David Dyer – President, Chief Executive Officer Pamela Knous – Chief Financial Officer Todd Vogensen – Vice President, Investor Relations

Adrienne Tennant – Janney Capital Markets Robin Murchison – SunTrust Neely Tamminga – Piper Jaffray Dana Telsey – Telsey Advisory Group Betty Chen – Wedbush Securities Paul Alexander – Bank of America Merrill Lynch Samantha Shapiro – Stifel Nicolaus Margaret Whitfield – Sterne Agee Jennifer Black – Jennifer Black & Associates Marni Shapiro – The Retail Tracker Brian Tunick – JP Morgan

Good morning and welcome to Chico’s FAS Inc.’s Second Quarter Sales and Earnings conference call. At this time, all participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. A brief question and answer session will follow the formal presentation. It is now my pleasure to introduce your host, Todd Vogensen. Mr. Vogensen, you may begin.

Thank you Valerie, and good morning everyone. Welcome to the Chico’s FAS Second Quarter Earnings conference call and webcast. David Dyer, CEO and Pam Knous, CFO are here with me at our national store support center in Fort Myers. Before Dave begins his executive overview, we would like to remind you that our discussion this morning includes forward-looking statements 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. And with that, I will turn it over to Dave.

Great. Thanks Todd and good morning everyone. I’m delighted to announce our terrific second quarter results. We delivered record second quarter sales and the highest second quarter earnings per share in the Company’s history. All in all, we beat our expectations for the quarter. Earnings per share – up 28% on top of a 47% increase last year. Comparable sales – up 5.6% for a two-year stack of 18.4%. Gross margin – up 30 basis points on top of 40 basis points last year. SG&A – leverage of 60 basis points on top of 190 basis point leverage last year, and inventories down 6%, excluding Boston Proper. Our unique trend right merchandise and innovative marketing drove significant achievements in the second quarter, including a double-digit increase in new customers, a higher penetration of full-price sales, and increases in both average dollar sales and transactions. These results demonstrate superb team execution. We delivered another quarter of strong growth in 2012 against our toughest quarterly comparison from last year in a much more challenging economic environment. After adding up the record results for both first and second quarters, I’m pleased to see that we’re updating our planning assumptions for fiscal 2012, which Pam will review with you shortly. Today with these consolidated results as a backdrop, I’d like to take just a few minutes to highlights our successes by brand. Let’s start with Chico’s Soma. Comparable sales performance increased 7.2% on top of 11.9% last year for one of the industry’s leading two-year stacks of 19%. Turning to Chico’s, we’re clearly winning with color, print and pattern. Our compelling trend right merchandise drove strong sales and gross margin conversion as we successfully cycled last year’s results. Despite this year’s more promotional competitive environment, Chico’s experienced strong full-price selling. This trend right product also drove exceptional new store performance. Chico’s has opened 13 new stores this year, including six outlets, and overall we’re meeting or beating our sales expectations. Product-wise, I will add that we’re very excited about the sale potential of our So Slimming technology introduced last fall. Our So Slimming jeans have been such a huge success that we’ve already expanded the So Slimming line to additional bottoms in our fall collections. Congratulations to Cindy Murray and her team for this great quarter. White House Black Market’s momentum continued in the second quarter with a 2.3% comparable sales increase on top of a 14.9% last year, for at two-year stack of 17.2% and a three-year stack of 30%. This is truly one of the best performances in specialty retail. Our second quarter total sales are up 9.8% for White House, reflecting 39 new stores this year over year as we accelerate our capital investment in this brand. As we have discussed in our planning assumptions, we knew it would be a challenge to cycle last year due to the launch of the work kit and the polished casual assortment which drove 14.9% comparable sales increase in 2011, and we are pleased with our results in this quarter. As I mentioned on our first quarter call, we entered the second quarter for White House Black Market a bit lean in inventory, having delivered above-plan total sales performance of 18.2% in the first quarter. We opened 31 stores to date this year, including 10 outlets. These new stores are exceeding our sales expectations and were our first priority as we allocated total inventory since first year sales are a major indicator of the long-term success for a given location. So in all likelihood, we left more than a few comparable sales dollars on the table. As I have previously stated, that’s a good problem to have and I’m pleased at how well our assortments continue to resonate with new and existing White House Black Market customers. On a final product note for White House Black