no assurance that the Merger will be completed within the intended timeframe, or at all. If the Merger is not completed within the intended timeframe or at all, or if the Merger is significantly delayed, we may be subject to a number of material risks, including the following: • to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed, the market price may be negatively impacted because of a failure to complete the Merger within the expected timeframe, or at all; • we could be subject to litigation related to any failure to complete the Merger; • we have incurred, and expect to continue incurring, significant costs, expenses, and fees for professional services and other Merger-related costs, for which we may receive little or no benefit if the Merger is not completed, and many of these fees and costs will be payable by us even if the Merger is not completed; and • a significant delay in completing the Merger or the failure to complete the Merger may result in negative publicity, which, in turn, could negatively affect our relationships with business partners and could impact investor and consumer confidence in our business. The occurrence of any of these events individually or in combination could materially adversely affect our business, consolidated financial condition or results of operations, or the market price of our common stock. | ||||
3. Shareholder litigation could prevent or delay the closing of the Merger or otherwise negatively impact our business, consolidated financial condition or results of operations, or the market price of our common stock. | We may incur additional costs in connection with the defense or settlement of any future shareholder litigation related to the pending Merger. Such litigation may adversely affect our ability to complete the Merger. We could incur significant costs in connection with any such litigation, including costs associated with the indemnification of obligations to our directors, which could adversely affect our business, consolidated financial condition or results of operations, or the market price of our common stock. |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
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 | |||||||||||||||||||||||||
July 30, 2023 - August 26, 2023 | 100,420 | $ | 5.37 | — | $ | 100,000 | |||||||||||||||||||||||
August 27, 2023 - September 30, 2023 | 5,845 | 5.04 | — | 100,000 | |||||||||||||||||||||||||
October 1, 2023 - October 28, 2023 | 14,697 | 7.49 | — | 100,000 | |||||||||||||||||||||||||
Total | 120,962 | 5.61 | — |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit 2.1 | |||||||||||
Exhibit 10.1 | |||||||||||
Exhibit 10.2 | |||||||||||
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 October 28, 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 October 28, 2023, formatted in Inline XBRL (included within Exhibit 101) |
CHICO'S FAS, INC. | ||||||||||||||||||||
Date: | November 30, 2023 | By: | /s/ Molly Langenstein | |||||||||||||||||
Molly Langenstein | ||||||||||||||||||||
Chief Executive Officer, President and Director | ||||||||||||||||||||
Date: | November 30, 2023 | By: | /s/ David M. Oliver | |||||||||||||||||
David M. Oliver | ||||||||||||||||||||
Executive Vice President – Chief Financial Officer and Chief Accounting Officer |
/s/ Molly Langenstein | ||||||||
Name: | Molly Langenstein | |||||||
Title: | Chief Executive Officer, President and Director |
/s/ David M. Oliver | ||||||||
Name: | David M. Oliver | |||||||
Title: | Executive Vice President – Chief Financial Officer and Chief Accounting Officer |
/s/ Molly Langenstein | ||
Molly Langenstein | ||
Chief Executive Officer, President and Director |
/s/ David M. Oliver | ||
David M. Oliver | ||
Executive Vice President – Chief Financial Officer and Chief Accounting Officer |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 5,040 | $ 24,619 | $ 104,270 | $ 101,512 |
Other comprehensive income: | ||||
Unrealized gains (losses) on marketable securities, net of taxes | 35 | (233) | 72 | (228) |
Comprehensive income | $ 5,075 | $ 24,386 | $ 104,342 | $ 101,284 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Oct. 28, 2023 |
Jan. 28, 2023 |
Oct. 29, 2022 |
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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) | 167,994,000 | 166,320,000 | 166,326,000 |
Common shares outstanding (in shares) | 123,447,000 | 125,023,000 | 125,029,000 |
Treasury shares at cost (in shares) | 44,547,000 | 41,297,000 | 41,297,000 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
