8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report: (Date of earliest event reported): March 3, 2009

Chico’s FAS, Inc.

(Exact Name of Registrant as Specified in its Charter)

Florida
(State or Other Jurisdiction of Incorporation)

0-21258	59-2389435
(Commission File Number)	(IRS Employer Identification No.)

11215 Metro Parkway, Fort Myers, Florida	33966
(Address of Principal Executive Offices)	(Zip code)

(239) 277-6200
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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

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

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

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

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
EX-99.1

Item 2.02. Results of Operations and Financial Condition

     On March 3, 2009, Chico’s FAS, Inc. issued a press release announcing its fourth quarter and fiscal 2008 earnings. A copy of the release issued on March 3, 2009 is attached to this Report as Exhibit 99.1 and is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:

Exhibit 99.1 Chico’s FAS, Inc. Press Release dated March 3, 2009

2

SIGNATURES

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

	CHICO’S FAS, INC.
Date: March 3, 2009	By:	/s/ Kent A. Kleeberger
		Kent A. Kleeberger, Executive Vice President —
		Chief Financial Officer and Treasurer

3

INDEX TO EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release of Chico’s FAS, Inc. dated March 3, 2009

4

EX-99.1

Exhibit 99.1

Chico’s FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239) 277-6200

For Immediate Release

Executive Contact:
Robert C. Atkinson
Vice President-Investor Relations
Chico’s FAS, Inc.
(239) 274-4199

Chico’s FAS, Inc. Announces Fourth Quarter 2008 and
Annual Net Sales and Earnings

• Fourth quarter 2008 net sales totaled $373.4 million vs. $409.3 million in 2007

• Fourth quarter 2008 net loss was $40.5 million, or $0.23 per diluted share, which includes $9.1 million of store impairment and $6.6 million severance charges after-tax vs. net loss of $20.5 million, or $0.12 per diluted share in 2007

• Year-end inventories decreased 15% per selling square foot

• Year-end cash and marketable securities were $268.7 million

     Fort Myers, FL - March 3, 2009 - Chico’s FAS, Inc. (NYSE: CHS) today announced its financial results for the fiscal 2008 fourth quarter and fiscal year ended January 31, 2009.

Fourth Quarter and Fiscal Year 2008 Financial Results

     For the fourth quarter ended January 31, 2009, the Company had a net loss of $40.5 million, or $0.23 per diluted share, compared to a net loss of $20.5 million, or $0.12 per diluted share for the fourth quarter ended February 2, 2008.

     The fourth quarter 2008 results include two significant after-tax charges totaling $0.09 per diluted share:

• Non-cash impairment charges, net of tax benefit, totaling $9.1 million, or $0.05 per share, related to the write-off of fixed assets at certain underperforming stores; and

• After-tax severance and workforce reduction costs totaling $6.6 million, or $0.04 per share, related to the previously disclosed cost reduction initiatives implemented by the Company and obligations under the former CEO’s separation agreement.

     Excluding these items, the Company had a fourth quarter net loss of $24.8 million, or $0.14 per diluted share compared to a net loss of $20.5 million, or $0.12 per diluted share for the like period last year.

     For the fiscal year ended January 31, 2009, the Company had a net loss of $19.1 million, or $0.11 per diluted share compared to net income of $88.9 million, or $0.50 per diluted share for fiscal year 2007. The full fiscal year 2008 results included the aforementioned charges listed above. Excluding these items, the Company had a net loss for fiscal 2008 of $4.9 million, or $0.03 per diluted share versus net income of $88.9 million, or $0.50 per diluted share for fiscal 2007.

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Sales

     As previously reported, comparable store sales decreased 13.0% for the thirteen-week period ended January 31, 2009, compared to the comparable thirteen-week period ended February 2, 2008, with the Chico’s brand same store sales having decreased approximately 17% and the White House | Black Market (WH|BM) brand same store sales having decreased by approximately 5%.

     As previously reported, comparable store sales decreased 15.1% for the fifty-two week period ended January 31, 2009, compared to the comparable fifty-two week period ended February 2, 2008, with the Chico’s brand same store sales having decreased approximately 19% and the WH|BM brand same store sales having decreased by approximately 8%.

     Net sales for the direct to consumer channel increased by 8.8% from $20.5 million in last year’s fourth quarter to $22.3 million in this year’s fourth quarter. This increase is attributable to higher sales across all three brands. The Company believes its ability to achieve such an increase in these challenging economic times is attributable to several factors: the continued growth in customer acceptance of the offerings at the Soma and WH|BM brands, increased traffic in all of the direct to consumer channels and the Company’s implementation of planned improvements in its website and call center infrastructure. The Company intends to continue making improvements to its direct to consumer infrastructure and merchandising approach in an effort to increase future sales through this channel.