Market, we have just launched a redesign of our shoe line to further round out our lifestyle offerings. In addition to the upgrade in design and style, we have also upgraded the quality and fit of our shoes. I’m pleased to report positive initial response from our customers. Congratulations to brand president Donna Noce and her team for this great quarter. Soma had yet another outstanding quarter with, once again, the Company’s highest comparable sales performance. This marks Soma’s ninth consecutive quarter of double-digit comparable sales increases. In addition, Soma achieved a major milestone in the quarter. For the rolling 12 months ending quarter two, the Soma brand achieved break-even profitability and we anticipate Soma will be profitable on an annual basis in 2012 – all right! We believe Soma’s beautiful and innovative intimate apparel solutions, unparalleled store customer service and dynamic marketing are the key drivers to our accomplishments. The Vanishing Back bra and the Vanishing Edge panty continue to attract new and repeat customers to the brand. The second quarter saw a successful launch of new products – the Vanishing Back minimize and the Vanishing Tummy panty. They slim, they smooth, they make lines disappear, and women love them. At this time last year, we were still in the process of clearing out apparel product that did not meet our new fashion aesthetic. This year with the right product and clean inventories, our apparel business has not only grown but is converting very well from a gross margin perspective. A lot has been achieved in just one year. Year-to-date, we’ve opened 25 new Soma stores and converted 10 FAS stores. We’re well on track to deliver 35 to 40 new locations this year and 15 to 20 conversions. With this level of performance, we can see the pace of new store growth ramping up even higher in the future. Congratulations to Laurie Van Brunt and her team for this great quarter. Boston Proper’s sales were a bit softer than planned; however, we were also up against double-digit increase in top line last year, which was tough to cycle. The fall product looks great and we’re looking forward to a strong back half. And in the second quarter, we completed our detailed planning activities for Boston Proper’s systems integrations. As part of this process, the Boston Proper team recognized the significant benefits to be gained by strengthening its systems, and therefore opted to proceed with systems integration to Chico’s FAS systems on an accelerated basis. As a result, the bulk of our systems integrations will be complete by the end of 2012, and Boston Proper’s management will be able to focus on its energy and driving the top line and testing its store concept in early 2013. Congratulations to brand president Sheryl Clark and her team for this great quarter. Turning to our pillars for growth that we started in our February conference call, I discussed with you our organic growth plans. I highlighted the fact that Chico’s FAS is one of the few specialty retailers who for the foreseeable future can grow its store count by at least 120 stores per year. And on the May call, I discussed our innovative and creative marketing plans which truly differentiate our brands and drive awareness, customer loyalty, and market share. Today I’d like to talk to you about the third pillar – that is, expense leverage. One of the most critical elements of our ability to leverage expenses, both historically and into the future, is our company’s shared service structure. In addition to the obvious benefits of scale, as we grow the top line we’re able to attract top level talent to lead our shared service functions and to implement efficient processes and world-class systems, none of which any individual brand could afford to do. In the past three years, we’ve centralized such areas as global sourcing, creative and ecommerce, besides the standard areas of real estate, finance, human resources and IT. Since 2008, we have already realized a very impressive 730 basis point improvement in SG&A leverage, and I believe there is more upside opportunity. Case in point – for the first and second quarters of this year, we achieved an additional 70 basis points of leverage over 2011. In short, our business model ensures that as we grow comp sales, we leverage both store occupancy costs and our shared services infrastructure. I’m pleased to say that our continued focus on expense reduction has instilled a cost conscious culture that permeates our operations. Looking to future opportunities, we just successfully cut over our DC operations to a redesigned, more automated facility. Once fully implemented, its significant enhancements will allow us to reduce store payroll through distribution efficiencies by reducing routine backroom inventory management. This will give our associates more time for customer-facing activities and the engagement to drive sales. As the third quarter pillar for growth, our business model allows us to realize sustainable ongoing expense leverage as we continue to march towards a mid-teens operating profit. Pam will now provide additional insights into the quarter and share with you our updated planning assumptions for 2012.