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Oct. 28, 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 (“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,” “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 and thirty-nine weeks ended October 28, 2023 are not necessarily indicative of the results that may be expected for the entire year. Adoption of New Accounting Pronouncements In September 2022, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update (“ASU”) 2022-04, entitled “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 entered into a supplier financing agreement administered by a third-party platform in the fourth quarter of 2022. Payments to suppliers through this program began in the third quarter of fiscal 2023. Refer to Note 11 for additional information regarding the Company’s payment obligations to participating suppliers. Entry into Merger Agreement On September 27, 2023, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with Daphne Parent LLC, a Delaware limited liability company (“Parent”), and Daphne Merger Sub, Inc., a Florida corporation and wholly owned subsidiary of Parent (“Merger Sub” and together with Parent, “Buyer Parties”), providing for the merger of Merger Sub with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly owned subsidiary of Parent (“Merger”). Upon the consummation of the Merger, each share of the Company’s common stock outstanding as of immediately prior to the effective time of the Merger (other than shares of the Company’s common stock that are (i) held by the Company or any subsidiary of the Company, (ii) owned by the Buyer Parties, or (iii) owned by any direct or indirect wholly owned subsidiary of the Buyer Parties as of immediately prior to the effective time (“Owned Company Shares”)) will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $7.60 per share, without interest thereon. Each Owned Company Share will be cancelled and extinguished without any conversion thereof or consideration paid therefor. Consummation of the Merger is subject to certain conditions set forth in the Merger Agreement, including, but not limited to, the following: (i) the affirmative vote of the holders of a majority of all of the outstanding shares of the Company’s common stock to adopt the Merger Agreement; (ii) the absence of any law or order restraining, enjoining, or otherwise prohibiting the Merger; and (iii) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement, which is filed as Exhibit 2.1 to this Quarterly Report on Form 10-Q). The Go-Shop Period has ended, and the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired. In addition, the Company filed its Definitive Merger Proxy Statement on Schedule 14A with the Securities and Exchange Commission on November 29, 2023. The transaction is not subject to a financing condition. The Merger Agreement includes customary representations, warranties, and covenants of the parties, including termination provisions for both the Company and the Buyer Parties. Under the Merger Agreement, the Company may be required to pay the Buyer Parties a termination fee of up to $29,956,324 if the Merger Agreement is terminated under certain specified circumstances. The Merger Agreement also places certain restrictions on the conduct of the Company’s business prior to the completion of the Merger, which could delay or prevent the Company from undertaking business opportunities that may arise or any other action it would otherwise take with respect to the operations of the Company absent these restrictions. Parent and the Company expect to close the Merger by the end of the first calendar quarter of 2024.
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS |
9 Months Ended |
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Oct. 28, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS The Company currently has no material recent accounting pronouncements yet to be adopted.
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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 October 28, 2023, January 28, 2023, and October 29, 2022, contract liabilities primarily consisted of gift cards of $29.2 million, $42.6 million, and $31.9 million, respectively. For the thirteen and thirty-nine weeks ended October 28, 2023, the Company recognized $6.2 million and $25.3 million, respectively, of revenue that was previously included in the gift card contract liability as of January 28, 2023. For the thirteen and thirty-nine weeks ended October 29, 2022, the Company recognized $7.0 million and $27.0 million, respectively, 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 points-based program was specific to Soma®, during the second quarter of fiscal year 2022, Chico’s FAS extended its points-based rewards program to Chico’s® and White House Black Market® (“WHBM”). As of October 28, 2023, January 28, 2023, and October 29, 2022, the rewards deferred revenue balance was $9.9 million, $7.4 million, and $4.5 million, respectively.
