Todd Vogensen - Vice President of Investor Relations David F. Dyer - Chief Executive Officer, President, Director and Member of Executive Committee Pamela K. Knous - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Treasurer

Randal J. Konik - Jefferies LLC, Research Division Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division Gregory Baglione - Barclays Capital, Research Division Simeon A. Siegel - Nomura Securities Co. Ltd., Research Division Betty Y. Chen - Mizuho Securities USA Inc., Research Division Andrew Schmidt Adrienne Tennant - Janney Montgomery Scott LLC, Research Division

Good morning, and welcome to the Chico's FAS, Inc. Fourth Quarter 2013 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Todd Vogensen, Senior Vice President of Finance. Please go ahead, sir.

Thanks, Denise, and good morning, everyone. Welcome to the Chico's FAS Fourth Quarter Earnings Conference Call and Webcast. Joining me today at our National Store Support Center in Fort Myers are: Dave Dyer, CEO; and Pam Knous, CFO. Before Dave begins his executive overview, we'd like to remind you that our discussion 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 these 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. Also, the results discussed on this call exclude goodwill and intangible impairment charges, as well as nonrecurring acquisition and integration costs for Boston Proper. A reconciliation to GAAP results is included in today's press release for your reference. And with that, I will turn it over to Dave. David F. Dyer: Thanks, Todd, and good morning to everyone. Today, we're going to discuss the fourth quarter and full year results and we'll provide insight into initiatives that will position us to regain momentum in 2014, laying the groundwork for success well into our future. Needless to say, we're glad that 2013 is now in our rearview mirror. For the year, diluted earnings per share were $0.85 against our record $1.09 last year. Comparable sales declined by 1.8% on top of the 7.2% increase last year. Total sales were up 0.2%, obviously much lower than planned as traffic was weak across the majority of the year. The decline in traffic was an industry-wide trend that is proving to be difficult to turn around. Yes, there were many external factors at work here. Consumer spending shifted towards higher-ticket, durable goods, the consumer sentiment remained challenged, shopping behavior was undergoing a major shift as e-commerce continued to expand at a robust clip and, of course, the weather didn't help much either. And there were internal factors as well. The White House Black Market had too much color and did not have enough special fashion products. Chico's had too much career and did not have enough color and print. Boston Proper tilted too much to the store assortment, and did not have enough of the print, color and boho chic that they are known for. And because of this, 2013 played out as the most promotional year since 2008 and significantly impacted our margins. You heard me say it again and again, retail is not for the faint of heart, especially last year. Pam will provide specific commentary on quarter 4 later. My goal today is lay the framework for 2014. We're only 3 weeks into the year, and I can tell you our annual plans call for increases in total sales, comparable sales, gross margin dollars and earnings per share. Like everyone else, we've been impacted by the severe winter weather at start of the year, and business remains sluggish through Valentine's Day. While our quarter-to-date net sales are down mid-single digit, these results are not a reflection of our full quarter expectations. I would add that since Valentine's Day -- since the Valentine's Day weekend, our comps have turned positive. Once warm weather -- warm spring weather arrives, we believe customers will return to a more normalized pattern of shopping. But based in our expense in January and early February, we're watching business trends very closely. These early weather challenges notwithstanding, we believe 2014 will shape up to be a good year for us. A number of very important -- for a number of very important reasons, which I'll get to in just a minute. But just to put a wrap on 2013, I'd like to briefly mention a few, yet significant, accomplishments. Company-wide, we opened 135 new stores, investing $121 million in stores and technology, including the first Boston Proper stores, which I'm delighted to report, are performing above expectations. As you know, in 2013, Chico's FAS went international. Our White House stores in Canada are off to an incredible start. This year, it'll be Chico's turn to take Toronto by storm. And as Women's Wear Daily had broken the news a few weeks ago, the Chico's parrot will eagerly spread its wings in Mexico in a few months. We also executed meaningful dividend and share repurchase programs, returning $283 million in cash to our shareholders in 2013 alone. In December, our Board approved another repurchase authorization of $300 million, and since 2010, we have returned approximately $690 million to shareholders by repurchasing 20% of our outstanding shares and significantly increasing our dividend rate. Now, turning to the future. As we have discussed with you, over the long term, our goal is to deliver through our high-performing portfolio of brands, compound annual sales growth in the low-double digits and compound annual earnings per share growth in the mid-teens over a meaningful period of time. While 2013 resets our baseline for future growth, we believe we're on the right track. There is no doubt about it, product is key to driving traffic and new customers, and we have exciting plans for 2014. We have online exclusives in all of our brands. Chico's popular golf wear is now in 400 stores, up from 100 last year. White House Black Market just launched its Saint Honore jean collection, which is now supported by television. We've had new breakthrough technologies in bras, and they are set to launch in just a month or so. Boho chic silhouettes are again front and center of Boston Proper, and the customer is responding. Our 2013 strategic imperatives remain a priority for 2014. That's omni-channel development, store growth at Boston Proper and international expansion. Plus, in 2014, we're making major enhancements to our already successful loyalty programs. First, building on our 2013 omni-channel success, our multichannel penetration increased 18% last year, and we expect significant expansion this year. Online exclusive merchandise sales increased 83%, and we expect this growth to continue in 2014 as well. Our customer files remain at an all-time high, which is an indication of the health of our future business. Innovative television advertising has really been an important differentiator for our brands, and we