Thanks Dave and good morning everyone. I would like to now provide additional detail on our record second quarter results. Earnings per diluted share were $0.32 compared to $0.25 last year, a 28% increase and our 14th consecutive quarter in a row of double-digit earnings per share growth. These results reflect the benefits of higher sales and earnings as well as the meaningful share repurchase activity that has occurred over the trailing four quarters. In combination with our first quarter record results, the first half of 2012 is a record start to the year. For the second quarter, net sales were 642 million, an increase of 16% compared to 551 million last year, reflecting comparable sales growth of 5.6%, the opening of 97 net new stores, and 33 million in sales from Boston Proper, the acquisition of which was announced this time last year. We are truly pleased with our second quarter comparable sales performance, being up against double digit comparable sales and strong full-price selling results last year. These quarter two results primarily reflect the effectiveness of our marketing plans and an overwhelmingly positive response to our product offering, including new successful product launches. Proof in point- we are at an all-time high for active customers. Total company comparable sales increased 5.6% on top of 12.8% last year for a two-year stack of 18.4% with Chico’s Soma at 7.2% in the quarter for a two-year stack of 19.1%, and with White House Black Market at 2.3% in the quarter for a two-year stack of 17.2%. As Dave just said, these are among the best in the industry. Our new stores are off to great starts with total square footage up over 7% and with significant beats to pro forma sales expectations for White House Black Market fully validating our planned acceleration of capital for organic growth of this brand. In 2012, outlet stores are a significant portion of our planned real estate growth for Chico’s FAS. As of the end of the second quarter, total company outlet square footage is up 20% compared to last year, and White House Black Market achieved a 60% made-for-outlet product penetration in the quarter, already at planned full-year levels. We are exceptionally pleased with our second quarter gross margin results. These results reflect positive customer acceptance of our merchandise, which drove a higher than planned gross margin rate despite a more promotional competitive environment this year. Our gross margin rate of 56.4% was a five-year record for the company’s second quarter performance. As a percentage of net sales, our gross margin rate increased 30 basis points, primarily reflecting an increase in full price selling on top of last year’s strong levels, effective promotional activities, and well-planned inventories partially offset by the inclusion of Boston Proper’s results. Selling, general and administrative expenses as a percent of sales improved by 60 basis points to 43.0%, reflecting sales leverage of store expenses, payroll, occupancy, supplies and credit card fees, and the inclusion of Boston Proper’s results. Boston Proper’s marketing expenses approximated $11 million in the quarter. All-in, income from operations as a percent of sales improved by 90 basis points to 13.4% in the second quarter, and in combination with our 13.4% result in quarter one we continued to make good progress towards our goal of an annual mid-teens operating margin percent for our company. As Dave said last quarter, spring has always been our time and we have wrapped up the season with record first half results. I am thrilled to comment that we have already begun to effectively transition into fall with all brands in their second deliver at this point. Dave will share our quarter three to date results in his wrap up, and they will indicate that we are currently trend right for our customers in regards to fabric, weight and color. Excluding 13 million in Boston Proper inventories, our inventories were down 6% year-over-year, declining from last year’s increase of 30%. In-store inventories per square foot are down 7%, reflecting improved inventory productivity to last year. In summary, our inventories are turning well, are in line with forecasted sales levels, and we have the right mix of full price and promotional product as we start the fall selling season. This time last year, we announced the Boston Proper acquisition which closed midway through quarter three last year. As we shared with you at that time and we confirm today, Boston Proper has been a net positive contributor to each quarter’s results since the acquisition date. We are excited with our progress and are on track to delivering the long-term potential of this brand. Dave just updated you on our decision to accelerate the majority of our systems integration activities into 2012, and we have also just finalized plans for the test of a few Boston Proper stores early in the first quarter of 2013; therefore, our estimate of capital expenditures for 2012 will increase by approximately $5 million for these activities, and our estimate of one-time acquisition and integration costs will now total approximately 4 million pre-tax in 2012. During the second quarter, the company repurchased 1.8 million shares of our stock at a cost of 25.6 million or an average of $14.02 per share, which brings our share repurchase count over the trailing four quarters to 9 million shares at a cost of 111 million or an average of $12.29 per share. Since 2010, we have repurchased a total of 18 million shares for a total return of excess cash to shareholders of 226 million, which represents over 10% of the outstanding shares at the time our program was initiated just two years ago. As of today, we have 149 million available under our share repurchase program. As a result of our record first half results, we are updating our annual planning assumptions for 2012. Our updated 2012 planning assumptions are: net sales of approximately 2.55 to 2.6 billion, including comparable sales growth at a mid-single digit percent, 9% growth in year-over-year square footage, and 30 million in sales from the 53rd week; gross margin rate of approximately flat to 2011; SG&A rate improvement of approximately 50 basis points to 2011; one-time acquisition and integration costs of approximately 4 million pre-tax for Boston Proper; tax rate of approximately 38% with modest potential improvement if certain tax incentives are renewed for 2012; diluted weighted average shares of 165 million, excluding any potential impact of future share repurchases; inventories in line with sales growth for the full year, ending up approximately 15% to last year; and capital expenditures of approximately 155 million which includes an increase in store square footage of approximately 9% and the remodel of approximately 80 existing stores. We are thrilled by the ongoing progress of our business and of our new store performance as evidenced by our record first half results. Of course, the overall economy and political uncertainties compel us to be vigilant, especially in our outlook for the third quarter, while at the same time taking advantage of the momentum we have achieved. We have appropriately planned our marketing programs and inventory levels to ensure we maximize our opportunities without running undue risk. Therefore as we cycle last year’s easier sales comparisons, we are planning for a mid-single digit comparable sales increase in the second half with inventory to support that level of sales. As a reminder, the 2011 third quarter comparable sales increase for Chico’s Soma was 0.6% while White House Black Market is still up against a comparable sales increase of 11% in 2011, 10.2% in 2010, and 14.8% in 2009 for a three-year comparable stack for White House Black Market of 36%. Also as a reminder, for quarter three last year SG&A benefited from the true-up of incentive compensation. For the things that we can control, from innovative marketing to fashion right product and the most amazing personal service, we believe that even in a cloudy economic environment, we will be top of mind for her and continue to grow our share of her wallet. To conclude my comments, we believe we are well positioned for the balance of 2012 and beyond. With that, I turn it back to Dave for his wrap-up comments.

