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): February 28, 2019
 
Chico’s FAS, Inc.
(Exact Name of Registrant as Specified in its Charter)
 
  Florida
(State or Other Jurisdiction of Incorporation)
 
 
 
 
001-16435
 
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):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨

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

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨





Item 2.02. Results of Operations and Financial Condition
On March 6, 2019 , Chico’s FAS, Inc. (the “Company”) issued a press release announcing its fourth quarter and year-end earnings for the period ended February 2, 2019 .
A copy of the release issued on March 6, 2019 is attached to this Report as Exhibit 99.1 and is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(c) On March 6, 2019, the Company announced that its Board of Directors has appointed Karen McKibbin as the President of its Chico's brand, effective April 1, 2019. Ms. McKibbin, 59, is joining the Company after having served as President of Nordstrom Rack, an off-price fashion retailer, since 2017. From 2012 until 2017, Ms. McKibbin served as President of Nordstrom Canada, an international fashion retailer. Previously at Nordstrom, she served as Vice President and led four different regions for that company. Ms. McKibbin also served in merchandising and store management roles at Nordstrom.
There are no arrangements or understandings between Ms. McKibbin and any other persons pursuant to which Ms. McKibbin was selected as an officer, nor are there any family relationships between Ms. McKibbin and any of the Company's directors or executive officers. Neither Ms. McKibbin nor any related person of Ms. McKibbin has a direct or indirect material interest in any existing or currently proposed transaction to which the Company is or may become a party.
The Company has entered into a letter agreement dated March 4, 2019 with Ms. McKibbin, which provides for an annual salary and certain other benefits. Pursuant to the letter agreement, Ms. McKibbin's base salary is $725,000, subject to annual increases as set from time to time by the Company’s Board of Directors. Upon commencement of employment, Ms. McKibbin will be awarded a sign-on bonus of $25,000, which is subject to repayment if she voluntarily resigns from the Company within twelve months of her start date. Additionally, Ms. McKibbin will be awarded a sign-on grant of 170,000 restricted shares of the Company’s common stock following her employment commencement date, which will vest over a three-year period with one-third vesting each year on the anniversary of the grant date. Beginning in fiscal 2019, Ms. McKibbin is also eligible for an annual bonus under the Company’s Amended and Restated Cash Bonus Incentive Plan with a target of 80% of her base salary, and a payout range from 0% to 200% of her target, if earned, and a minimum guaranteed bonus of $290,000 for fiscal 2019. Ms. McKibbin will be eligible for annual equity grants beginning in fiscal 2020 in the discretion of the Human Resources, Compensation and Benefits Committee of the Board of Directors. Ms. McKibbin is also eligible to receive certain severance benefits in the case of an involuntary termination under certain circumstances, including a change-in-control under the Company’s Executive Severance Plan. She will also be provided certain relocation benefits. Ms. McKibbin is also eligible to participate in the Company’s employee benefit plans and programs on terms offered to similarly situated employees.
The foregoing description of the letter agreement is not complete and is qualified in its entirety by reference to the full text of such agreement included as Exhibit 10.1 to this Form 8-K.
Ms. McKibbin is also subject to restrictive covenants as detailed in the Restrictive Covenant Agreement included as Exhibit 10.2 to this Form 8-K.
A copy of the release issued on March 6, 2019 is attached to this Report as Exhibit 99.2.
Item 8.01 Other Events
On February 28, 2019, the Company issued a press release announcing its Board of Directors declared a quarterly cash dividend of $0.0875 per share.
A copy of the release issued on February 28, 2019 is attached to this Report as Exhibit 99.3 and is incorporated by reference therein.




Item 9.01. Financial Statements and Exhibits
 
(d)
Exhibits:





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 6, 2018
 
 
 
 
 
By:
 
 
 
 
 
 
/s/ Todd E. Vogensen
 
 
 
 
 
 
Todd E. Vogensen, Executive Vice President, Chief Financial Officer and Assistant Corporate Secretary




INDEX TO EXHIBITS
 
 
 
 
Exhibit
Number
  
Description
 
 
Exhibit 99.1
  
Exhibit 99.2
  
Exhibit 99.3
 
Exhibit 10.1
 
Exhibit 10.2
 




Exhibit 10.1


March 4, 2019            

Ms. Karen McKibbin
XXXX XXXXXXX XXXXXX
XXX XXXXXXXXX, XX XXXXX

Dear Karen:

It is with great pleasure that we offer you the opportunity to join Chico’s FAS, Inc. as our Brand President, Chico’s. As you are aware, we are a respected organization within which this position is a key driver of our success. As one of the top specialty retailers, we offer tremendous opportunity for personal and professional growth. Please let this letter serve as an offer to join Chico’s FAS, Inc. and your acceptance of that offer. The following will outline the specifics:

Position:            Brand President, Chico’s

Reports to:           Shelley Broader, President and CEO

Start Date:         April 1, 2019

Base Salary:     $725,000.00 annually
Sign-On Bonus:
You will receive a sign-on bonus of $25,000 payable within 30 days of start date, less applicable taxes (contingent upon receipt of the attached repayment agreement).

Bonus Plan:
Target of 80% of base salary earned during the FY19 performance period (February 2019 to January 2020), which is contingent upon the achievement of corporate and brand financial objectives. The terms of the bonus, including eligibility, payouts and objectives are subject to the Management Bonus Plan and may be modified from time to time. All payouts are based on fiscal year business results and can vary from zero (0) to a maximum of 200% of your target bonus potential (160% of base salary earned). Bonus is typically paid in March, after the conclusion of the fiscal year.
For FY19, you will be provided with a bonus guarantee of $290,000, which represents 50% of your annual target bonus. Payment of the guaranteed bonus is contingent on continued employment at the time of payment.
Equity Grants:
You will receive a new hire equity grant of 170,000 shares of Restricted Stock shortly after hire. You will also be eligible for annual equity grants beginning in FY20. The target amount of such grants and the vesting conditions are established by the Human Resources, Compensation and Benefits Committee of our Board of Directors on an annual basis and may change from year to year. Currently, the grant for your position is targeted at $1,000,000, delivered in a combination of 50% Restricted Stock and 50% Performance Share Units.

The Restricted Stock shares will vest ratably over a three-year period. The Performance Share Units will cliff vest over a three-year period, contingent upon the achievement of corporate financial objectives and
could range from zero (0%) to a maximum of 175% of the target award . Annual equity grants are typically made in March.
Annual Review:
You will be eligible for the FY19 performance appraisal process in April 2020.


Time Off:
You will be eligible for 23 days of Paid Time Off (PTO) for each full calendar year of employment. This is an accrued benefit that you start to earn on your start date. In addition, Chico’s FAS, Inc. currently observes six paid holidays and two floating days of your choice.

