http://www.morningstar.com/earnings/45474202-chicos-fas-inc-chs-q3-2012.aspx

Chico's FAS, Inc. CHS
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/20/2012

Operator: Good morning and welcome to the Chico's FAS, Inc.'s Third Quarter Sales and Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

It is now my pleasure to introduce your host Todd Vogensen, Vice President of Investor Relations. Mr. Vogensen, please go ahead.

Todd Vogensen - VP - Investor Relations: Thanks Emily and good morning everyone. Welcome to the Chico's FAS third quarter earnings conference call and webcast. Joining me today at our National Store Support Center in Fort Meyers are David Dyer, our CEO; and Pam Knous, CFO; Cynthia Murray, Chico's Brand president; Donna M, White House Black Market Brand President; Laurie Van Brunt, Soma Brand President; and Sheryl Clark, Boston Proper Brand President.

Before Dave begins his executive overview, we would like to remind you that our discussions this morning includes forward-looking statements and quarter to-date data points, which are subject to and protected by the Safe Harbor statement found in our SEC filings and in today's earnings release. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ materially. 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 by such statements will not be realized.

With that, I will turn it over to Dave.

David F. Dyer - President and CEO: Great. Thank you, Todd and good morning everyone. It's a beautiful day in Fort Meyers. I am pleased to announce our strong third quarter results. We delivered record third quarter sales and the highest third quarter earnings per share in six years. We planned for a strong performance in the third quarter and we more than delivered.

Earnings per share up 39%, comparable sales up 9.9%, gross margin up by 120 basis points, SG&A leverage of 60 basis points, and inventories down 5%. Our strong comparable sales increase and profitability point to the strength of our business. Overall our unique leading edge fashion and innovative marketing continued to drive significant achievements including a double-digit increase in new customers and increases in both average dollar sales and transactions. These results mark our 14th consecutive quarter of comparable sales increases and the 15th consecutive quarter of double-digit earnings per share growth, demonstrating a consistent level of strong performance. I was especially pleased with the level of merchandise innovation that we delivered this quarter. As you'll hear in a few minutes, each brand is clearly differentiating itself through creative and unique merchandise.

Chico's with the So Slimming jeans, White House | Black Market with the Work Kit. Soma with the Sensuous Sides and Embraceable Bra launches and Boston Proper with All the Right Curves denim and repositions (cheek) lines. Our trend-right fashion also drove exceptional new store performance. The Company has opened 111 new stores to-date this year including 29 outlets and overall new stores are beating our sales expectation and performance.

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