Great, thank you Pam. Second quarter was yet another record quarter as we successfully grew our overall market share. I’m pleased that I had a chance to share our significant brand accomplishments in the quarter as well as more specifics on expense leverage. So along with the other three pillars for growth – organic store growth, 120 stores a year; innovative marketing and maximizing our brands’ potential – we are well positioned as we look into the future. We are now in the fourth week of the third quarter and I can share with you that as reflected again on our unaudited daily flash, a point in time through yesterday, our total comp sales are running up about 10% on top of the quarter-to-date comps of 5% in the same time frame last year. This represents a strong start to the third quarter and indicates a positive transition into our fall assortments. All brands are positive so far in the quarter and total quarter-to-date sales, including Boston Proper – again, unaudited through yesterday – are up approximately 20%. In summary, we’re off to a great start in the third quarter. We believe that our track record of consistent sales and earnings growth clearly differentiates Chico’s FAS as a retailer with both long-term opportunities and the ability to drive profit expansion. Todd, I’ll turn it over to you for questions and answers.

All right, thank you Dave. At this time, we’re happy to take questions and I will turn the call back over to Valerie.

We will now begin the question and answer session. [Operator instructions] The first question comes from Adrienne Tennant of Janney Capital Markets. Adrienne Tennant – Janney Capital Markets: Wonderful progress. David, my question to you is first, there’s a lot of talk about the color bottom trend that’s happening, color print and pattern everywhere. We’re seeing a lot of that at Chico’s. You still have your novelty color that you bring into White House Black Market. Explain to us how you perceive that trend. It seems to us that a lot of that color needs to be pared back to a neutral, so we kind of like that thought process. And then secondarily, if you can talk about sort of that missy consumer psyche this year over last year, knowing that last year, I think, at this point we had the downgrade of the U.S. debt and all that stuff. So if you can just talk about how you think she’s responding kind of mentally in this current environment. Thank you.

Well, color for Chico’s has always been an important part of our business, whether it’s a major trend or not so major trend. Our customer loves color. She loves pattern. You know, one of the things that you could do is to contrast Chico’s last year, which was very neutral in palette, very soft, and obviously we didn’t fare so well last year. We responded, went back to our roots of color and pattern, and obviously the results have been terrific. In Boston Proper, we believe that we’ll still continue to have a color that we inject into the black and white. We don’t want to overdo it. We think that you can have too much of a good thing, so we’ll continue to inject a color once a quarter or so—

For White House.