intend to further leverage our marketing expertise to drive traffic both online and in stores. As I have stated many times before, we are channel-agnostic, and we have invested in infrastructure to manage our marketing supply chains and technology as 1 channel. In addition to the 220 to 130 new stores for 2014, in the second half of 2014, we'll begin rolling out a new POS system that will enable iPad clienteling and other capabilities, facilitating even more amazing service to drive traffic and new customers to our brands. We're responding to the ever-changing consumer behaviors, and our objective is "to create customer-driven interactive experiences that drive 2 transactions at every touch point." We believe that the fusion of community, content and commerce is one of the most powerful and effective drivers of product consumption in a digital environment. We have created a holistic model that we call Digital Retail Theater in response to these rapidly changing consumer behaviors. It will provide a new way for our customers to embrace all aspects of the digital shopping experience on any device any time and experience community, content and commerce in ways not even possible a year ago. The digital retail theater is cloud-based and every element is fully integrated into each other, accessible 24/7. Our customer book is the fusion of CRM information into a cloud-based data stream that is accessible with secure iPad tablets in stores. This is currently testing in select Chico's stores. Our Tech Table 2.0, with ultra-high-res display, is currently in Boston Proper stores and is testing in White House Black Market. This technology is touch and gesture activated. We will support sophisticated messaging across all devices from associate to client. And as I mentioned earlier, we're deploying a state-of-the-art POS system fully integrated into the digital theater and enabling mobile checkout. We'll have smartphone apps for iOS 7 and Android, which will be completed this year; a client closet, which is a virtual and digital space accessible by the customer and the associate to enable suggestive selling, and modeling is in development currently; and lastly, we're testing digital signage in stores. We believe that we're making the right investments to keep up with a shift in consumer expectations and experience. Regarding 2014 new square footage, the majority of our location will be in emerging brands, outlet centers, international markets, with approximately 40 Soma stores, 20 Boston Proper stores, 20 outlets, 10 international stores and there's 15 Chico's and 25 White House Black Market stores as well. We're investing in Boston Proper's growth, store growth. Our initial 4 stores are off to a terrific start, with nearly $800 in sales per square foot. In 2014, we'll launch new boutiques in A malls, including Merrick Park and Dadeland Mall in Miami, International Plaza in Tampa; we'll be in Palm Beach Gardens, Perimeter Mall in Atlanta, Southlake in Dallas, LaCenterra and First Colony near Houston, among other locations. I think there currently we have 18 locations, and perhaps we'll have 20 next year in Boston Proper. This takes our test-of-concept to prime time as we expand in a broader geography and in premier locations. We believe Boston Proper has a bright future as an omni-channel retailer. And as I said earlier, international expansion is well under way. White House Black Market will be expanding their presence in the Toronto area, and we're launching our first 4 Chico stores in Canada. Our data shows that Chico's already has an enthusiastic customer base in Canada, and the associates at our White House Black Market Canadian location are being asked by their customers, "How soon will Chico's be coming?" Clearly, the Canadian customer is knowledgeable about our brands, and we can't wait to delight her with Chico's stores. Our expansion plans also call for us to look south, launching the Chico's brand Mexico through an exclusive franchise with Liverpool Department Stores. Liverpool is a major retail player in Mexico, and they have already identified high-quality spaces for standalone stores and are working with us to develop brand-right shop-in-shops within Liverpool stores. Liverpool is an outstanding partner, with deep experience and understanding of the consumer in the Mexican market. We're excited to bring the women of Mexico our fabulous Chico's fashions. And finally, our evolving loyalty programs. These programs will become even more powerful in driving traffic and increasing her spend with us. As you know, over 90% of our transactions have been tied to a loyalty member. This month, the White House Black Market program was relaunched as WHBM Rewards and the program maintains all of the terrific existing benefits and adds even more, all repackaged in a chic new design. White House Black Market rewards will be more prominent to customers and will include tiers that provide increasing benefits to customers who will spend more with White House Black Market. This year, Soma will be getting the dedicated loyalty program it has long deserved, no longer tied to the Chico's brand. And by the end of the year, plans are in place to improve and enhance the venerable Chico's passport program and begin the launch of our first-ever rewards program for Boston Proper. As I look to 2014, even while external conditions remain challenging, I know we're up to the challenge. I'm confident that our product is on target. We have plans in place to drive traffic. We are executing on a strategy that positions us for growth in 2014 and beyond. We're going to continue to control the controllables, and in a few minutes, I'll return to wrap up with my concluding comments. And with that, here's Pam. Pamela K. Knous: Thanks, Dave, and good morning, everyone. I would now like to provide details on our fourth quarter performance and color commentary on 2014. Fourth quarter earnings per diluted share were $0.04 in 2013 and $0.20 in 2012. For the fourth quarter, net sales were $610 million, a decrease of 6% compared to $652 million in last year's fourth quarter, primarily reflecting 115 net new stores for a square footage increase of 8.4%, offset by a decrease in comparable sales, and by $38 million of net sales attributable to the 53rd week of fiscal 2012. Similar to previous quarters this year, weak retail traffic and the resulting promotional environment resulted in a negative comp of 3.4% for a 2-year stack of plus 0.3% and a 3-year stack of plus 9%. Always difficult to estimate, the extreme winter weather across much of the country negatively impacted our fourth quarter sales. Average dollar sales and transactions were both lower, yet units per transaction and conversion were both positive. Once she got in, she liked what she saw, and she was motivated by our sophisticated