Gross Margin

     Gross margin for the fourth quarter 2008 decreased 14.9% to $166.0 million from $195.1 million in the prior year’s fourth quarter. Gross margin as a percentage of sales for the fourth quarter decreased 330 basis points to 44.4%, from 47.7% in last year’s fourth quarter. WH|BM brand merchandise margin decreased by approximately 590 basis points due primarily to lower initial markups as well as higher markdowns. Chico’s brand merchandise margin in the fourth quarter decreased approximately 140 basis points compared to the prior year’s fourth quarter primarily due to lower initial markups offset, in part, by an improved markdown rate. The gross margin percentage at the Chico’s brand was also negatively impacted by continued investment in that brand’s product development and merchandising functions, coupled with the deleveraging of these costs associated with the negative same store sales.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses (“SG&A”) for the fourth quarter decreased slightly to $228.4 million from $229.3 million in last year’s fourth quarter. As a percentage of sales, SG&A in the fourth quarter increased by approximately 500 basis points compared to the prior period primarily due to the recognition of approximately $23.7 million in impairment and restructuring charges. Excluding the impairment and restructuring charges, SG&A would have been $204.7 million, which would have represented a decrease of 10.7% from last year’s fourth quarter SG&A and an improvement of 130 basis points over last year’s rate as a percentage of sales.

     Store operating expenses for the fiscal 2008 fourth quarter decreased by $5.7 million but increased as a percentage of sales by approximately 230 basis points compared to the prior period primarily due to the deleverage associated with the Company’s negative same store sales and, to a lesser extent, by increased personnel as a percentage of sales, as selling payroll did not flex in direct proportion to the decrease in comparable store sales. These increases were offset, in part, by a decrease in supplies and shipping costs across all brands.

     Marketing costs for the fiscal 2008 fourth quarter decreased by $12.4 million or approximately 260 basis points primarily due to the on-going cost reduction initiatives and increased efficiencies implemented by the Company.

     Shared services expenses (including headquarters and other non-brand specific expenses) for the fiscal 2008 fourth quarter decreased by $6.5 million or approximately 100 basis points as a percentage of sales mainly as a result of on-going cost reduction initiatives implemented by the Company.

     Inventories

     The Company’s consolidated inventory per selling square foot at the end of fiscal 2008 was $51, reflecting a decrease of approximately 15% from $60 at the end of fiscal 2007 and is the lowest year-end inventory per square foot total experienced by the Company in the last 10 years. End of-year inventories for the Chico’s brand decreased by 17.0% per square foot from fiscal 2007 to fiscal 2008 and end-of-year inventories for the WH|BM brand decreased by 4.4% per square foot from fiscal 2007 to fiscal 2008.

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     Cash and Marketable Securities

     Cash and marketable securities at the end of fiscal 2008 totaled $268.7 million, a slight decrease from the balance at the end of fiscal 2007, but was approximately 5%, or $12.4 million, higher than the balance at the end of the third quarter of fiscal 2008.

     Stores

     During the fiscal 2008 fourth quarter, the Company opened 6 new stores and closed 13 stores. Also, during this fourth quarter, the Company expanded/relocated 2 stores. In fiscal 2008, the Company opened 62 new stores, closed 24 stores and expanded/relocated 32 stores.

     The Company is a specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. The Company operates 1,074 women’s specialty stores, including stores in 49 states, the District of Columbia, the U.S. Virgin Islands and Puerto Rico operating under the Chico’s, White House | Black Market, and Soma Intimates names. The Company has 618 Chico’s front-line stores, 41 Chico’s outlet stores, 327 White House | Black Market front-line stores, 17 White House | Black Market outlet stores, 70 Soma Intimates front-line stores and 1 Soma Intimates outlet store. The company also conducts e-commerce on its brand websites, www.chicos.com, www.whitehouseblackmarket.com and www.soma.com.

Certain statements contained herein, including without limitation, statements addressing the beliefs, plans, objectives, estimates or expectations of the Company or future results or events constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known or unknown risks, including, but not limited to, general economic and business conditions, and conditions in the specialty retail industry. There can be no assurance that the actual future results, performance, or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the Company’s latest annual report on Form 10-K, its filings on Form 10-Q, management’s discussion and analysis in the Company’s latest annual report to stockholders, the Company’s filings on Form 8-K, and other federal securities law filings for a description of other important factors that may affect the Company’s business, results of operations and financial condition. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized.