For White House Black Market – I’m sorry – for White House Black Market. And I think that that’s it on color. I mean, we don’t see it as a major trend. I think the missy customer—you know, I would say that our results say that she’s loving us. Even in the challenging economic times like quarter three last year, we still performed, even though not to our expectations, and grew market share. This year, I think that she’s loving what we’ve got. Adrienne Tennant – Janney Capital Markets: Well, the stores look great. Best of luck.

Thanks.

The next question comes from Robin Murchison of SunTrust. Robin Murchison – SunTrust: Hi, good morning. Thanks for taking my question. Congratulations on the divisional performance and certainly it’s more than that – the disciplines behind it. My question is regarding how does the customer response differ, if at all, in terms of social media across the platforms, and also if you could comment on the small market store initiative. Thanks.

Well, social media actually is performing very well for all of our customer segments. White House probably took the lead there and has more fans, and has customers that have been maybe a little bit more responsive, but Chico’s customer is not far behind. We did something a little different here. You know, most people would have a marketing area and a public relations area. Social media was under PR for a long time. We actually split it up and we have a vice president of social marketing, which really has a group that just focuses on that for our brands, and we think that that is a very important thing to do. And the other half of the question was--?

Small markets.

Small markets. Small markets continue to exceed our expectations. We have really found a formula that we can put our brands into a small market and perform both in our opening sales for the first year above expectation and above our traditional sales projections, as well as be profitable right from the get-go.

Great, thanks Robin. Robin Murchison – SunTrust: Thank you.

Next question?

The next question comes from Neely Tamminga of Piper Jaffray. Neely Tamminga – Piper Jaffray: Great. Congratulations you guys. Just wanted to ask a little bit more about Soma. How should we be thinking about Soma’s profitability in terms of the seasonality in the back half? We have a very large intimate apparel company out there that we can look at in terms of their seasonality. It seems that they tend to be very disproportionately Q4 in terms of their profitability. Would that be similar to your business? Can you just help us think about it? Thanks.

Well unlike the rest of our businesses, Soma really does have a strong fourth quarter, so they fall into a more traditional retail pattern than Chico’s and White House and Boston Proper, which are much more of a first half business. So yeah, Soma’s profitability should continue to increase, and I think we’ve gone from a rolling-12 break-even profitability to profitable, so that says we expect better results for the second half. Neely Tamminga – Piper Jaffray: Thank you. Good luck.

The next question comes from Dana Telsey of Telsey Advisory Group. Dana Telsey – Telsey Advisory Group: Hi, congratulations everybody. Any more color in terms of pricing at both White House and Chico’s, how that’s being planned for the second half versus last year; and also in particular on White House, drivers given the fact that the product assortment’s been expended, whether it’s wear-to-work, denim, and marketing plans. Thank you.

In terms of pricing, we still plan to have a very high percentage of full-price sales versus promotional. We are anniversarying most of our promotional, regularly promotional events in terms of whatever coupons we had, but we certainly are not planning for big markdowns and clearances based on the way that we’re managing our inventory. I think that our product is well-priced and competitive, even in this environment, as we just proved last quarter. We had more full-priced sales than we have had, I think in a long, long time. Second half of that was—

Marketing, and maybe White House in particular. We could talk about the TV.

Yeah, marketing, we do have planned coming up a strong television campaign. Last year, we were very impressed – we tried it twice, more testing it and perhaps not as weighty of a media buy as we will do this year. We expect it to generate the same type of results – increase in sales and most importantly increase in new customers. It’s been really a big help to increase our customer file.

Thanks, Dana.

Next question?

The next question comes from Betty Chen of Wedbush. Betty Chen – Wedbush Securities: Good morning everyone and congratulations on a great quarter. I was wondering, Dave, I think you had mentioned that in the second quarter we may have been a little bit lean in terms of White House Black Market inventory, and certainly the team had prioritized the new store openings. How do you feel about the inventory position now going into the third quarter – are we properly stocked there? And then I think just to follow up on an earlier question, I think in terms of the AUC opportunity, how should we think about that for the back half and are there any early leads you can share with us regarding product costs in the spring 2013 time frame? Thank you.