You will also be eligible to participate in Chico’s FAS, Inc. comprehensive benefits program outlined below:

Group Insurance Program:
Medical/Dental/Vision Plans
Eligibility Date: Effective your first day of active employment

Life Insurance:
The company provides term insurance equal to 1X your base salary as well as accidental death and dismemberment insurance equal to 1X your base salary ($500,000 maximum). Supplemental insurance is available for purchase.
Eligibility Date: Effective your first day of active employment

Short and Long Term Disability:
The company provides short and long term disability benefits.
Eligibility Date: Effective your first day of active employment

401(k) Plan:
You may participate with an eligible deferral of your compensation (subject to an IRS maximum), with a company match of 50% of your deferral. Your 401(k) contributions may be subject to additional limitations under federal regulations.  You will be able to roll over existing qualified funds immediately. 
Eligibility Date: After 6 months of employment
Deferred Compensation:  
You will be eligible to participate in our Deferred Compensation Plan. You will have the opportunity to defer pre-tax compensation (less applicable FICA/Medicare tax withholding). You may defer up to 80% of your base salary payable during the current calendar year with a company match of 50% on the first 2.5% you defer, and up to 100% of your bonus for the applicable fiscal year.
Eligibility Date: Deferral available upon hire and 30-day enrollment period
Employee Stock Purchase Plan:
You will have an opportunity to purchase Chico’s FAS, Inc. stock directly from the company, two times a year, during the March and September Offering Periods.
Eligibility Date : First Offering Period following 6 months of employment


Executive Benefits
Disability Income Protection:                                                                                    
As an officer, you will be eligible for Chico’s FAS, Inc.’s Supplemental Disability Insurance program after 90 days of employment. This program provides an increased level of income protection should you become totally disabled. Full details of the program will be provided by the Benefits Department.

Annual Physical:                                                                                                       
As an officer, you are eligible to have one company paid physical per year at the Mayo Clinic in Jacksonville, FL as part of our Health and Wellness program.

Executive Severance Plan:                                                                                                       


As a qualifying executive, you are eligible for severance benefits pursuant to the attached Chico’s FAS, Inc. Officer Severance Plan.

The items listed above are covered by various benefit plans. Such benefit plans may be modified from time to time. In the event this offer letter conflicts with the terms of a benefit plan document or summary plan description, the terms of the plan document or summary plan description will control.
Child Care:  
Chico’s FAS, Inc. is pleased to provide an early education and child development center located on campus. The center is operated by Bright Horizons Family Solutions Inc., a best in class child care provider. The center accommodates children from ages 6 weeks to 5 years. Summer program options are also available for children ages 5 to 12.
Relocation Benefits:  
In order to ensure a successful relocation, you will be provided relocation assistance as detailed in the attached Tier I Relocation Program.  In accordance with this relocation policy, you will receive a miscellaneous allowance of $8,000 net of taxes.
By accepting our offer of employment, you acknowledge the at-will nature of our relationship. This offer is contingent upon the successful verification of references, background check, in addition to your execution of our attached Restrictive Covenant Agreement, substantially illustrated in the form attached. Additionally, you represent that you are not a party to any agreement that would bar or limit the scope of your employment with us.
We hope you view this opportunity as a chance to have a positive impact while enjoying a challenging and rewarding career. Nonetheless, please understand that Chico’s FAS, Inc. is an at-will employer. That
means that either you or the company are free to end the employment relationship at any time, with or without notice or cause.
We are looking forward to having you on our team. Let me be the first to welcome you aboard! We are sure you will find it a challenging and rewarding experience. If you have any questions, please feel free to contact us at the number indicated below.

Sincerely,

/s/ Shelley Broader
Shelley Broader
President and CEO


Contact Information

For questions, please call:
Kristin Gwinner
SVP, CHRO
(XXX) XXX-XXXX


I accept the terms and conditions of the offer as outlined above:

Please return a signed copy

/s/ Karen McKibbin
Karen McKibbin



Exhibit 10.2
RESTRICTIVE COVENANT AGREEMENT

THIS RESTRICTIVE COVENANT AGREEMENT (this “ Agreement ”) is made and entered into this 5th day of March, 2019 (the “ Effective Date ”), by and between Chico’s FAS, Inc., a Florida corporation, having a principal place of business at 11215 Metro Parkway, Fort Myers, FL 33966 (the “ Employer ”), and Karen McKibbin (the “ Executive ”). In consideration of the mutual covenants herein contained and intending to be legally bound hereby, the parties hereto agree to the following:
1. Employment . Employer desires to employ Executive in the position of Brand President, Chico’s (the “Position”), and Executive desires to accept such Position. In the Position, Executive will assume a key role in the organization that will require confidentiality and trust and will acquire information, knowledge and experience with Employer that is proprietary, confidential, unique and hard to replace. It would also place Employer at an unfair disadvantage, and Executive at an unfair advantage, should Executive use this information, knowledge, and experience to further the interests of anyone other than Employer. As a result, Employer desires to protect its rights in its proprietary, confidential and trade secret information, and, as a condition of employment and for the consideration set forth herein, Executive is willing to and has agreed to abide by and faithfully observe the obligations and restrictions set forth herein .
2.      Loyalty During Employment . While employed with Employer, Executive will remain loyal to Employer and will not engage in any activities that create a conflict of interest. Executive understands that it will be a conflict of interest for Executive to pursue business activities that compete with Employer while employed with Employer or to engage in material preparations to do so. Executive will promptly inform Employer of any business opportunities related to Employer’s line of business, and will not pursue any such business opportunities independent from Employer without advance written authorization from Employer to do so.
3.      Confidential Information .
(a)      Nondisclosure and Non-use . Both during Executive’s employment with Employer and thereafter, Executive covenants and agrees that Executive (i) shall exercise the utmost diligence to protect and safeguard the Confidential Information of Employer and its Affiliates; (ii) shall not disclose to any third party any Confidential Information, except as may be required by Employer in the course of Executive’s employment or by law; and (iii) shall not use, directly or indirectly, for Executive’s own benefit or for the benefit of another, any Confidential Information. Executive acknowledges that Confidential Information has been and will be developed and acquired by Employer and its Affiliates by means of substantial expense and effort, that the Confidential Information is a valuable proprietary asset of Employer’s and its Affiliates’ business, and that its disclosure would cause substantial and irreparable injury to Employer’s and its Affiliates’ business.