For more detailed information on Chico’s FAS, Inc., please go to our corporate website,
www.chicosfas.com.

(Financial Tables Follow)

Page 3 of 7

Chico’s FAS, Inc.
Consolidated Balance Sheets
(in thousands)

	January 31,			February 2,
	2009			2008
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	26,549		$	13,801
Marketable securities, at market		242,153			260,469
Receivables		33,993			11,924
Income tax receivable		11,706			23,973
Inventories		132,413			144,261
Prepaid expenses		21,702			18,999
Deferred taxes		17,859			13,306
Total Current Assets		486,375			486,733
Property and Equipment:
Land and land improvements		18,627			17,867
Building and building improvements		74,998			62,877
Equipment, furniture and fixtures		376,218			347,937
Leasehold improvements		418,691			396,650
Total Property and Equipment		888,534			825,331
Less accumulated depreciation and amortization		(327,989	)		(257,378	)
Property and Equipment, Net		560,545			567,953
Other Assets:
Goodwill		96,774			96,774
Other intangible assets		38,930			38,930
Deferred taxes		38,458			22,503
Other assets, net		5,101			37,233
Total Other Assets		179,263			195,440
	$	1,226,183		$	1,250,126
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	56,542		$	79,030
Accrued liabilities		88,446			100,726
Current portion of deferred liabilities		1,748			1,437
Total Current Liabilities		146,736			181,193
Noncurrent Liabilities:
Deferred liabilities		177,251			156,417
Total Noncurrent Liabilities		177,251			156,417
Stockholders’ Equity:
Common stock		1,771			1,762
Additional paid-in capital		258,312			249,639
Retained earnings		641,978			661,115
Other accumulated comprehensive income		135			—
Total Stockholders’ Equity		902,196			912,516
	$	1,226,183		$	1,250,126

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Chico’s FAS, Inc.
Consolidated Statements of Income
(in thousands, except per share amounts)

	Fifty-Two Weeks Ended											Thirteen Weeks Ended
	(unaudited)											(unaudited)						(unaudited)
	January 31, 2009						February 2, 2008					January 31, 2009						February 2, 2008
	Amount			% of Sales			Amount			% of Sales		Amount			% of Sales			Amount			% of Sales
Net sales by Chico’s/Soma stores	$	1,074,939			67.9		$	1,223,217			71.4	$	242,887			65.0		$	280,817			68.6
Net sales by White House|Black Market stores		436,875			27.6			418,901			24.4		108,179			29.0			107,973			26.4
Net sales by direct to consumer		70,591			4.5			72,093			4.2		22,313			6.0			20,507			5.0
Other net sales		—			—			115			0.0		—			—			—			—
Net sales		1,582,405			100.0			1,714,326			100.0		373,379			100.0			409,297			100.0
Cost of goods sold		762,913			48.2			745,265			43.5		207,423			55.6			214,193			52.3
Gross margin		819,492			51.8			969,061			56.5		165,956			44.4			195,104			47.7
Selling, general and administrative expenses:
Store operating expenses		645,352			40.8			633,288			36.9		159,916			42.8			165,628			40.5
Marketing		80,326			5.1			95,717			5.6		18,653			5.0			31,069			7.6
Shared services		109,744			6.9			118,598			6.9		26,191			7.0			32,649			8.0
Impairment and restructuring charges		23,664			1.5			—			—		23,664			6.3			—			—
Total selling, general, and administrative expenses		859,086			54.3			847,603			49.4		228,424			61.1			229,346			56.1
Income (loss) from operations		(39,594	)		(2.5	)		121,458			7.1		(62,468	)		(16.7	)		(34,242	)		(8.4	)
Gain on sale of investment		—			—			6,833			0.4		—			—			—			—
Interest income, net		7,757			0.5			10,869			0.6		1,324			0.3			2,692			0.7
Income (loss) before taxes		(31,837	)		(2.0	)		139,160			8.1		(61,144	)		(16.4	)		(31,550	)		(7.7	)
Income tax provision (benefit)		(12,700	)		(0.8	)		48,012			2.8		(20,600	)		(5.5	)		(11,053	)		(2.7	)
Income (loss) from continuing operations		(19,137	)		(1.2	)		91,148			5.3		(40,544	)		(10.9	)		(20,497	)		(5.0	)
Loss on discontinued operations, net of tax		—			—			2,273			0.1		—			—			40			0.0
Net income (loss)	$	(19,137	)		(1.2	)	$	88,875			5.2	$	(40,544	)		(10.9	)	$	(20,537	)		(5.0	)
Per share data:
Income (loss) from continuing operations per common share—basic	$	(0.11	)				$	0.52				$	(0.23	)				$	(0.12	)
Loss on discontinued operations per common share—basic	$	—					$	( 0.01	)			$	—					$	(0.00	)
Net income (loss) per common share—basic	$	(0.11	)				$	0.51				$	(0.23	)				$	(0.12	)
Income (loss) from continuing operations per common share—diluted	$	(0.11	)				$	0.51				$	(0.23	)				$	(0.12	)
Loss on discontinued operations per common share—diluted	$	—					$	( 0.01	)			$	—					$	(0.00	)
Net income (loss) per common & common equivalent share—diluted	$	(0.11	)				$	0.50				$	(0.23	)				$	(0.12	)
Weighted average common shares outstanding—basic		175,861						175,574					175,938						175,604
Weighted average common & common equivalent shares outstanding—diluted		175,861						176,355					175,938						175,604