Okay. Pam, you want to take the AUC?

Yeah, absolutely. Betty, you might recall that when we started at the beginning of the year, we had talked about the fact that we expected to see some slight amount of cost increase in the first half of the year but that our sourcing team would be able to mitigate the majority of that as we look to the back half, and those assumptions have not changed and there certainly is not anything on the radar that would indicate that there would be any unusual cost pressures as we look to spring of next year. It’s still somewhat early, but there is certainly no indications of anything of note.

And I would say regarding inventory right now, we’re comfortable with our inventory levels. Of course, the unknown is how the TV campaign will drive sales again this year, and if it drives them over—you know, well over our plan, then obviously we’ll have lean inventory conditions again. But you know, as I said before, it’s not all bad to leave a little on the table. I’d much rather have it that way and be in chase mode than be trying to mark it down and have that gift follow you for the next few quarters. Betty Chen – Wedbush Securities: Great, thank you. Congratulations.

Thank you.

The next question comes from Lorraine Hutchinson of Bank of America Merrill Lynch. Paul Alexander – Bank of America Merrill Lynch: Hi, it’s Paul Alexander for Lorraine. Could you guys give us a little more color on the comp acceleration here quarter-to-date? Is what you’re seeing mirroring what businesses had the easiest comparisons from last year, or is there anything going on with traffic? And then as you look forward to the rest of the year and comparisons in the outlook decelerating to mid-single digits from this, is that about comparisons getting a little bit more difficult again or are you just being a little more cautious on the macro environment? How are you thinking about that? Thank you.

Yeah, I think with comp trends, you know, as we go into third quarter obviously it is our smallest quarter of the year and it’s also our easiest comp trend of the year. So as we said, we’re up about 10% right now against the same time period 5% last year, so obviously third quarter, again, is if there is any—it is the easiest quarter of the year to comp. We just came through in the second quarter the toughest quarter of the year to comp, so that’s the environment that we’re heading into fall. Now I would say that any concerns that we have are more macro. We believe in our assortments, we believe in our brands. We think that our teams have really offered great merchandise, but there is going to be a lot going on this fall with the economy, with the elections, with everything else. So I think that that looks at our overall—as we look at our overall picture. Paul Alexander – Bank of America Merrill Lynch: Great, thanks. And then just one follow-up – generally on inventory, it sounds like you’re looking forward to turning inventory faster and not buying too much, trying to chase; yet at the same time, the outlook is for inventory to be in line with sales, which is growing, so are you looking for inventory to be up but just not as much as sales? Thank you.

Pam?

Yeah, you know, we’re planning for our inventory to be consistent with our plans for sales. I think you see a measure at a point in time, but clearly we are planning for our inventories to turn effectively. We’re planning, as Dave said, for continued strong penetration of full-price sales, and those are things that lead to our overall planning assumptions for inventory.

And I think that we want to continue to manage our inventory lean. You know, Stanley Marcus—years ago, I spent a year visiting with him once a month, and Stanley said fashion inventory is like produce – sell it before it gets rotten. I think that that—I hate to say it, but that’s the way we look at inventory. Fashion inventory has a ripeness factor to it, and you want to sell it and sell it at full price, so too much of a good thing is too much.

All right, thanks Paul. We’ll move to the next question.

The next question is from Samantha Shapiro of Stifel Nicolaus. Samantha Shapiro – Stifel Nicolaus: Hi. I just had a question in terms of the Chico’s stores. What’s the average size of a Chico’s store right now, and are you guys still shrinking those?

The average size of a Chico’s store is somewhere between 3,200 and 3,500 square feet. A lot of this depends—I mean, we may have one or two that are 3,700 or 3,800. Sometimes it depends on the boxes available. We are shrinking some of the larger stores that we had. We had about 150 that were built in 2007, 2008 which were in the 5,000, 6,000, 7,000 square foot area, which were way, way too big. Even if the landlord offers us better economics, we think that the assortment that you have to put into one of those big stores is too much, so as we have the ability to do it, we are looking at shrinking the real estate. I mean, there’s some places where it’s a close call, so we may leave it; but for the most part, we believe in smaller, more efficient stores. Samantha Shapiro – Stifel Nicolaus: Right. And then I guess how long then until, I guess, the store bases right-size?

