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Final=combined analyst presentation
- 1. WELCOME TO CHICO’SFAS 2014 ANALYST EVENT
- 2. Safe Harbor Statement Ourdiscussionthismorningincludesforward- lookingstatementswhicharesubjecttoandprotectedbytheSafeHarborstatement.Theseforwardlookingstatementsaresubjecttoanumberoffactorsanduncertaintiesthatcouldcauseactualresultstodiffermaterially.Thecompanydoesnotundertaketopubliclyupdateorreviseitsforward- lookingstatements,evenifexperienceorfuturechangesmakeitclearthatprojectedresults, expressed,orimpliedbysuchstatements,willnotberealized.
- 3. Chico’s FAS Management •Dave Dyer, CEO •Cinny Murray, Chico’s Brand President •Donna Noce, White House | Black Market’s Brand President •Todd Vogensen, CFO •Jeff Gaul, SVP Real Estate •Bill Bine, VP International Operations
- 4. Agenda •Prepared Remarks –Dave Dyer, Cinny Murray, Donna Noce, Todd Vogensen •Opportunity for Q&A •Depart for YorkdaleWH|BM –Refreshment station / Boxed lunch •YorkdaleWH|BM tour •Jeff Gaul presents on bus ride from Yorkdaleto Square One •Square One Chico’s tour •Depart for Airport
- 5. Chico’s FASWell Positionedfor Long-term •Loyal Customer Base •Omni-channel Capabilities •Merchandise Extensions
- 6. Analyst Meeting September2014 Dave Dyer, CEO
- 7. Chico’s FAS isa cultivator of brands serving the lifestyle needs of fashion-savvy women 35 years and older.
- 8. Chico’s FAS FY2014 YTD Financial Performance
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- 10. Phases of Omni-channelInvestment 1.Infrastructure 2.Store Technology 3.Customer Engagement
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- 14. Store Technology CashWrap Point of Sale
- 15. Store Technology iPad–Customer Book Application
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- 17. Store Technology DigitalSignage
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- 23. Analyst Meeting September2014 CinnyMurray Chico’s Brand President As of: 9/12/2014 1:29 PM
- 24. Opening 1 Goodmorning: Today I am going to cover 3 key points: 1. Update on our business YTD. 2. Share my thoughts on the changing landscape for an apparel shopper. 3. Growth plans for the Chico's Brand.
- 25. Our Mission Chico'scelebrates women who love to express their unique style, and inspires them to feel confident and beautiful through exceptional personal service and expert style advice. 2
- 26. Our Business 2014Results: •Flat comp •Profitable business model that generates strong cash flow •Customer browse space shifted •Future Growth Strategies Product launches Coordinated future touch points between digital, stores and tablets International 3
- 27. New Category: Retreat •Extension to Zenergyfranchise •Spring 2014 launched 229 stores •Fall 2014 in 478 stores •Addresses customer lifestyle shift 4
- 28. New Category: Shoes •Online initiative •Testing in 25 boutiques Fall 2014 •Future growth from iPad selling 5
- 29. New Category: Golf •Extension to Zenergyfranchise •400 stores •Completed first tournament sponsorship, Patty Berg Memorial •Leverage TV for new customer acquisition 6
- 30. New Category: Swim •Online initiative •Swim –80% •Cover-ups –20% •Future growth from iPad selling 7
- 31. New Category: Petites •Online initiative •Offered in 18% of missy styles •Strength is in bottoms •Testing in Canada 8
- 32. New Category: TheKnit Kit •Introduced in all boutiques Spring 2014 •Addressed options for working customers •Will be expanded in Spring 2015 9
- 33. What’s Working: Pants •Growing “So Slimming” Franchise •Expanded to “So Lifting”, currently in both pants and denim •Two TV spots for 2014 Legging Knit pants 10
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- 35. Our Marketing -Leggings Needs Update 12
- 36. What’s Working: WovenTops •Strongest Spring business •Double-digit comp •Driven by Basics Fashion Print 13
- 37. What’s Working: KnitTops •Strong Spring 2014 business •Drove mid-single digit comp •Working Prints Fashion Updated basics 14
- 38. Key Initiative ForFall: Jackets •Focus: Fall 2014 Statement Jackets Pieced Duster Print Vests 15
- 39. Our Marketing –StatementJackets Needs Update 16
- 40. Key Initiative ForFall: Sweaters •Key category for Fall •Focus Novelty Fashion Gift giving 17
- 41. 18 Chico’s CustomerPerformance •Customer file is at an all time high •Growth is being generated in all customer segments –Existing customers high-single digit –Reactivated high-single digit –New mid-single digit •Chico’s customers remain the most loyal and engaged in the industry –Retention rate industry leading –Outside research results showed we are an industry leader •Coordinated efforts between selling channels and iPad to strengthen customer relationships and drive sales