For purposes of this Agreement, “ Affiliate ” shall mean any entity controlling, controlled by, or under common control of, Employer.
(b)      Definition of Confidential Information . “ Confidential Information ” means all information of a confidential or proprietary nature, whether or not specifically labeled or identified as “confidential,” in any form or medium, that is or was disclosed to, or developed or learned by, Executive in connection with Executive’s past, present or future employment with Employer and that relates to the business, products, services, research or development of any of the Employer or its Affiliates or their suppliers, distributors or customers. Confidential Information includes, but is not limited to, the following: (i) internal business information (including, but not limited to, information relating to strategic plans and practices, business, training, marketing, promotional and sales plans and practices, cost, rate and pricing structures, accounting and business methods); (ii) identities of, individual requirements of, specific contractual arrangements with, and information about, any of Employer’s, or any of its Affiliates’, suppliers, distributors and customers and their confidential information; (iii) trade secrets, know-how, compilations of data and analyses, techniques, systems, formulae, research, records, reports, manuals, documentation, models, data and data bases relating thereto; (iv) inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable); and (v) other information or thing that has economic value, actual or potential, from not being generally known to or not being readily ascertainable by proper means by other persons.
(c)      Not Confidential Information . Confidential Information shall not include information that Executive can demonstrate: (i) is publicly known through no wrongful act or breach of obligation of confidentiality; (ii) was rightfully received by Executive from a third party without a breach of any obligation of confidentiality by such third party; or (iii) was known to Executive on a non-confidential basis prior to the Executive’s employment with Employer.
(d)      Presumption of Confidentiality . In any judicial proceeding, it will be presumed that the Confidential Information constitutes protectable trade secrets and Executive will bear the burden of proving that any Confidential Information is publicly or rightfully known by Executive.
(e)      Return of Confidential Information and Materials . Executive agrees to return to Employer either before or immediately upon the termination of Executive’s employment with Employer any and all information, materials or equipment which constitutes, contains, or in any way relates to the Confidential Information and any other document, equipment or materials of any kind relating in any way to the business of Employer in the possession, custody or control of Executive which was obtained by Executive during the course of or as a result of Executive’s employment with Employer whether confidential or not, including, but without limitation, any copies thereof which may have been made by or for Executive. Executive shall also provide



Employer, if requested to do so, the name of the new employer of Executive and Employer shall have the right to advise any subsequent employer of Executive’s obligations hereunder.
4.      Non-Competition . Executive covenants and agrees that during the term of Executive’s employment with the Employer and for a twelve (12) month period [six (6) month period for Vice Presidents] [twenty-four (24) month period in the case of the Chief Executive Officer] after the date of termination of the Executive’s employment hereunder for any reason (the “ Restricted Period ”), Executive will not, directly or indirectly, perform any job, task, function, skill, or responsibility for a Competing Business that Executive has provided for Employer (and/or its Affiliates) within the twelve (12) month period immediately preceding Executive’s termination date within the Restricted Territory. For purposes of this Agreement, a “ Competing Business ” shall mean any direct competitor of the Employer which, in general, means a specialty retailer of: (i) better women’s intimate apparel, sleepwear and bath and body products; or (ii) better women’s apparel whose target customers are 35 years of age or older and have an annual household income of $75,000 or more. Competing Business includes, but is not limited to: The J. Jill Group, Inc., L Brands, Inc., Soft Surroundings Holdings, LLC, The Talbots, Inc., GAP, Inc., Victoria’s Secret Stores, Inc., and Ascena Retail Group, Inc. The “ Restricted Territory ” means where Employer’s products are marketed at the time of Executive’s termination.
This covenant on the part of Executive shall be construed as an agreement independent of any other provision of this Agreement; and the existence of any claim or cause of action of Executive against Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Employer of this covenant. Executive expressly agrees that the restrictions of this Section 4 will not prevent Executive from otherwise obtaining gainful employment upon termination of Executive’s employment with Employer.

5.      Non-Solicitation of Customers, Suppliers, and Business Associates . For a period of two (2) years after the date of termination of Executive’s employment for any reason, Executive shall not directly or indirectly induce, solicit or encourage any customer, supplier or other business associate of Employer or an Affiliate to terminate or alter its relationship with Employer or Affiliate, or introduce, offer or sell to or for any customer or business associate, any products or services that compete with an Employer product, service, marketing item, or other item which presently exists, or which was under development or active consideration during Executive’s employment with Employer.
6.      Non-Solicitation of Employees . For a period of two (2) years after the date of termination of Executive’s employment for any reason, Executive shall not, directly or indirectly, induce, solicit or encourage any employee of Employer or its Affiliates to terminate or alter his or her relationship with Employer or its Affiliates.
7.      Remedies .



(a)      Injunctive Relief . It is agreed by the parties hereto that any violation by Executive of any of the covenants contained herein would cause immediate, material and irreparable harm to Employer and/or its Affiliates which may not be adequately compensated for by money damages, and, therefore, Employer and/or its Affiliates shall be entitled to injunctive relief (including, without limitation, one or more preliminary injunctions and/or ex parte restraining orders) in addition to, and not in derogation of, any other remedies provided by law, in equity or otherwise for such a violation including, but not limited to, the right to have such covenants specifically enforced by any court of competent jurisdiction and the right to require Executive to account for and pay to Employer and/or its Affiliates all benefits derived or received by Executive as a result of any such breach of covenant together with interest thereon, from the date of such initial violation until such sums are received by Employer and/or its Affiliates.  The Restricted Period set forth herein shall be extended by any period of time in which Executive is in breach of the covenants contained in this Agreement and for any period of time which may be necessary to secure an order of court or injunction, either temporary or permanent, to enforce any of the covenants contained in this Agreement.
(b)      Executive Acknowledgment . Executive acknowledges and agrees that the periods of restriction and geographical areas of restriction imposed by the confidentiality and non-competition covenants of this Agreement are fair and reasonably required for the protection of Employer and its Affiliates.
8.      At-Will . Nothing in this Agreement is intended to alter the at-will nature of Executive’s employment.
9.      Severability . In the event that, and if for any reason, any portion of this Agreement shall be held to be invalid or unenforceable, it is agreed that the remaining covenants and restrictions or portions thereof shall remain in full force and effect, and that if the validity or unenforceability is due to the unreasonableness of the time or geographical area covered by said covenants and restrictions, said covenants and restrictions of this Agreement shall nevertheless be effective for such period of time and for such area as may be determined to be reasonable by a court of competent jurisdiction.
10.      Integration . This Agreement contains the entire agreement between the parties regarding the matters covered within it. To the extent other agreements cover the matters contained herein, the provisions of such agreements shall be read together with the provisions of this Agreement to afford Employer the greatest protections allowed by applicable law.
11.      Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without reference to its conflict of laws provisions.



12.      Binding Effect . This Agreement is binding upon the parties hereto and on their respective heirs, personal representatives, successors and assigns. Executive agrees that the obligations contained in this Agreement will survive the termination of this Agreement.
13.      Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Nothing in this Agreement prohibits Executive from reporting an event that Executive reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Opportunity Commission, or Department of Labor), or from cooperating in an investigation conducted by such government agency.  Executive is hereby provided notice that under the 2016 Defend Trade Secrets Act (DTSA):  (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for disclosure of a trade secret (as defined under the DTSA) that:  (A) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

This Agreement shall be considered made on the date signed by Executive below which shall be the effective date of this Agreement unless Executive is entering into this Agreement as part of Executive’s original hiring, transfer or promotion into a new position in which case the terms of this Agreement are understood to be effective as of the first day of Executive’s employment in such new position (whether reduced to writing on that specific date or not).

