FORT MYERS, Fla., Jan. 11, 2019 /PRNewswire/ --
- Launches Retail Fleet Optimization Plan
- Initiates Expanded Review of Operations
- Updates Fourth Quarter Outlook
- Announces Participation in the 2019 ICR
Conference
Chico's FAS, Inc. (NYSE: CHS) (the "Company") today announced
strategic initiatives to build on the Company's omnichannel
platform and ensure that Chico's FAS has the agility, customer
service and speed needed for long-term success in a competitive
retail environment. These initiatives include a retail fleet
optimization plan and an expanded review of the Company's
operations.
Shelley Broader, the Company's
CEO and President, said, "Our focus is on implementing those
initiatives that drive the greatest levels of growth and
profitability of our business. This includes continued improvement
in each of our differentiated brands, increased flexibility and
efficiency across our organization, and fully leveraging the
capabilities of our robust omnichannel platform to meet the
ever-evolving needs of our customers and to enhance shareholder
value."
Retail Fleet Optimization Plan
The Company has made significant progress in developing an
integrated omnichannel platform with advanced capabilities to
modernize, digitize and personalize the customer experience.
Important investments in technology, including a shared inventory
system, endless aisle, Client Book (now called "Style Connect™,"
which enables store associates to personalize the customer
experience) and BOPIS (Buy Online Pick Up in Store) have been made.
The Company has also forged key partnerships with ShopRunner,
Amazon and QVC. As a result, the Company now has the technology and
tools in place to capture and stay connected with its eight million
customers in new ways, whether in-store, online or virtually, and
to fully activate its omnichannel strategy.
As such, the Company has made the strategic decision to
rebalance the mix between its physical store presence with its
digital network and to close at least 250 stores in the U.S. over a
three-year period. This will allow the Company to take advantage of
its lease expiration cadence, while improving profitability and
return on invested capital. Closings will be across the three
brands and weighted to years two and three.
Review of Company Operations
Building upon management's strategic decision to right-size its
fleet, the Company has commenced a comprehensive review of its
operations to ensure that the business is structured for
innovation, agility and speed. With constantly changing customer
needs and shopping patterns, the Company is committed to enhancing
its effectiveness and efficiency to better meet her expectations
and drive profitable growth. The Company has a long record of
strong cost management, and this comprehensive review will further
include an assessment of SG&A expenses and business processes
across the entire organization.
Update to Fourth Quarter 2018 Outlook
The Company is updating its outlook for the fiscal 2018 fourth
quarter ending February 2, 2019.
Based on results to date, total Company fourth quarter net sales
and comparable sales are trending better than its previous outlook.
Specifically, by brand, fourth quarter comparable sales for Chico's
are trending in line with expectations. The Company continues to
implement its performance improvement plan for the Chico's brand,
and is putting guidelines in place so that future product
offerings, marketing and assortment architecture are aligned for
all customers who shop the Chico's brand. In addition, White House
Black Market comparable sales are trending better than
expectations, and Soma is strong with sales trending well above
expectations.
The Company anticipates a low double-digit decline in net sales
compared to its previous expectation for a mid-teen decline, which
includes the negative impact of the 53rd week of
$29 million in fiscal 2017, and a
mid-single digit decline in consolidated comparable sales, versus
its previous outlook for a high single-digit decline in
consolidated comparable sales.
The Company expects fourth quarter gross margin rate to decline
approximately 500 basis points compared to fiscal 2017, primarily
driven by the initial ramp-up in costs from the Company's
omnichannel programs, more aggressive promotional cadence to clear
through seasonal merchandise and deleverage of fixed costs from
lower sales. This compares to its previous expectation for a 400 to
500 basis point decline in the Company's gross margin rate.
SG&A expenses for the fourth quarter are expected to decrease
approximately $10 million compared
the prior year period, primarily due to the 53rd week in
fiscal 2017 and in line with the Company's previous
expectation.
Return of Capital
The Company's financial health and consistent strong cash flow
have enabled it to return significant dollars to shareholders while
continuing to make key investments in the business. During the
fourth quarter, through January 4,
2019, under its previously announced $300 million share repurchase program, the
Company repurchased over seven million shares for approximately
$41 million, at an average price of
$5.74 per share. There is
approximately $65 million remaining
for future share repurchases under the program.
ICR Conference
The Company will participate in the 2019 ICR Conference to be
held at the JW Marriott Orlando Grande lakes in Orlando Florida on January 14 – 16, 2019. Management is scheduled to
host a "Fireside Chat" on Monday, January
14, 2019 at 8:00 AM ET, which
will be webcast live and available for 12 months following the
event in the Investor Relations section of the Company's website at
www.chicosfas.com.