- 42. Our Marketing •360approach •Customer strategy Targeted and customized communication Data and analytics play a major role Increase digital/social investment Expand brand awareness though TV, which now includes Hispanic and golf Strengthen lifestyle connection through travel Established initiatives to increase outreach and localization efforts Direct Mail Advertising Social Public Relations Events/ Launches Customer Referrals Outreach 19
- 43. Our Operational Focus:iPad •Convert paper customer books to digital format •Drive incremental appointment sales and ADS by expanding associates visibility of customer’s category of loyalty •Drive incremental volume by introducing the full breadth of assortment on Chicos.com •Utilize Chicos.com to personalize the sale through use of web features such as ratings and reviews, product videos and on-figure photos •Utilize Gmail to build customer relationships and support personalization 20
- 44. Our Operational Focus:iPad 21
- 45. International: Mexico ScreenShot 23 Store Details: 2 stores 6 shop in shops Mexico City and Villahermosa New store design 22 Shop in Shop Boutique
- 46. International: Ontario StoreOpenings: Square One: August 22 Upper Canada: August 26 Mapleview: August 29 Launch Outlets: March 2015 23
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- 48. Inspires women toembrace femininity as a source of strength Analyst Meeting September 2014 Donna Noce, WH|BM Brand President
- 49. WH|BM Brand Growth WH|BM Sales have grown at a 4 year compound annual growth rate (CAGR) of 13%, driven by strong growth across all channels (Comp Sales CAGR +7%) Growth has been fueled by 3 primary levers: 1)Comp store growth through new business franchises: Workkit (2012), Instantly Slimming (2013), Perfect Form (2013) 2)Omni channel growth fueled through new customer acquisition and online exclusives 3)Store Openings (131 total: 93 Frontline, 38 Outlet) $591M $697M $811M $859M 400 450 500 550 600 650 700 750 800 850 900 2010 2011 2012 2013
- 50. 2014 & Beyond WH|BM continues to focus on growth as we move into the Fall season 2014 YTD Performance Recap: WHBM comps have been pressured, but improved Q1 into Q2 Re-launch of Loyalty program has been well received by our customer; wins include migration into top tier, retention rates holding steady, and improved new customer assimilation Customer file is at an all time high and retention and reactivation rates have been increasing Brand Goals: Attract new customers through expanded lifestyle offerings and relevant marketing and promotional cadence Retain loyal customers and increase the share of wallet Focus on the Omni customer experience International growth
- 51. Merchandise Initiatives Merchandisefocus will be on a more diversified price architecture, continued expansion of lifestyle, and innovative franchises
- 52. Diversifying Price Architecture Lux Price Point is our highest price point focused on delivering couture / aspirational collections Best Price Point delivers couture like details at our historic price point Better Price Point is our mid tier price point focused on delivering unique details at a great value Good Price Point is our entry price point focused on delivering key foundational categories at an amazing value Lux Best Better Good Our expanding breadth of lifestyle has allowed us to reach a broader customer base leading to a more diversified price architecture Spring 2014 was underpenetrated in the entry and mid tier price points. The brand is positioned with a balanced mix of good, better, best and lux
- 53. Lifestyle Evolution 2010 2011 2012 2013 2014 Occasion Destination •Polished Casual •Sportswear Introduction Launch of WorkKit Introduction of Proprietary Franchises: •Perfect Form •Instantly Slimming Expand Portfolio of Brand Franchises: •St Honore Denim •Iconic Collection •Genius Dress
- 54. Lifestyle Evolution WHBMhas migrated from an occasion destination in 2010 to a multi-channel, multi faceted, international lifestyle brand
- 55. Workkit Launched in2012 Diversified product assortment that is relevant from the classroom to the boardroom Now the most recognized brand franchise
- 56. New Dresses Omnichannel effort to gain market share and become the go to destination for dresses Online exclusives offer her 65% more options from casual to formal occasion Diversified the assortment with range of price points and lifestyle options Innovative Technology (Genius & Instantly Slimming)
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- 58. St Honore -Denim Launched the new franchise in Spring 2014 Highly successful launch and continuing success into Fall New fabrics, washes, and details Expanded fashion silhouettes Diverse price architecture starting at $78
- 59. Iconic Collection LaunchedFall 2014 Strong branding franchises Both categories showing strong positive comp growth
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- 62. Legging Studio Fall2014 Campaign Reinforces the breadth of lifestyle and captures the “long over lean” trend of the fall season