Performance Obligation For the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022, revenue recognized from performance obligations related to prior periods was 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 | LEASES The 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) For the thirteen and thirty-nine weeks ended October 28, 2023, includes $14.3 million and $41.1 million, respectively, in variable lease costs. For the thirteen and thirty-nine weeks ended October 29, 2022, includes $9.7 million and $28.5 million, respectively, in variable lease costs. 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 October 28, 2023 were as follows:
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SHARE-BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, share-based compensation expense was $9.1 million and $10.3 million, respectively. As of October 28, 2023, approximately 10.4 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 (i) 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 (ii) 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 thirty-nine weeks ended October 28, 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 (i) 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 (ii) 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 thirty-nine weeks ended October 28, 2023 was as follows:
Performance-based Restricted Stock Units During the thirty-nine weeks ended October 28, 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 thirty-nine weeks ended October 28, 2023 was as follows:
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INCOME TAXES |
9 Months Ended |
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Oct. 28, 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 thirteen weeks ended October 28, 2023 and October 29, 2022, the Company’s effective tax rate was 50.3% and 19.3%, respectively. The effective tax rate of 50.3% for the thirteen weeks ended October 28, 2023 primarily reflects the impact of certain incurred and anticipated nondeductible Merger-related costs, and the Company’s projected annual pre-tax income, partially offset by a fiscal 2022 provision-to-return benefit related to federal tax credits. The 19.3% effective tax rate for the thirteen weeks ended October 29, 2022 primarily reflects the impact of a fiscal 2021 provision-to-return benefit due to the reversal of a valuation allowance related to temporary differences. For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, the Company’s effective tax rate was 4.3% and 23.2%, respectively. The effective tax rate of 4.3% for the thirty-nine weeks ended October 28, 2023 primarily reflects the non-cash benefit for the partial reversal of the valuation allowance on deferred tax assets, favorable share-based compensation benefit, and a fiscal 2022 provision-to-return benefit related to federal credits, offset by the impact of certain incurred and anticipated nondeductible Merger-related costs and the Company’s projected annual pre-tax income. The 23.2% effective tax rate for the thirty-nine weeks ended October 29, 2022 primarily reflects a provision to return benefit due to the reversal of a valuation allowance related to 2021 temporary differences and favorable share-based compensation benefit. As of October 28, 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, or CARES Act.
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INCOME PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 October 28, 2023 and October 29, 2022, 0.0 million and 0.1 million potential shares of common stock, respectively, were excluded from the income per diluted common share calculation relating to non-participating securities, due to the antidilutive effect of including these shares. For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, 0.1 million and 0.1 million potential shares of common stock, respectively, were excluded from the income per diluted 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 October 28, 2023, consisted of U.S. government agencies, corporate bonds, and commercial paper, with $22.2 million of securities with maturity dates within one year or less, and $2.5 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 measurement 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 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 October 28, 2023, January 28, 2023, and October 29, 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 |
9 Months Ended |
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Oct. 28, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT On February 2, 2022, the Company and certain material domestic subsidiaries entered into Amendment No. 2 (“Amendment”) to its credit agreement (as amended, “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 Lending 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 October 28, 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 October 28, 2023, the available additional borrowing capacity under the Credit Agreement was approximately $265.1 million, inclusive of the current loan cap of $30.0 million. As of October 28, 2023, deferred financing costs of $2.7 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 |