Fourth Quarter and Fiscal 2018 Results on March 6, 2019
The Company will release its full fourth quarter and fiscal 2018
results on March 6, 2019 and will
host a conference call to review financial results on that date.
Also included will be additional details and the financial impact
of the Company's retail fleet optimization plan and review of
operations. Details for the conference call will be announced at a
later time.
ABOUT CHICO'S FAS, INC.
The Company, through its brands – Chico's, White House Black
Market and Soma is a leading omnichannel specialty retailer of
women's private branded, sophisticated, casual-to-dressy clothing,
intimates and complementary accessories.
As of November 3, 2018, the Company operated 1,431 stores
in the U.S. and Canada and sold
merchandise through 83 international franchise locations in
Mexico. The Company's merchandise
is also available at www.chicos.com, www.chicosofftherack.com,
www.whbm.com and www.soma.com as well as through third party
channels. For more detailed information on the Company, please go
to our corporate website at www.chicosfas.com. The information on
our corporate website is not, and shall not be deemed to be, a part
of this press release or incorporated into our federal securities
law filings.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This press release contains
"forward-looking statements," within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which reflect our
current views with respect to certain events that could have an
effect on our future financial performance. These statements,
including without limitation statements made in Ms. Broader's
quotes and in the section and updated Fourth Quarter 2018 Outlook,"
relate to expectations concerning matters that are not historical
fact and may include the words or phrases such as "will," "should,"
"expects," "believes," "anticipates," "plans," "intends,"
"estimates," "approximately," "our planning assumptions," "future
outlook," and similar expressions. Except for historical
information, matters discussed in such statements are
forward-looking statements. These forward-looking statements are
based largely on information currently available to our management
and on our current expectations, assumptions, plans, estimates,
judgments and projections about our business and our industry, and
are subject to various risks and uncertainties that could cause
actual results to differ materially from historical results or
those currently anticipated. Although we believe our expectations
are based on reasonable estimates and assumptions, we cannot
guarantee their accuracy or our future performance, and there are a
number of known and unknown risks, uncertainties, contingencies,
and other factors (many of which are outside our control) that
could cause actual results to differ materially from those
expressed or implied by such forward-looking statements.
Accordingly, there is no assurance that our expectations will, in
fact, occur or that our estimates or assumptions will be correct,
and we caution investors and all others not to place undue reliance
on such forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to,
changes in the general economic and business environment, including
the expected impact of U.S. tax reform; changes in the general or
specialty retail or apparel industries; the availability of quality
store sites; the ability to successfully execute and achieve the
expected results of our business strategies and particular
strategic initiatives, sales initiatives and multi-channel
strategies, including the retail fleet optimization plan; customer
traffic; our ability to appropriately manage our inventory and
allocation processes; our ability to leverage inventory management
and targeted promotions; the successful leadership transition for
the Chico's brand and successful integration of the new members of
our senior management team; changes in the political environment
that create consumer uncertainty; significant changes to product
import and distribution costs (such as unexpected consolidation in
the freight carrier industry, and the ability to remain competitive
with customer shipping terms and costs pertaining to product
deliveries and returns); new or increased taxes or tariffs
(particularly with respect to China) that could impact, among other things,
our sourcing from foreign suppliers; significant shifts in consumer
behavior; and those other factors described in Item 1A, "Risk
Factors" and in the "Forward-Looking Statements" disclosure in Item
7. "Management's Discussion and Analysis of Financial Condition and
Results of Operations" of our latest annual report on Form 10-K and
in Part II, Item 1A, "Risk Factors" and the "Forward-Looking
Statements" disclosure in Part I, Item 2. "Management's Discussion
and Analysis of Financial Condition and Results of Operation" of
our quarterly reports on Form 10-Q and in other reports we file
with or furnish to the Securities and Exchange Commission. There
can be no assurance that the actual future results, performance, or
achievements expressed or implied by such forward-looking
statements will occur. All forward-looking statements that are made
or attributable to us are expressly qualified in their entirety by
this cautionary notice. 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.
Executive Contact:
Julie
Lorigan
Vice President – Investor Relations,
Public Relations and Corporate Communications
Chico's FAS, Inc.
(239) 346-4199
Chico's FAS, Inc. • 11215 Metro Parkway • Fort Myers, Florida 33966 • (239) 277-6200
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SOURCE Chico's FAS, Inc.