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- 64. Outerwear Fashion inner/outerwearassortment Range of lifestyles and price points New & Growing business Category builds into Q4 Expanded in line assortment
- 65. Shoes & Accessories Elevating the details and quality Focused on collections that complete the outfit Fall investment in expanded boot assortment Online exclusives
- 66. Petites Launched smallassortment of work in Spring 2013 2014 expanded the offering to 40% of the collection Highly successful in acquiring new customers Continuing to grow assortment in 2015
- 67. Our Customer Thecustomer file is at an all time high, growing by ~50% over the last 4 years Customer growth is being generated in all customer segments, with material YTD gains in our most valuable segments The re-launch of the WH|BM loyalty program is driving increased engagement and spend in our best customer segment We continue to leverage our data in new ways to refine our targeting and communication with the end goal of increasing our relevancy The importance of our multi channel customer continues to increase as we strive to deliver a seamless customer experience irrespective of how, when, or where she shops us
- 68. The Experience Astechnology becomes an increasingly important part of our customers life, we continue to evolve the customer experience through the enhancement of our website and advances in in-store technology
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- 75. The Experience Beyondtechnology –the strength of brick and mortar continues to evolve Relevance to geographic location, local communities, and the customer preference. STOREFRONT RESORTCONCEPT-SANTAMONICA, CA
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- 78. Marketing The WH|BMmarketing approach is evolving to break through the every day clutter, reaching our customer in a more relevant and targeted way Direct Mail segmentation to speak to our customers in the most effective manner possible based on customer level insights gained from big data Leverage TV to drive customer awareness and engagement by highlighting the breadth of our assortment and the launch of new collections: Testing regional intensification Testing Hispanic television Digital marketing and social media continues to increase in importance and our penetration of spend continues to increase accordingly Migrate single channel customers to multi channel customers
- 79. International WH|BM Internationalperformance continues to exceed our expectations as we look to expand our store base beyond the Toronto market Brand awareness has been strong with many of the customers having shopped the brand previously, and we are generating new customer growth as well with 2/3rds of customers new to the file. Product offering has been well received with strong parallels to the customer shopping patterns experienced in the US We are very proud to bring our Award winning store design to the Canadian market
- 80. Wrap Up WH|BMis well positioned to gain increasing market share as we focus on delivering: Incremental new customers through expanding and balancing the price architecture and launching new collections that serve her different lifestyle needs Increased loyalty and share of wallet for our existing and best customer segments A seamless and relevant omnichannel approach that surpasses our customers needs/expectations International Growth
- 81. Analyst Meeting September2014 Todd Vogensen, CFO
- 82. Three Things 1.OurCustomers 2.Our Use of Cash 3.Return To Double-Digit Operating Income
- 83. Customers 2010 2011 2012 2013 +10% CAGR
- 84. Social Interactions Facebookfans 2.9 million Twitter followers Up +200% Pinterest Most widely utilized social sharing button
- 85. Cross-Channel Purchasing AverageAnnual Spend Per Customer Store-Only Multi-Channel Online-Only 5X 2.5X
- 86. 86 Source: USCensus Bureau Age 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 10-14' 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 2010 2020 E* 2010 = 31M 2020 = 31M 2010 = 52M 2020 = 52M 2010 = 37M 2020 = 42M US Female Population (in 000’s) Boomer Consumer
- 87. Balance Sheet Health No Debt Over $208 Million In Cash
- 88. Investment Philosophy •Long-termgrowth is the priority •Capital expenditures in-line with depreciation •Invest in Omni-channel •Moderated store openings •Return excess cash to shareholders
- 89. Dividends and ShareRepurchases Repurchases $567 million Dividends $145 million Since 2010 $712 million Remaining Authorized Repurchases $290 million Over 117% of free cash flow
- 90. Path to Double-DigitOperating Income 6.6% 10%+ 2.0-2.5% 0.25-0.5% 1.5-2.0% R12Q2'14 GrossMargin SG&A GrowthBrands DoubleDigit +
- 91. Chico’s FASWell Positionedfor Long-term •Loyal Customer Base •Omni-channel Capabilities •Merchandise Extensions
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