9 Months Ended |
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Oct. 28, 2023 | |
Equity [Abstract] | |
SHARE REPURCHASES | SHARE REPURCHASESDuring the thirty-nine weeks ended October 28, 2023, under our $300.0 million share repurchase program announced in November 2015 (“Prior Share Repurchase Program”), we repurchased 3.25 million shares at a total cost of approximately $19.8 million, at an average price of $6.09 per share. In June 2023, the Company authorized a new share repurchase program (“New Share Repurchase Program”) of up to $100.0 million of the Company’s common stock and cancelled the remaining $35.4 million available under the Prior Share Repurchase Program. As of October 28, 2023, the Company had $100.0 million remaining for future repurchases under the New Share Repurchase Program. However, we have no continuing obligation to repurchase shares under this authorization, and the timing, actual number, and purchase price of any shares purchased under the New Share Repurchase Program will depend on a variety of factors, including, but not limited to, the pending Merger, the market price of the Company’s common stock, general business and market conditions, other investment opportunities, and applicable legal and regulatory requirements |
SUPPLIER FINANCE PROGRAM |
9 Months Ended |
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Oct. 28, 2023 | |
Payables and Accruals [Abstract] | |
SUPPLIER FINANCE PROGRAM | SUPPLIER FINANCE PROGRAM In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which enhances the transparency about the use of supplier finance programs for investors and other allocators of capital. The Company entered into a supplier financing agreement administered by a third-party platform in the fourth quarter of 2022. Payments to suppliers through this program began in the third quarter of fiscal 2023. Inclusion in the supplier financing program is by sole discretion of the Company, offering participating suppliers early payment of invoices through a third-party financial institution. The Company negotiates payment terms with each supplier separately, and inclusion in the financing program does not impact amounts due. One supplier is currently participating in the program with 90-day payment terms. The Company may on occasion submit debit memos to the third-party financial institution, and the financial institution agrees to work with the Company in applying these credits to future payments to suppliers. During the thirteen weeks ended October 28, 2023, no payments were made for invoices submitted through the supplier financing program. The outstanding payment obligation to the financial institution under this program was $2.2 million as of October 28, 2023, which is 1.7% of total trade payables obligations to suppliers.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Oct. 28, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are not currently a party to any material legal proceedings other than claims and lawsuits arising in the normal course of our business. All such matters are subject to uncertainties, and outcomes may not be predictable. Consequently, as of October 28, 2023, the ultimate aggregate amounts of monetary liability or financial impact with respect to such matters are not estimable. However, while such matters could affect our consolidated operating results when resolved in future periods, management believes that, upon final disposition, any monetary liability or financial impact to us would not be material to our annual consolidated financial statements.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
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Pay vs Performance Disclosure | ||||
Net income | $ 5,040 | $ 24,619 | $ 104,270 | $ 101,512 |
Insider Trading Arrangements |
3 Months Ended |
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Oct. 28, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Oct. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 (“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 In September 2022, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update (“ASU”) 2022-04, entitled “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 entered into a supplier financing agreement administered by a third-party platform in the fourth quarter of 2022. Payments to suppliers through this program began in the third quarter of fiscal 2023. Refer to Note 11 for additional information regarding the Company’s payment obligations to participating suppliers.