EMPLOYER:


/s/ Greg Baker                         DATE: March 5, 2019
Greg Baker
General Counsel                                 



EXECUTIVE:


/s/ Karen McKibbin                     DATE: March 5, 2019
Karen McKibbin


Exhibit 99.1

CHICOSFASANDBRANDLOGOSA19.JPG

Chico’s FAS, Inc. Reports Fourth Quarter and Fiscal Year 2018 Results

•
Fourth quarter GAAP loss of $0.14 per share; Adjusted fourth quarter loss of $0.07 per share
•
Net cash provided by operating activities of $158 million ; Generated $104 million free cash flow in fiscal 2018
•
Karen McKibbin appointed new Chico’s Brand President
•
Retail fleet optimization plan and operating review on track

Fort Myers, FL - March 6, 2019 - Chico’s FAS, Inc. (NYSE: CHS) (the “Company”) today announced its financial results for the fiscal 2018 fourth quarter and fiscal year ended February 2, 2019 .
For the thirteen weeks ended February 2, 2019 (“the fourth quarter”), the Company reported a net loss of $16.6 million , or $0.14 diluted loss per share, compared to net income of $28.0 million , or $0.22 diluted earnings per share, for the fourteen weeks ended February 3, 2018 (“last year’s fourth quarter”). The Company reported a fourth quarter adjusted net loss of $8.6 million , or $0.07 diluted loss per share, compared to adjusted net income of $14.5 million , or $0.11 diluted earnings per share, as presented in the related accompanying GAAP to non-GAAP reconciliation.
    For the fifty-two weeks ended February 2, 2019 (“fiscal 2018 “), the Company reported net income of $35.6 million , or $0.28 diluted earnings per share, compared to net income of $101.0 million , or $0.79 diluted earnings per share, for the fifty-three weeks ended February 3, 2018 (“fiscal 2017 “). The Company reported fiscal 2018 adjusted net income of $38.8 million , or $0.31 diluted earnings per share, compared to adjusted net income of $92.7 million , or $0.72 diluted earnings per share, as presented in the related accompanying GAAP to non-GAAP reconciliation.
Shelley Broader, CEO and President of the Company, said, “We achieved sequential improvement in comparable sales in all three brands in the fourth quarter, and with work continuing across the Company, we believe we are better positioned heading into the new fiscal year. We are focused on driving sales, efficiencies and agility throughout the organization as we leverage our robust omnichannel capabilities. At our namesake Chico’s brand, improvement actions are taking hold, and we expect that Karen, our new Chico’s Brand President, will further advance these efforts. I am confident that all the actions underway will enable the Company to compete, succeed and drive value creation.”
Update on Chico’s Brand Performance Improvement Plan
•
Recent adjustments made to planning and allocation strategies for certain basics and top key items improved in-stock availability for these items, which in combination with repositioned marketing and promotions, helped drive the sequential improvement in comparable sales.
•
The Company announced separately today, that Karen McKibbin has been appointed as the new Chico’s Brand President, effective April 1, 2019. Ms. McKibbin brings substantial merchandising, operations and retail experience that we believe will successfully advance the improvement efforts underway.
•
As previously announced, the Company has adjusted the spring and summer assortments at Chico’s to appropriately balance merchandise architecture, reduce planned receipts and chase more merchandise that is performing well.
•
Strategies to further improve product aesthetic and architecture are also well underway for fall deliveries.

Page 1

Update on Retail Fleet Optimization Plan
•
As previously announced, the Company intends to close at least 250 stores in the U.S. over the next three years as part of its efforts to better capitalize on its omnichannel platform, reduce costs, improve profitability and return on invested capital.
•
Under this plan, the Company expects to close approximately 100 Chico’s, 90 White House Black Market and 60 Soma locations over the next three years, with the majority of the closings occurring in years two and three.
•
In fiscal 2019, the closures are expected to be approximately 60 to 80 stores. The closings will be across all brands and weighted to the second half of the fiscal year. The closings are expected to have minimal impact on sales and earnings in fiscal 2019.     
•
In the fourth quarter, the Company recorded pre-tax impairment and accelerated depreciation charges within cost of goods sold of $9.4 million and $1.3 million , respectively, related to the retail fleet optimization plan. On an after-tax basis, the fourth quarter impact of these charges was $8.1 million , or $0.07 per diluted share.
Review of Company Operations
•
In January 2019, the Company initiated a review of its operations to identify opportunities to enhance its capabilities and reduce costs. The Company has engaged outside consultants to assist with the review.
•
As part of the review, the Company has identified opportunities for process improvement efficiencies and meaningful annualized cost savings in its Sourcing and Supply Chain. These efficiencies build upon the Company’s previous supply chain initiatives implemented in fiscal 2016.
•
The Company’s review is ongoing, and other areas under evaluation include Marketing, Shared Services and all customer touch points.
Other Fourth Quarter Business Highlights
•
Soma reported positive comparable sales of 6.2%. This better-than-expected performance was primarily driven by solution bras. In January, the brand successfully launched SOMAINNOFIT™, which uses a revolutionary way to help women find their best bra fit through a mobile app.
•
White House Black Market comparable sales improved sequentially, compared to the third quarter. The brand continued to make progress in refining its polished workwear and polished casual merchandise assortments to better meet its customers’ expectations.
•
The Company remains on track to rollout Style Connect TM , an enhanced platform that provides digitized clienteling tools, to all stores in the first quarter of 2019. The rollout has already begun in eight U.S. markets, and includes training and placement of virtual stylists.
Net Sales
For the fourth quarter, net sales were $524.7 million compared to $587.8 million in last year’s fourth quarter. This decrease of 10.7% reflects the $29 million benefit of the 53 rd week in last year’s fourth quarter, a comparable sales decline of 3.8% and a decrease in selling square footage in fiscal 2018 . The comparable sales decline was driven by a decrease in transaction count and lower average dollar sale.
For fiscal 2018 , net sales were $2.1 billion compared to $2.3 billion in fiscal 2017 . This decrease of 6.6% reflects a comparable sales decline of 4.9% , the $29 million benefit of the 53 rd week in fiscal 2017 and a decrease in selling square footage in fiscal 2018 . The comparable sales decline was driven by a decrease in transaction count and lower average dollar sale.

