Event Brief of Q2 2003 Chico`s FAS Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. James Palczynski, Integrated Corporate Relations, Inc., Principal

. Scott Edmonds, Chico's FAS, Inc., President/COO & Assistant Secretary . Marvin Gralnick, Chico's FAS, Inc., Founder, Chairman of the Board, CEO, & Director . Helene Gralnick, Chico's FAS, Inc., Founder, SVP-Design and Concept, & Director . Charlie Kleman, Chico's FAS, Inc., CFO, EVP-Finance, Secretary/Treasurer, & Director

. Jim Frain, Chico's FAS, Inc., SVP, Marketing . Pat Murphy, Chico's FAS, Inc., EVP & Chief Merchandise Officer . Michael Kincaid, Chico's FAS, Inc., VP, Finance

OVERVIEW

CHS reported a record-breaking 2Q03 with the highest same store sales results of 14.6% since 3Q02. EPS for 2Q03 was $0.28. Q&A Focus: Pazo, White House/Black Market acquisition, avg. selling price, intimate products, fall mix, inventory, SG&A, and Chico's business.

FINANCIAL DATA

A. Key Data From Call 1. Operating margins were 22.6% for 2Q03. 2. Free cash flow was in excess of $22m for 2Q03.

PRESENTATION SUMMARY

S1. Opening Comments (S.E.) 1. Operational Highlights: 1. During 2Q03, CHS saw record financial results for sales and profitability.

2. The co.'s sales were driven by combination of new stores and

acceleration in comps to 14.6%, and excellent results from the

catalog and Internet division. 3. CHS opened nine new stores during 2Q03 and continue to be on track to fulfill the target of 70-75 new stores for FY. 4. Operating margin at 22.6% is the highest CHS ever reported for 2Q and for the first time has exceeded its 1Q. 5. Net income was up nearly 50%. 6. EPS of $0.28 was greatly improved vs. the year ago level of $0.19, and better than the most recent consensus estimate of $0.26.

7. Key Points of the White House, Inc. Transaction: 1. CHS has now cleared the Hart-Scott-Rodino Premerger act, and are moving toward a closing sometime in mid-September. 2. Once the transaction is closed, the co. will move quickly to capitalize upon many of the synergies such as distribution center, marketing, real estate, construction, human resources, and benefits. 3. CHS intends to keep the White House merchandise team totally separate from itself. 8. Importance of the White House Deal: 1. It alleviates the pressure to incubate Pazo. 1. If CHS decides not to go forward with the Pazo concept, it

will not have detrimental effect on the co.'s growth prospects for either the short or long term. 2. The co. also does not anticipate any material impact to the P&L if it were to discontinue Pazo.

2. The deal adds a second proven growth vehicle that will allow

CHS to proceed slowly and purposefully with its test of intimate apparel. 3. It removes the pressure on the Chico's concept to be the co.'s primary growth vehicle. 1. CHS believes that this will ultimately enable it to achieve the earnings growth targets with a modest level of square footage growth.

S2. Merchandising (P.M.) 1. Details: 1. From the strong comparable store sales that were seen over the course of the last few months, the co.'s assortment at Chico's has performed really well.

2. The inventory levels, which were at the high end of the co.'s

plan at the close of 1Q03, are now more in the mid range of

its plan. 3. The co. also concentrated this year only on wear-now clothes that would take the customer into early fall.

1. The colors were upbeat and the clothes were lightweight with

short-sleeved tops and skirts performing better than planned.

4. CHS also concentrated on its Travelers collection in black

providing new silhouettes. 1. This resulted in strong sales for all three months. 2. Novelty and color in Travelers also gained ground, giving the co. a stronger margin for the period.

5. Other upsides to 2Q03 were jewelry and scarves, chains,

novelty jackets, lightweight sweaters, and early strong suede

jackets selling in July. 6. Sales merchandise turned very well and overall markdowns were less than last year for the same quarter by almost 5%. 1. Sales on regular priced merchandise were surprisingly strong even in the month of July. 7. Margins were up in June and up strongly in July. 8. Accessories continue to be particularly strong and CHS sees that business strengthening in impact to the total as it moves towards 4Q03. 9. The September catalog looks very exciting and it just might be the co.'s best efforts ever. 1. This piece is already beginning to hit homes this week along with fresh new product for the month.

10. Last week, CHS had teams in India and in China simultaneously

developing innovative …