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Chico’s FAS, Inc.
Consolidated Cash Flow Statements
(in thousands)

	January 31,			February 2,
	2009			2008
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(19,137	)	$	88,875
Adjustments to reconcile net (loss) income to net cash provided by operating activities —
Depreciation and amortization, cost of goods sold		8,782			10,386
Depreciation and amortization, other		88,790			81,593
Deferred tax benefit		(20,507	)		(6,635	)
Stock-based compensation expense, cost of goods sold		2,769			4,909
Stock-based compensation expense, other		9,821			12,171
Excess tax benefit of stock-based compensation		(100	)		(209	)
Deferred rent expense, net		6,060			9,508
Gain on sale of investment		—			(6,833	)
Impairment of long-lived assets		13,691			—
Loss (gain) on disposal of property and equipment		761			(908	)
Decrease (increase) in assets —
Receivables, net		3,766			(18,770	)
Income tax receivable		12,267			—
Inventories		11,847			(32,388	)
Prepaid expenses and other		4,224			(3,958	)
(Decrease) increase in liabilities —
Accounts payable		(22,488	)		24,119
Accrued and other deferred liabilities		(1,100	)		46,787
Total adjustments		118,583			119,772
Net cash provided by operating activities		99,446			208,647
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities		(569,358	)		(1,212,894	)
Proceeds from sale of marketable securities		587,809			1,190,761
Purchase of Minnesota franchise rights and stores		—			(32,896	)
Acquisition of other franchise stores		—			(6,361	)
Proceeds from sale of land		—			13,426
Proceeds from sale of investment		—			15,090
Purchases of property and equipment		(104,615	)		(202,223	)
Net cash used in investing activities		(86,164	)		(235,097	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		306			3,533
Excess tax benefit of stock-based compensation		100			209
Cash paid for deferred financing costs		(629	)		—
Repurchase of common stock		(311	)		(694	)
Net cash (used in) provided by financing activities		(534	)		3,048
Net increase (decrease) in cash and cash equivalents		12,748			(23,402	)
CASH AND CASH EQUIVALENTS, Beginning of period		13,801			37,203
CASH AND CASH EQUIVALENTS, End of period	$	26,549		$	13,801

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SEC Regulation G — The Company reports its consolidated financial results in accordance with generally accepted accounting principles (GAAP). However, to supplement these consolidated financial results, management believes that certain non-GAAP operating results, which exclude impairment and certain other non-recurring charges, may provide a more meaningful measure on which to compare the Company’s results of operations between periods. The Company believes these non-GAAP results provide useful information to both management and investors by excluding certain expenses that impact the comparability of the results. A reconciliation of fourth quarter and fiscal 2008 year end earnings per diluted share on a GAAP basis to earnings per share on a non-GAAP basis are presented in the table below:

Chico’s FAS, Inc.
Non-GAAP to GAAP Reconciliation
Diluted Earnings Per Share (EPS)

	52 weeks ended			13 weeks ended
	January 31, 2009			January 31, 2009
Diluted EPS on a GAAP basis (as reported)	$	(0.11	)	$	(0.23	)
Add: Impact of impairment of long-lived assets		0.05			0.05
Add: Impact of severance costs		0.03			0.04
Non-GAAP Diluted EPS	$	(0.03	)	$	(0.14	)

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