Page 2

Comparable Sales
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
February 2, 2019 (1)
 
January 27, 2018
 
February 2, 2019 (1)
 
January 27, 2018
Chico's
(7.9
)%
 
(3.2
)%
 
(6.8
)%
 
(7.2
)%
White House Black Market
(2.9
)%
 
(9.3
)%
 
(4.6
)%
 
(10.9
)%
Soma
6.2
 %
 
(2.3
)%
 
0.6
 %
 
(1.5
)%
Total Company
(3.8
)%
 
(5.2
)%
 
(4.9
)%
 
(7.7
)%
(1) Comparable sales for the thirteen and fifty-two weeks ended have been adjusted to eliminate the impact of the calendar shift due to the 53 rd week in fiscal 2017. Fiscal 2018 comparable sales represent sales for the thirteen and fifty-two weeks ended February 2, 2019 compared to sales for the thirteen and fifty-two weeks ended February 3, 2018.
Gross Margin
For the fourth quarter, gross margin was $158.7 million , or 30.2% of net sales, compared to $221.6 million , or 37.7% of net sales, for last year’s fourth quarter. The decline in gross margin primarily reflects a 550-basis point decrease related to the clearing of Chico’s brand seasonable merchandise, the continued expansion of our omnichannel programs and deleverage of occupancy costs as well as a 200-basis point charge due to our retail fleet optimization plan.
Selling, General and Administrative Expenses
For the fourth quarter, selling, general and administrative expenses (“SG&A”) were $180.8 million , or 34.4% of net sales, compared to $192.0 million , or 32.7% of net sales, for last year’s fourth quarter. This decrease of $11.2 million primarily reflects approximately $10.0 million related to the 53 rd week in last year’s fourth quarter and a decrease in incentive compensation, partially offset by investments in technology and costs related to outside consultants.
Income Tax
For the fourth quarter, the effective tax rate was 24.5% compared to 4.4% for last year’s fourth quarter. Included in last year’s fourth quarter was an approximate $10.0 million benefit resulting from the impact of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). Excluding this impact, the effective tax rate in last year’s fourth quarter was 37.7%.
The fiscal 2018 effective tax rate was 17.8% compared to fiscal 2017 effective tax rate of 29.7%. This reduction was primarily due to the impact of the Tax Act and transitional tax reform benefits related to fiscal 2017 recorded in the current year, partially offset by a 330-basis point increase in tax expense related to the accounting for employee share-based awards. Excluding the transitional tax reform benefits related to fiscal 2017, the fiscal 2018 effective tax rate was 29.1%.
Cash, Marketable Securities and Debt
At the end of the fourth quarter, cash and marketable securities totaled $186.1 million , a decrease of $34.0 million compared to last year’s fourth quarter, while debt totaled $57.5 million , a decrease of $11.1 million from last year’s fourth quarter. This $34.0 million decrease in cash and marketable securities includes $124.3 million in return of cash to shareholders through dividends and our share repurchase program.
Inventories
At the end of fiscal 2018 , inventories totaled $235.2 million compared to $233.7 million at the end of fiscal 2017 . This $1.5 million , or 0.6% increase , primarily reflects accelerated in-transits due to the timing of the Chinese New Year, partially offset by a 7% decrease in on-hand inventory compared to the end of fiscal 2017 .
Share Repurchase Program
During the fourth quarter of 2018 , under its $300.0 million share repurchase program announced in November 2015, the Company repurchased 8.6 million shares for $50.2 million , at a weighted average of $5.81 per share. The

Page 3

Company has $55.2 million remaining under the program. During fiscal 2018 , the Company repurchased a total of 12.2 million shares for $81.1 million , at a weighted average of $6.65 per share.
Fiscal 2019 First Quarter and Full-Year Outlook
The Company is providing its outlook for fiscal 2019 as it continues to execute the Chico’s brand performance improvement plan, optimize its retail fleet and implement initiatives to improve its operating effectiveness. This outlook excludes expected net charges related to the retail fleet optimization plan.
For the fiscal 2019 first quarter, the Company anticipates a mid to high-single-digit decline in total net sales and consolidated comparable sales compared to the fiscal 2018 first quarter, reflecting softer sales throughout the month of February.
For the fiscal 2019 first quarter, the Company expects gross margin as a percent of net sales to decline approximately 300 to 400 basis points compared to the fiscal 2018 first quarter, due primarily to incremental costs associated with its omnichannel programs and deleverage of fixed costs from lower sales.
Fiscal 2019 first quarter SG&A is expected to be approximately flat compared to the fiscal 2018 first quarter, reflecting savings in the Chico’s brand, offset by investments in Soma marketing.
For full year fiscal 2019, the Company anticipates a low-single-digit decline in total net sales and consolidated comparable sales compared to fiscal 2018.
For full year fiscal 2019, the Company expects gross margin as a percent of net sales to be approximately flat to down 50 basis points compared to fiscal 2018, due to incremental costs associated with its omnichannel programs. The Company also anticipates SG&A to be approximately flat compared to fiscal 2018, reflecting investments in Soma marketing, offset by continued cost management.
The Company expects fiscal 2019 capital expenditures to be approximately $55 million, primarily driven by technology enhancements and focused store reinvestments. The Company estimates a fiscal 2019 tax rate in the range of 30% to 33% primarily as a result of an increase in tax expense related to the accounting for employee share-based awards.
    
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 February 2, 2019 , the Company operated 1,418 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 entitled “Fiscal 2019 First Quarter and Full-Year 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

Page 4

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; 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 (including, but not limited to, the Company’s retail fleet optimization plan, Chico’s brand improvement plan and expanded review of the Company’s operations); sales initiatives and multi-channel strategies; 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.


(Financial Tables Follow)





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

Page 5



Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
(in thousands, except per share amounts)

 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
February 2, 2019
 
February 3, 2018
 
February 2, 2019
 
February 3, 2018
 
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
 
Amount
 
% of
Sales
Net sales:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chico's
 
$
251,460

 
48.0
 %
 
$
290,699

 
49.4
 %
 
$
1,098,707

 
51.6
%
 
$
1,187,603

 
52.0
 %
White House Black Market
 
175,413

 
33.4

 
197,919

 
33.7

 
694,804

 
32.6

 
750,912

 
32.9

Soma
 
97,855

 
18.6

 
99,165

 
16.9

 
337,629

 
15.8

 
343,864

 
15.1

Total net sales
 
524,728

 
100.0

 
587,783

 
100.0

 
2,131,140

 
100.0

 
2,282,379

 
100.0

Cost of goods sold
 
366,027

 
69.8

 
366,222

 
62.3

 
1,367,726

 
64.2

 
1,417,602

 
62.1

Gross margin
 
158,701

 
30.2

 
221,561

 
37.7

 
763,414

 
35.8

 
864,777

 
37.9

Selling, general and administrative expenses
 
180,846

 
34.4

 
192,002

 
32.7

 
719,748

 
33.8

 
719,607

 
31.5

(Loss) income from operations
 
(22,145
)
 