fashion at very attractive price points. Chico's/Soma comps were down 1.5% for a 2-year stack of plus 0.8% and a 3-year stack of plus 6.3%. The Chico's brand experienced a low-single-digit comparable sales decrease against flat comparable sales in last year's fourth quarter. The Soma Intimates brand experienced a mid-single-digit comparable sales increase on top of a double-digit increase in last year's fourth quarter. White House Black Market comparable sales were down 6.6% in the quarter, for a 2-year stack of down 0.3%, yet still with an impressive 3-year stack of plus 15.1%. We believe the fourth quarter experienced the highest level of promotional intensity since 2008. This impacted White House Black Market the most, as lean inventories and discounting necessary to drive traffic resulted in a negative comp, all from lower average unit retail in contrast to high levels of full-price selling last year. At the Chico's brand, the impact of the promotional environment, in addition to the final full quarter that Chico's was cycling the So Slimming launch from 2012, resulted in a low-single-digit negative comparable sales result. Soma's momentum continued into the fourth quarter, with record sales and profits capping a successful 2013. Soma had a great gifting quarter, with cozy and stylish pajamas and robes, which were featured in our television advertising for the first time. Amidst a challenging backdrop, we are pleased Soma again drove a mid-single-digit comp among the best in all of specialty apparel this quarter. Boston Proper continued the repositioning of its product. As we discussed last quarter, our late 2014 spring collections are the start of returning to our core Boston Proper merchandise, with a full offering revamp for fall. Gross margin in the quarter was 50.7%, 250 basis points below last year as we moved aggressively to sell through our seasonal inventories in a very promotional and competitive environment. As a reminder, we were cycling high levels of full-priced selling last year. We were pleased to end the quarter with our in-store inventories per square foot down 0.8% compared to last year, or down 1.1% on a 2-year stack. Note that our total inventories include approximately $10 million related to the impact of Chinese New Year shifting from February 10 to January 31 as we took steps to ensure timely seasonal receipts and $11 million related to new-store growth. Excluding these amounts, total inventories were up by 5%. SG&A as a percent of sales in the quarter was 49.5%, up 410 basis points to last year, primarily due to the leverage of occupancy costs, 115 net new stores, marketing and cycling the impact of sales from the 53rd week last year. The impact of softer top line trends was partially mitigated by our control of the controllable. And even including the increases in occupancy and marketing, we managed our expense dollars to only a 2% increase, also reflecting a reduced level of incentive compensation. The fourth quarter results included a $6.2 million income tax charge, or $0.04 per diluted share, related to the Boston Proper noncash goodwill impairment recorded in the third quarter. Excluding the tax impact of the impairment charge, our effective tax rate would have been 20% in the fourth quarter and 35.5% for the full year, primarily reflecting favorable tax settlements and credit. Looking back on the full year, we will remember 2013 as a year of strong merchandise innovation, with perfect form fabric and Instantly Slimming line at White House Black Market, Effortless shirts at Chico's, Stunning Support Bra at Soma and the return to what makes Boston Proper Boston Proper; unique, sexy, boho chic fashion. We will also remember 2013 as a year of our first initial investments in our strategic imperatives of omni-channel experiences, Boston Proper store growth and international expansion, as well as a year of a highly promotional retail environment throughout the majority of the year. And also, a year where weather was an unpredictable element for most of the year, from the coldest March in over 10 years to polar vortexes. And last but not least, challenges of cycling the phenomenal success of our So Slimming launch and color trends from 2012. We had many clear learnings, which are integrated into our 2014 plans. The accelerating trend toward mobile devices, facilitating greater customer convenience; building even greater omni-channel experiences through updated loyalty programs, advanced technology investments and innovative marketing; further differentiating our offering through unique high-quality fashion our customers expect from us; and being even more creative in driving traffic during highly promotional environments by elevating the customers experience across all channels, with enablers, such as customer relationships and new uses of technology to deliver greater personalization. Therefore, we will continue to make investments in the future growth opportunities we began last year. Today, we are pleased to have shared with you that we will be making $30 million to $35 million in strategic capital investments in 2014, which are included in our 2014 capital. As Dave previewed with you, these initiatives are omni-channel development, Boston Proper store growth, international expansion and loyalty program evolution. And we'll add approximately 100 basis points of noncomparable expense to our 2014 SG&A on top of the 20 basis points we incurred in 2013. We are excited to see the evolution of omni-channel experiences through accelerating e-commerce growth, elevating in-store customer service and increasing customer interaction in whatever channel she chooses to shop, each of which underscores the importance of our strategic imperatives. We are optimistic about our future prospects, and we are energized as we start the new year. We look forward to sharing our progress with you. Thanks, and here's Dave. David F. Dyer: Okay, thank you, Pam. Well, based on our fashion and trend-right merchandise assortments, our creative and impactful marketing, omni-channel store and online growth initiatives, our technology initiatives and the hard work of our many associates whose spirit and talent are critical to our success, we are excited about our prospects in 2014. Let there be no doubt, there were meaningful learnings in 2013. We didn't achieve the goals that we set for ourselves. Our 2014 plan integrates these learnings, and we will be diligent in executing against these plans. The foundation of our brands is to differentiate through innovation, quality and service, with the high inventory turnover demanded of a fashion brand. While we face cyclical, near-term headwinds we believe that our unique brand positioning has and will drive our success over the long term. Thank you, and we'll now open up the call to questions. Todd?