Samantha, this is something that we address as leases are coming due, so it’s going to be over the next several years. I wouldn’t expect a huge bang in any one individual year. Samantha Shapiro – Stifel Nicolaus: Right, okay. Thank you.

Okay, thank you.

The next question comes from Margaret Whitfield of Sterne Agee. Margaret Whitfield – Sterne Agee: Good morning, and I’ll add my congratulations. A couple of questions – Dave, you mentioned earlier that Soma was more of a fourth quarter brand than the others. What are your plans for this year’s fourth quarter, especially with regard to the core Chico’s business? I wondered if you could comment on why you think Boston Proper missed the sales plan, and if Pam could offer us what the SG&A benefit was last year in quarter three. Thank you.

Well, traditionally Soma is a gift-giving business and fourth quarter with sleepwear, loungewear, slippers, bath and beauty, fragrance – probably a little less so on the foundations but apparel and the non-foundation part of the business really comes on strong and drives the sales in fourth quarter. Obviously—you know, when I came here back in 2009, I was amazed when I looked at the numbers and really discovered that—really dug into the numbers, that the fourth quarter not only was the smallest quarter of the year for our company but was also unprofitable. We have reversed that trend – fourth quarter is now the second smallest quarter of the year. Third quarter is smaller, and we make money in the fourth quarter. So we believe in the fourth quarter and we’ve turned it around. Our customer does look—rather than buying for herself, she’s buying for others during that time period, so whether we’ll have the traditional fourth quarter sales or the fourth quarter results compared to maybe more of the industry, I don’t think so. But it can be a heck of a lot better than it was, and we’ll continue to improve.

Yes, and Margaret, I don’t believe that we specifically quantified the impact of the incentive comp last year. We can go back and check our notes and just follow up with you later today. Margaret Whitfield – Sterne Agee: And Boston Proper, the nature of the sales miss?

Well, I think it really was a function of them again cycling double-digit comps; and as we said, we’re seeing momentum as we look to the back half. So no specific call-outs.

They had—one of their fashion trends was not as strong as it should have been, and they were a little out of balance between their conservative—more conservative, sophisticated clothes that work well in the northeast, and so probably a little bit too southwestern oriented. I think that had some impact, but there were a lot of factors. But we’re still—you know, they were up against a hell of a year from the previous year, and we see them again coming on strong. You know, when we look—as I’ve said before, in the fashion business, every brand gets to take a breather every once in while. You know, they have their time-out and that’s why we believe in a portfolio of brands because when you have—you know, it’s hard to have everything always perfect all the time. But when you have some brands that are really firing well and others that are taking a little rest, it works in a portfolio. It’s really beautiful when they all four work together, which we have seen and will continue to see. Margaret Whitfield – Sterne Agee: Thank you.

Thanks, Margaret. Next question?

The next question comes from Jennifer Black of Jennifer Black & Associates. Jennifer Black – Jennifer Black & Associates: Good morning, and let me add my congratulations. I wondered if you could talk about accessories at Chico’s and White House, and are there certain categories of accessories you feel are opportunities. And I wondered how the launch of Soma Sensualities, how that went, and if you were going to keep Oh My Gorgeous, that collection around. And then I have a follow-up.

Well, I’ll start with Soma. Soma Sensualities was a very good launch, and we see it will build as we continue to go into the fourth quarter. We will keep the Oh My Gorgeous fragrances. In retrospect, we probably should have launched the bath first, Sensualities first, and then launched the fragrance; but we think that they both can continue to play an important part of our business. Other part of the question?

It was around accessories.

Accessories. Accessories, we see opportunity really in shoes, strong opportunity. We just talked about White House Black Market – they put memory foam comfort into their shoes. They went leather soles. They’ve really upgraded the quality, and we’ve seen some really strong results. We think that’s an opportunity for Chico’s as well, but there’s so much low-hanging fruit and so much that we need to do, that for Chico’s it’s probably a little bit more on the backburner, but we think that will be a big opportunity. Our main focus will continue to be jewelry and scarves, and having seen some of the collections – and belts – and seeing some of the collections, as we move forward I think they get better and better, and I think that’s a huge opportunity for us. Jennifer Black – Jennifer Black & Associates: Great. And then my follow-up – you’ve added a lot more denim and non-denim styles with the So Slimming technology, and I just wondered if you had any plans to add this technology to skirts or dresses, or will you just continue to add more styles in denim and non-denim pants?