(4.2
)
 
29,559

 
5.0

 
43,666

 
2.0

 
145,170

 
6.4

Interest income (expense), net
 
105

 
0.0

 
(284
)
 
0.0

 
(353
)
 
0.0

 
(1,570
)
 
(0.1
)
(Loss) income before income taxes
 
(22,040
)
 
(4.2
)
 
29,275

 
5.0

 
43,313

 
2.0

 
143,600

 
6.3

Income tax (benefit) provision
 
(5,400
)
 
(1.0
)
 
1,300

 
0.2

 
7,700

 
0.4

 
42,600

 
1.9

Net (loss) income
 
$
(16,640
)
 
(3.2
)
 
$
27,975

 
4.8

 
$
35,613

 
1.6

 
$
101,000

 
4.4

Per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (loss) income per common share-basic
 
$
(0.14
)
 
 
 
$
0.22

 
 
 
$
0.28

 
 
 
$
0.79

 
 
Net (loss) income per common and common equivalent share–diluted
 
$
(0.14
)
 
 
 
$
0.22

 
 
 
$
0.28

 
 
 
$
0.79

 
 
Weighted average common shares outstanding–basic
 
118,440

 
 
 
124,747

 
 
 
122,662

 
 
 
125,341

 
 
Weighted average common and common equivalent shares outstanding–diluted
 
118,440

 
 
 
124,808

 
 
 
122,729

 
 
 
125,403

 
 
Dividends declared per common share
 
$
0.085

 
 
 
$
0.0825

 
 
 
$
0.34

 
 
 
$
0.33

 
 

Page 6





Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)


 
February 2, 2019
 
February 3, 2018
ASSETS
Current Assets:
 
 
 
Cash and cash equivalents
$
124,128

 
$
160,071

Marketable securities, at fair value
61,987

 
60,060

Inventories
235,218

 
233,726

Prepaid expenses and other current assets
63,845

 
60,668

Total Current Assets
485,178

 
514,525

Property and Equipment, net
370,932

 
421,038

Other Assets:
 
 
 
Goodwill
96,774

 
96,774

Other intangible assets, net
38,930

 
38,930

Other assets, net
15,220

 
16,338

Total Other Assets
150,924

 
152,042

 
$
1,007,034

 
$
1,087,605

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
 
 
 
Accounts payable
$
143,404

 
$
118,253

Current debt
—

 
15,000

Other current and deferred liabilities
131,820

 
133,715

Total Current Liabilities
275,224

 
266,968

Noncurrent Liabilities:
 
 
 
Long-term debt
57,500

 
53,601

Other noncurrent and deferred liabilities
89,109

 
103,282

Deferred taxes
5,237

 
7,372

Total Noncurrent Liabilities
151,846

 
164,255

Commitments and Contingencies
 
 
 
Shareholders’ Equity:
 
 
 
Preferred stock
—

 
—

Common stock
1,169

 
1,275

Additional paid-in capital
486,406

 
468,806

Treasury stock, at cost
(494,395
)
 
(413,465
)
Retained earnings
587,145

 
599,810

Accumulated other comprehensive loss
(361
)
 
(44
)
Total Shareholders’ Equity
579,964

 
656,382

 
$
1,007,034

 
$
1,087,605




Page 7



Chico’s FAS, Inc. and Subsidiaries
Condensed Consolidated Cash Flow Statements
(Unaudited)
(in thousands)

 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
February 2, 2019
 
February 3, 2018
Cash Flows from Operating Activities:
 
 
 
Net income
$
35,613

 
$
101,000

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
91,333

 
96,310

Loss on disposal and impairment of property and equipment
13,628

 
7,042

Deferred tax benefit
(2,100
)
 
(2,070
)
Share-based compensation expense
19,783

 
20,677

Deferred rent and lease credits
(19,527
)
 
(19,692
)
Changes in assets and liabilities:
 
 
 
Inventories
(2,316
)
 
(1,363
)
Prepaid expenses and other assets
1,250

 
(4,895
)
Accounts payable
25,097

 
1,950

Accrued and other liabilities
(4,687
)
 
(32,086
)
Net cash provided by operating activities
158,074

 
166,873

Cash Flows from Investing Activities:
 
 
 
Purchases of marketable securities
(38,693
)
 
(39,794
)
Proceeds from sale of marketable securities
37,007

 
30,045

Purchases of property and equipment, net
(54,187
)
 
(48,530
)
Net cash used in investing activities
(55,873
)
 
(58,279
)
Cash Flows from Financing Activities:
 
 
 
Proceeds from borrowings
61,250

 
—

Payments on borrowings
(72,500
)
 
(16,250
)
Proceeds from issuance of common stock
1,548

 
2,127

Dividends paid
(43,208
)
 
(42,516
)
Repurchase of common stock
(81,052
)
 
(27,398
)
Payments of tax withholdings related to share-based awards
(3,715
)
 
(6,740
)
Net cash used in financing activities
(137,677
)
 
(90,777
)
Effects of exchange rate changes on cash and cash equivalents
(467
)
 
119

Net (decrease) increase in cash and cash equivalents
(35,943
)
 
17,936

Cash and Cash Equivalents, Beginning of period
160,071

 
142,135

Cash and Cash Equivalents, End of period
$
124,128

 
$
160,071


Page 8




Supplemental Detail on Net Income Per Share Calculation

In accordance with 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 earnings per common share pursuant to the “two-class” method. For the Company, participating securities are composed entirely of unvested restricted stock awards and performance-based restricted stock units (“PSUs”) that have met their relevant performance criteria.

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 stock options, PSUs and restricted stock units. For the thirteen and fifty-two weeks ended February 2, 2019 and fourteen and fifty-three weeks ended February 3, 2018 , potential common shares were excluded from the computation of diluted income per common share to the extent they were antidilutive.

The following unaudited table sets forth the computation of basic and diluted income per common share shown on the face of the accompanying condensed consolidated statements of income (in thousands, except per share amounts):

 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
February 2, 2019
 
February 3, 2018
 
February 2, 2019
 
February 3, 2018
Numerator
 
 
 
 
 
 
 
 
Net (loss) income
 
$
(16,640
)
 
$
27,975

 
$
35,613

 
$
101,000

Net income and dividends declared allocated to participating securities
 
—

 
(617
)
 
(879
)
 
(2,300
)
Net (loss) income available to common shareholders
 
$
(16,640
)
 
$
27,358

 
$
34,734

 
$
98,700

Denominator
 
 
 
 
 
 
 
 
Weighted average common shares outstanding – basic
 
118,440

 
124,747

 
122,662

 
125,341

Dilutive effect of non-participating securities
 
—

 
61

 
67

 
62

Weighted average common and common equivalent shares outstanding – diluted
 
118,440

 
124,808

 
122,729

 
125,403

Net (loss) income per common share:
 
 
 
 
 
 
 
 
Basic
 
$
(0.14
)
 
$
0.22

 
$
0.28

 
$
0.79

Diluted
 
$
(0.14
)
 
$
0.22

 
$
0.28

 
$
0.79

(1)  Due to the differences between quarterly and year-to-date weighted average share counts and the effect of quarterly rounding to the nearest cent per diluted share, the year-to-date calculation of generally accepted accounting principles ("GAAP") diluted income per common share may not equal the sum of the quarters.