Thank you, Dave. That concludes our prepared comments for today. At this time, we would be happy take your questions. [Operator Instructions] And with that, I will turn the call back over to Denise.

[Operator Instructions] And our first question will come from Randy Konik of Jefferies. Randal J. Konik - Jefferies LLC, Research Division: I guess first question is, I guess, Dave, you said something regarding comps being positive since Valentine's Day, is there any type of color you can give us on a divisional-type basis, anywhere that you maybe see one division better than the other? And I guess my other kind of question is more long-term oriented is, to think about the operating margin kind of opportunity, where can we see these operating margins kind of shake out on a normalized-type basis, and how do you think about that from an gross margin/SG&A as a percent of sales perspective? David F. Dyer: Well, I don't think I can really give any more color than to say that we went positive since Valentine's Day. I mean, obviously, it's just a snapshot into the quarter, and we had a lot of unusual events that happened early in the quarter and certainly through January. I think that our margins -- I think that one of the things that we're looking at right now is how to react in the promotional environment that we seem to find ourselves in. We've always differentiated through quality of service and quality of product and being fashion-right. I mean, that has been our model. It's really a service model where we build relationships rather than looking at transactions at the lowest price. We found ourselves in fourth quarter in a very, very promotional experience. I mean, I haven't seen some of the promotions that -- I mean, I saw some stores they had 80% off in windows. I mean, you've got to be kidding? And then it seemed like the norm was 40% and 50% off the entire store. That is an area that we are spending a lot of time looking at now and trying to understand and how we react to it. But at the same time, I refuse to lower quality to increase margin in a promotional environment. I believe that when you lower quality in order to promote -- to get goods cheaper, so you can have a higher initial markup to promote, that is a strategy that is really short term. And while it may work in the short term, I would say that the bitterness of poor quality will last much longer than the sweetness in price. So that's kind of where I am in that. I would say that, yes, we plan to continue to increase our margin, but I think we're going to do it the old-fashioned way, by earning it through great product. Randal J. Konik - Jefferies LLC, Research Division: Is there some sort of margin target we can be thinking about on the next few... David F. Dyer: I'm sure Todd's got [ph] ones that you can think about.