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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 October 28, 2023, consisted of U.S. government agencies, corporate bonds, and commercial paper, with $22.2 million of securities with maturity dates within one year or less, and $2.5 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 measurement 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 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] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of 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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Schedule of Contract Liabilities |
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LEASES (Tables) |
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Oct. 28, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Lease Expense | Operating lease expense was as follows:
(1) For the thirteen and thirty-nine weeks ended October 28, 2023, includes $14.3 million and $41.1 million, respectively, in variable lease costs. For the thirteen and thirty-nine weeks ended October 29, 2022, includes $9.7 million and $28.5 million, respectively, in variable lease costs. Supplemental cash flow information related to operating leases was as follows:
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Schedule of Supplemental Balance Sheet Information | 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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Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities as of October 28, 2023 were as follows:
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SHARE-BASED COMPENSATION (Tables) |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Activity | Restricted stock award activity for the thirty-nine weeks ended October 28, 2023 was as follows:
Restricted stock unit activity for the thirty-nine weeks ended October 28, 2023 was as follows:
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Schedule of Performance-Based Restricted Stock Unit Activity | PSU activity for the thirty-nine weeks ended October 28, 2023 was as follows:
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INCOME PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of 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:
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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Merger Agreement with Daphne Parent LLC |
Sep. 27, 2023
USD ($)
$ / shares
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Business Acquisition [Line Items] | |
Business combination, common stock, dividends (in dollars per share) | $ / shares | $ 7.60 |
Merger agreement, termination fee | $ | $ 29,956,324 |
REVENUE RECOGNITION - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
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Jan. 28, 2023 |
Jul. 30, 2022 |
Jan. 29, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||||||
Total Net Sales | $ 505,126 | $ 518,332 | $ 1,584,995 | $ 1,617,967 | ||||
Total net sales, as a percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Contract liabilities | $ 29,171 | $ 31,892 | $ 29,171 | $ 31,892 | $ 30,905 | $ 42,649 | $ 33,707 | $ 43,536 |
Contract liability revenue recognized | 6,200 | 7,000 | 25,300 | 27,000 | ||||
Chico’s | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total Net Sales | $ 252,221 | $ 255,341 | $ 800,088 | $ 801,584 | ||||
Total net sales, as a percentage | 49.90% | 49.30% | 50.50% | 49.50% | ||||
WHBM | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total Net Sales | $ 147,498 | $ 157,451 | $ 451,016 | $ 485,061 | ||||
Total net sales, as a percentage | 29.20% | 30.40% | 28.40% | 30.00% | ||||
Soma | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total Net Sales | $ 105,407 | $ 105,540 | $ 333,891 | $ 331,322 | ||||
Total net sales, as a percentage | 20.90% | 20.30% | 21.10% | 20.50% |
REVENUE RECOGNITION - Schedule of Gift Card Contract Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Contract With Customer Liability [Roll Forward] | ||||
Beginning balance rewards deferred revenue | $ 30,905 | $ 33,707 | $ 42,649 | $ 43,536 |
Issuances | 7,602 | 7,878 | 26,585 | 28,218 |
Redemptions | (9,174) | (9,869) | (35,893) | (37,739) |
Breakage adjustment | (162) | 176 | (4,170) | (2,123) |
Ending balance rewards deferred revenue | $ 29,171 | $ 31,892 | $ 29,171 | $ 31,892 |
REVENUE RECOGNITION - Schedule of Deferred Revenue Contract Liability (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Contract With Customer Liability [Roll Forward] | ||||
Beginning balance rewards deferred revenue | $ 30,905 | $ 33,707 | $ 42,649 | $ 43,536 |
Ending balance rewards deferred revenue | 29,171 | 31,892 | 29,171 | 31,892 |
Customer Rewards Program | ||||
Contract With Customer Liability [Roll Forward] | ||||
Beginning balance rewards deferred revenue | 9,233 | 3,236 | 7,441 | 626 |
Net reduction in revenue | 653 | 1,288 | 2,445 | 3,898 |
Ending balance rewards deferred revenue | $ 9,886 | $ 4,524 | $ 9,886 | $ 4,524 |