Page 9





GAAP to Non-GAAP Reconciliation of Net Income (Loss) and Diluted Income (Loss) Per Common Share

The Company reports information in accordance with GAAP. The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Further, the non-GAAP measures utilized by the Company may be unique to the Company, as they may be different from non-GAAP measures used by other companies. The Company believes presenting these non-GAAP measures, which exclude items that are not comparable from period to period, is useful to investors and others in evaluating the Company’s ongoing operating and financial results in a manner that is consistent with management’s evaluation of business performance and understanding how such results compare with the Company’s historical performance. The reconciliation below excludes the impact of the Company’s retail fleet optimization plan announced in the fourth quarter, the Tax Act, the 53rd week in fiscal 2017 and hurricanes Harvey, Irma and Maria (collectively, “Hurricanes”) in fiscal 2017.

A reconciliation of net (loss) income and diluted (loss) income per share on a GAAP basis to net (loss) income and diluted (loss) income per share on a non-GAAP basis for the thirteen weeks and fifty-two weeks ended February 2, 2019 and fourteen and fifty-three weeks ended February 3, 2018 is presented in the table below:
Chico’s FAS, Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliation of Net Income (Loss) and Diluted Income (Loss) per Common Share
(Unaudited)
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
February 2, 2019
 
February 3, 2018
 
February 2, 2019
 
February 3, 2018
Net (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP basis
 
$
(16,640
)
 
$
27,975

 
$
35,613

 
$
101,000

Impairment, net of tax (1)
 
7,123

 
—

 
7,123

 
—

Accelerated depreciation, net of tax (1)   (2)
 
957

 
—

 
957

 
—

Tax Act
 
—

 
(9,710
)
 
(4,869
)
 
(9,710
)
53 rd  week in fiscal 2017, net of tax
 
—

 
(3,805
)
 
—

 
(3,805
)
Hurricanes, net of tax
 
—

 
—

 
—

 
5,183

Non-GAAP adjusted basis
 
$
(8,560
)
 
$
14,460

 
$
38,824

 
$
92,668

 
 
 
 
 
 
 
 
 
Net (loss) income per common and common equivalent share–diluted:
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP basis
 
$
(0.14
)
 
$
0.22

 
$
0.28

 
$
0.79

Impairment, net of tax (1)
 
0.06

 
—

 
0.06

 
—

Accelerated depreciation, net of tax (1)   (2)
 
0.01

 
—

 
0.01

 
—

Tax Act
 
—

 
(0.08
)
 
(0.04
)
 
(0.08
)
53 rd  week in fiscal 2017, net of tax
 
—

 
(0.03
)
 
—

 
(0.03
)
Hurricanes, net of tax
 
—

 
—

 
—

 
0.04

Non-GAAP adjusted basis
 
$
(0.07
)
 
$
0.11

 
$
0.31

 
$
0.72

(1) Adjustments for impairment and accelerated depreciation charges reflect the impact of incremental store closures included in the Company’s retail fleet optimization plan. On a pre-tax basis, impairment and accelerated depreciation charges were $9.4 million and $1.3 million , respectively, for the fourth quarter and fiscal 2018 .
(2) Accelerated depreciation represents incremental depreciation as a result of the retail fleet optimization plan.

Page 10




GAAP to Non-GAAP Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

As noted above, the Company reports information in accordance with GAAP. The Company's management does not, nor does it suggest that investors should, consider non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
    
Free cash flow is a non-GAAP financial measure which the Company defines as net cash provided by operating activities less purchases of property and equipment. We believe free cash flow, when used in conjunction with GAAP measures, provides investors with a meaningful analysis of our ability to generate cash for discretionary and non-discretionary items after deducting purchases of property and equipment.

Free cash flow is not a measure of financial performance under GAAP and should be considered in addition to, and not as a substitute for, operating cash flows or other financial measures prepared in accordance with GAAP. Our method of determining non-GAAP financial measures may differ from other companies’ methods and therefore may not be comparable to those used by other companies.

A reconciliation of net cash provided by operating activities on a GAAP basis to free cash flow on a non-GAAP basis for the fifty-two weeks ended February 2, 2019 is presented in the table below:


Chico’s FAS, Inc. and Subsidiaries
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
(in thousands)
 
 
 
 
 
Fifty-Two Weeks Ended
 
 
February 2, 2019
Net cash provided by operating activities
 
$
158,074

Less: Purchases of property and equipment, net
 
(54,187
)
Free cash flow
 
$
103,887




Page 11



Chico's FAS, Inc. and Subsidiaries
Store Count and Square Footage
Thirteen Weeks Ended February 2, 2019
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
November 3, 2018
 
New Stores
 
Closures
 
February 2, 2019
 
 
Store count:
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
555

 
—

 
(4
)
 
551

 
 
Chico’s outlets
124

 
1

 
—

 
125

 
 
Chico's Canada
4

 
—

 
—

 
4

 
 
WHBM frontline boutiques
394

 
—

 
(4
)
 
390

 
 
WHBM outlets
67

 
—

 
(2
)
 
65

 
 
WHBM Canada
6

 
—

 
—

 
6

 
 
Soma frontline boutiques
262

 
—

 
(4
)
 
258

 
 
Soma outlets
19

 
—

 
—

 
19

 
 
Total Chico’s FAS, Inc.
1,431

 
1

 
(14
)
 
1,418

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
November 3, 2018
 
New Stores
 
Closures
 
Other changes in SSF
 
February 2, 2019
Net selling square footage (SSF):
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
1,511,661

 
—

 
(8,248
)
 
(725
)
 
1,502,688

Chico’s outlets
313,464

 
2,422

 
—

 
(486
)
 
315,400

Chico's Canada
9,695

 
—

 
—

 
—

 
9,695

WHBM frontline boutiques
918,045

 
—

 
(8,196
)
 
—

 
909,849

WHBM outlets
140,678

 
—

 
(4,815
)
 
—

 
135,863

WHBM Canada
14,891

 
—

 
—

 
—

 
14,891

Soma frontline boutiques
496,273

 
—

 
(7,127
)
 
(637
)
 
488,509

Soma outlets
35,774

 
—

 
—

 
—

 
35,774

Total Chico’s FAS, Inc.
3,440,481

 
2,422

 
(28,386
)
 
(1,848
)
 
3,412,669


As of February 2, 2019 , the Company also sold merchandise through 83 international franchise locations.