I’ve heard it considered in skirts, but I’m not sure about the technical design of it yet. But I think we’ll continue to use it in bottoms, certainly, and expand it there. I mean, we’ll have a balance where you’ll be able to buy with and without, of course, but so far the reaction to the So Slimming casual slacks and denim has been terrific. Jennifer Black – Jennifer Black & Associates: Great. Thanks so much.

Hopefully you’ve seen the TV commercials. Jennifer Black – Jennifer Black & Associates: I have seen the TV commercials. They’re great.

Thanks, Jennifer.

The next question comes from Marni Shapiro of The Retail Tracker. Marni Shapiro – The Retail Tracker: Hey guys. Congratulations, great quarter. I was curious just on two small things – you launched the work kit about a year ago. Are you going to do something to anniversary that launch and extend the work kit at White House? And then if you can just touch on the success of the So Slimming – are you considering bringing that technology whether into White House – maybe the customer doesn’t need it, hopefully – or into Soma into loungewear and that kind of apparel?

So far it is in the Chico’s brand and we have not extended it to other brands. I would probably doubt that it would go into White House, but there is some—like, the Vanishing Tummy panty, so there is some So Slimming things that we’re doing already in Soma. Marni Shapiro – The Retail Tracker: Great. And then the work kit?

Oh, the work kit – yeah, we believe in the work kit. I think that we believe in really a lifestyle collection, and certainly you’ll see it anniversaried as we begin our TV campaign, upcoming TV campaign. But we think the work kit is now a very important part of our total overall assortment where we have polished casual, casual and denim, and certainly the work part now—the wear-to-work part, which was really missing from our assortment. So we’ve really converted White House from a special occasion dress brand to a lifestyle brand. Marni Shapiro – The Retail Tracker: Excellent. Well, it looks great. Best of luck, guys, on the fall season.

Thank you very much.

The next question comes from Brian Tunick of JP Morgan. Brian Tunick – JP Morgan: Thanks. Good morning everyone and congrats as well. I guess two things – one, for Dave, you talk about this march to the mid-teen EBIT margins over the next couple of years. You highlighted expense leverage. Obviously you’ve gotten a lot of it. Can you maybe talk about two or three of the other big drivers to get us there, whether it’s DTC penetration, made-for-outlets or Soma, et cetera? And then I guess for Pam, your gross margins of the company have been down in the second half over the past two years. The guidance, it seems like, is implying not much recapture from those two years, so just wondering – is there a change of how you guys think about the profitability of the second half? Is it a mix of business or is there anything else happening why you don’t believe the second half can get back to the gross margins it’s been a couple years ago?

Well first, Brian, I’ll talk about a whole bunch of things. Some of the things that we’re using in our drive to the mid-teens, one is store productivity. Obviously our small and mid-market strategy, when you open up stores that right off the get-go were more profitable and more efficient, continued comp sales increases in our stores drives extra volume, and you already have a lot of sunk fixed costs. I think that our smaller stores, we’ve taken that large store idea of 2000 – 2008 and have continued to drive our store sizes more efficiently and more appropriate for each brand. Direct-to-consumer, as you said, will continue to increase its penetration, and I think that as you look at this quarter, I believe that our operating income was in the teens – it was 13.5% or something like that. So we’re on the march.

And maybe just to comment about the gross margin, I think that there have—you know, there’s clearly a different environment today than there was three, four years back. Clearly we are talking about the environment being more promotional. Dave did comment about there are things that we control, but we also have to be effective in the environment that we’re in and the level of competitive activity that we see. We do feel good about how we plan for our gross margins. As we’ve said, we’re planning to continue to drive our penetration of full price sales. We are entering the back half with the gross margin down 30 basis points year-to-date, and so I think that our planning assumptions factor that in and that would lead to improvement in the back half for this year.

All right, thanks Brian.

This concludes our question and answer session. I would like to turn the conference back over to Todd Vogensen for any closing remarks.

Okay, that does conclude our call for this morning. Thank you all for your questions and for your interest in Chico’s FAS. As always, I’m available for any follow-ups necessary after the call. Thank you for joining us this morning and we will be talking to you soon.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.