LEASES - Schedule of Operating Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 58,132 | $ 55,608 | $ 169,916 | $ 163,271 |
Variable lease cost | $ 14,300 | $ 9,700 | $ 41,100 | $ 28,500 |
LEASES - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Oct. 28, 2023 |
Jan. 28, 2023 |
Oct. 29, 2022 |
---|---|---|---|
Leases [Abstract] | |||
Right of use assets | $ 466,888 | $ 435,321 | $ 432,018 |
Current lease liabilities | 150,053 | 153,202 | 157,687 |
Long-term lease liabilities | 373,823 | 349,409 | 346,560 |
Total operating lease liabilities | $ 523,876 | $ 502,611 | $ 504,247 |
Weighted Average Remaining Lease Term (years) | 4 years 4 months 24 days | 4 years 2 months 12 days | 4 years 1 month 6 days |
Weighted Average Discount Rate | 5.90% | 5.30% | 5.00% |
LEASES - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows | $ 145,729 | $ 155,561 |
Right of use assets obtained in exchange for lease obligations, non-cash | $ 145,342 | $ 88,484 |
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Oct. 28, 2023 |
Jan. 28, 2023 |
Oct. 29, 2022 |
---|---|---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
February 3, 2024 | $ 48,986 | ||
February 1, 2025 | 171,076 | ||
January 31, 2026 | 129,459 | ||
January 30, 2027 | 95,434 | ||
January 29, 2028 | 66,278 | ||
Thereafter | 92,906 | ||
Total future minimum lease payments | 604,139 | ||
Less imputed interest | (80,263) | ||
Total | $ 523,876 | $ 502,611 | $ 504,247 |
INCOME TAXES (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 50.30% | 19.30% | 4.30% | 23.20% |
CARES Act, COVID-19 | ||||
Income Tax Examination [Line Items] | ||||
Income tax receivable | $ 7.9 | $ 7.9 |
INCOME PER SHARE - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Numerator: | ||||
Net income | $ 5,040 | $ 24,619 | $ 104,270 | $ 101,512 |
Net income allocated to participating securities | (2) | (47) | (113) | (370) |
Net income available to common shareholders, basic | 5,038 | 24,572 | 104,157 | 101,142 |
Net income available to common shareholders, diluted | $ 5,038 | $ 24,572 | $ 104,157 | $ 101,142 |
Denominator: | ||||
Weighted average common shares outstanding – basic (in shares) | 119,457 | 120,333 | 119,424 | 119,776 |
Dilutive effect of non-participating securities (in shares) | 3,278 | 4,554 | 3,076 | 4,239 |
Weighted average common and common equivalent shares outstanding – diluted (in shares) | 122,735 | 124,887 | 122,500 | 124,016 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.04 | $ 0.20 | $ 0.87 | $ 0.84 |
Diluted (in dollars per share) | $ 0.04 | $ 0.20 | $ 0.85 | $ 0.82 |
INCOME PER SHARE - Narrative (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 28, 2023 |
Oct. 29, 2022 |
Oct. 28, 2023 |
Oct. 29, 2022 |
|
Earnings Per Share [Abstract] | ||||
Number of antidilutive securities (in shares) | 0.0 | 0.1 | 0.1 | 0.1 |
DEBT (Details) - Revolving Credit Facility - USD ($) |
Feb. 02, 2022 |
Oct. 28, 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 | 265,100,000 | |
Excess availability of borrowing | 30,000,000 | |
Deferred financing costs | $ 2,700,000 | |
Line of Credit | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 1.60% | |
Line of Credit | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 1.35% | |
Line of Credit | SOFR | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 1.85% | |
FILO | ||
Debt Instrument [Line Items] | ||
Borrowing capacity | $ 15,000,000 | |
Basis points | 0.30% | |
FILO | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 3.85% | |
FILO | SOFR | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 3.60% | |
FILO | SOFR | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate (in percent) | 3.35% |
SHARE REPURCHASES (Details) - USD ($) $ / shares in Units, shares in Thousands |
9 Months Ended | ||
---|---|---|---|
Oct. 28, 2023 |
Jun. 30, 2023 |
Nov. 30, 2015 |
|
Prior Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares authorized to be repurchased | $ 300,000,000 | ||
Shares repurchased (in shares) | 3,250 | ||
Cost of shares repurchased | $ 19,800,000 | ||
Weighted average cost per share of shares repurchased (in dollars per share) | $ 6.09 | ||
Share repurchase program, amount remaining for future repurchases | $ 35,400,000 | ||
New Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Shares authorized to be repurchased | $ 100,000,000 | ||
Share repurchase program, amount remaining for future repurchases | $ 100,000,000 |
SUPPLIER FINANCE PROGRAM (Details) $ in Millions |
Oct. 28, 2023
USD ($)
supplier
|
---|---|
Supplier Finance Program [Line Items] | |
Supplier finance program, number of suppliers participated | supplier | 1 |
Supplier finance program, payment timing, period | 90 days |
Outstanding payment obligation | $ | $ 2.2 |
Supplier Concentration Risk | Trade Payables | Third Party Financial Institution | |
Supplier Finance Program [Line Items] | |
Concentration risk, percentage (in percent) | 1.70% |
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