Page 12




Chico's FAS, Inc. and Subsidiaries
Store Count and Square Footage
Fifty-Two Weeks Ended February 2, 2019
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
February 3, 2018
 
New Stores
 
Closures
 
February 2, 2019
 
 
Store count:
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
568

 
—

 
(17
)
 
551

 
 
Chico’s outlets
120

 
5

 
—

 
125

 
 
Chico's Canada
4

 
—

 
—

 
4

 
 
WHBM frontline boutiques
404

 
—

 
(14
)
 
390

 
 
WHBM outlets
69

 
—

 
(4
)
 
65

 
 
WHBM Canada
6

 
—

 
—

 
6

 
 
Soma frontline boutiques
270

 
—

 
(12
)
 
258

 
 
Soma outlets
19

 
—

 
—

 
19

 
 
Total Chico’s FAS, Inc.
1,460

 
5

 
(47
)
 
1,418

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
February 3, 2018
 
New Stores
 
Closures
 
Other changes in SSF
 
February 2, 2019
Net selling square footage (SSF):
 
 
 
 
 
 
 
 
 
Chico’s frontline boutiques
1,555,671

 
—

 
(44,289
)
 
(8,694
)
 
1,502,688

Chico’s outlets
302,088

 
13,217

 
—

 
95

 
315,400

Chico's Canada
9,695

 
—

 
—

 
—

 
9,695

WHBM frontline boutiques
939,606

 
—

 
(30,427
)
 
670

 
909,849

WHBM outlets
143,963

 
—

 
(8,429
)
 
329

 
135,863

WHBM Canada
14,891

 
—

 
—

 
—

 
14,891

Soma frontline boutiques
511,989

 
—

 
(22,873
)
 
(607
)
 
488,509

Soma outlets
35,541

 
—

 
—

 
233

 
35,774

Total Chico’s FAS, Inc.
3,513,444

 
13,217

 
(106,018
)
 
(7,974
)
 
3,412,669


As of February 2, 2019 , the Company also sold merchandise through 83 international franchise locations.



Page 13

Exhibit 99.2

CHSANNOUNCESKARENMCKI_IMAGE1.JPG

Chico’s FAS, Inc. Appoints Karen McKibbin President of Chico’s Brand

Fashion Retail Veteran Brings Strong Track Record of Driving Growth

Fort Myers, FL – March 6, 2019 – Chico's FAS, Inc. (NYSE: CHS) (the “Company”) announced today that fashion retail veteran Karen McKibbin has been appointed President of its Chico’s brand, effective April 1, 2019. In this role, Ms. McKibbin will oversee all business activities for Chico’s and will report directly to Shelley Broader, Chief Executive Officer and President of the Company.

Ms. McKibbin joins Chico’s after a successful career with Nordstrom, Inc. She most recently served as President of Nordstrom Rack, the Company’s fastest growing brand, with a fleet of 244 stores and a separate off-price merchant organization. Prior to that role, she was President of Nordstrom Canada and led the Company’s successful expansion into the Canadian market, overseeing buying, logistics, marketing, real estate and online strategies. Previously at Nordstrom, she served as Vice President and led four different regions for the Company.

Ms. Broader said, "We are pleased to welcome Karen as Chico’s Brand President. Karen has extensive experience in the retail industry with our customer and a strong record leading merchandising, operating and store initiatives that drive profitable growth. She shares our commitment to beautiful product, superior customer experiences and knows first-hand how important service is to building brand loyalty. I am confident that her leadership and decades of experience will help accelerate the progress we are making to improve performance at the Chico’s brand.”

Ms. McKibbin said, “It is an honor to be named President of the Chico’s brand. I am enthusiastic about the opportunities that lie ahead for Chico’s and look forward to working with its talented team to improve the brand, deepen our customer relationships and deliver long-term growth.”




Prior to serving as President of Nordstrom Canada, Ms. McKibbin served in a wide variety of roles from merchant to store management to regional management. I n 2000, she was named Vice President, leading the Los Angeles region. She later led three additional regions as Vice President, including the Northeast region, where she pioneered Nordstrom’s entry into the Boston market; the South region and Northern California and Hawaii.

Ms. McKibbin received her Bachelor of Arts degree from University of California, San Diego.

About Chico’s
Chico’s® was founded in 1983 as a small boutique selling Mexican folk art on Sanibel Island in Florida. The rich colors, bold prints, unique artisanal details, problem-solving styles, and amazing personal service made a lasting connection with customers. Now, there are over 600 Chico’s boutiques and outlets nationwide, an international (franchise) partner, a monthly mailer, and online shopping available at chicos.com and chicosofftherack.com. 

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 February 2, 2019, the Company operated 1,418 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 release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements, including without limitation the statements in Ms. Broader’s and Ms. McKibbin’s quotes, relate to, among other things, expectations, estimates and projections regarding the brand’s new leadership and initiatives and are identified by use of the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “outlook,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” “potential” and similar terms. Factors that could cause actual results to differ include, but are not limited to: the extent of the market demand and overall level of spending for women’s private branded clothing and related accessories; the effectiveness of our brand awareness and marketing programs; the ability to successfully execute and achieve the expected results of our business strategies and particular strategic initiatives (including, but not limited to, the Company’s retail fleet optimization plan, Chico’s brand improvement plan and expanded review of the Company’s operations); and the risk that our investments in merchandise or marketing initiatives may not deliver the results we anticipate. Other risk factors for the Chico’s FAS, Inc.’s business are detailed from time to time in the Chico’s FAS, Inc.’s Quarterly Reports on Form 10-Q, Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. These factors should be considered in evaluating forward‑looking statements contained herein.





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


Exhibit 99.3



FY19Q1CASHDIVIDENDDEC_IMAGE1.JPG

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

                                        
   
Chico's FAS, Inc. Declares Cash Dividend of $0.0875 Per Share

Fort Myers, FL - February 28, 2019 - Chico’s FAS, Inc. (NYSE: CHS) (the “Company”) today announced that its Board of Directors declared a quarterly cash dividend of $0.0875 per share of its common stock, a 3% increase over the March 2018 dividend rate. This represents the ninth annual increase since the dividend was established in 2010. The dividend is payable on April 1, 2019 to the Company’s shareholders of record at the close of business on March 18, 2019.


ABOUT CHICO’S FAS, INC.

The Company, through its brands - Chico's, White House Black Market and Soma is a leading omni-channel specialty retailer of women's private branded, sophisticated, casual-to-dressy clothing, intimates and complementary accessories.

As of November 3, 2019, 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.


Executive Contact:                            
Julie Lorigan
Vice President – Investor Relations,
Public Relations and Corporate Communications
Chico’s FAS, Inc.
(239) 346-4199

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