At this point, I think the best thing is to point you back to our long-term goals, which are growing the top line sales by low-double-digit percentage in the earnings per share by mid-teens. And over the long term, those are really the goals that we're most focused on at this point. Randal J. Konik - Jefferies LLC, Research Division: Can I ask one more thing?

Sure. Randal J. Konik - Jefferies LLC, Research Division: Sorry. So the last question, just regarding free cash flow generation, obviously, you upped the dividend and you talked about -- upped the share authorization, et cetera. So how should we be thinking about long-term CapEx needs and free cash flow generation in the business? Any specific targets there? David F. Dyer: No specific targets, but I think if you look at it, we have a history of returning our excess cash to shareholders. If you go back and look at the last 3 or 4 years, I think we've done a very good job of that. And I think that we've returned quite a bit of our excess cash to shareholders, and that's our plan going forward.

Our next question will come from Edward Yruma of KeyBanc. Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division: You've had a couple issues through 2013 in the White House Black Market business as it relates to color. I know that was obviously a huge leg up for you when you added color a number of years ago, but I guess, how should we think about longer term the role of color within the business, and how you can most appropriately pull color into the store? David F. Dyer: Well, I think there's a couple of things that we learned with color is, one, we're making sure, if you look at it now, where we went from a soft green into a blue, if you look at the prints, we've incorporated several colors into one so that your color doesn't become obsolete on your floor as you come in to the next season or into the next delivery. We also are going back to our old practice of having a cleanser, the "sorbet course" between deliveries, where we actually just cleanse, go to pure black and white and clean up the color and then move forward again. And I think those are some of the things that we did well early and perhaps we got overly enthused with the impact of color, and we got it a little too out of much balance. I believe that there's several things that we have done in White House besides color. One of the things that we looked at is we probably got in our exuberance to drive volume maybe a little less some of the real special things that we had in our assortment that crème de la crème, the garments that you could find nowhere else, the ones that work were couture like in our assortment. We really didn't do as well as we should have in having those in our assortments last year and perhaps we went a little too career and not enough in the casual parts of the business, as we go back and reflect on it, and that's from the work kit. We have a lot of successes that really kind of drove us to the place where we were. And I guess that what you could say is, maybe sometimes too much of a good thing is too much. We feel that we've made corrections. I can tell you that once we saw that going on, Donna and her team went back and certainly redid the assortments. They flew to Asia and completely redid the spring assortment, and I think we're having terrific response in those assortments as we measured in less-weather-impacted areas. They have been very, very good response to those assortments. And I will remind you, too, that White House Black Market has a 3-year stock of 15.1%. I mean, they were up against a huge fourth quarter from the year previously. So while we had a little disappointment this year, I would say that, that was nearly a speed-bump in the forward advance of White House Black Market. I really feel that we're back on track there, and I think you'll see much better performance this year.

The next question will come from Matthew McClintock of Barclays. Gregory Baglione - Barclays Capital, Research Division: This is Greg Baglione filling in for Matt. Just a question on omni-channel by brands. As you look back at 2013, I was wondering which brand do you think you made the most progress in terms of capturing new customers and improving traffic? Another quick follow-up, just given the holiday season was clearly, promotional and competitive for most retail, how do you think you're lobbying your loyalty program this year versus prior periods and how should we think about utilization of these in investments in 2014? David F. Dyer: Well, I think the loyalty programs, as you know, we're revamping and we just rolled out White House Black Market. And I can tell you we're maybe 2 or 3 weeks -- 2 weeks into it. And we've had some good initial success in not only reactivating customers, but attracting new customers into the program just by the way that we've rolled it out. I mean, one of our big learnings from our loyalty programs is when we went out and looked at them and we actually had some outside people look at them, they said, "Your programs and what you offer is great; you're not doing a good job of marketing them." So in addition to enhancing them, we have also done a much better job of marketing them. I mean, right now, we call it White House Black Market Rewards and we promote it. I mean, you would be very tough to find any mention of it in our stores beforehand. Now you see it all over the place. Now you're going to see it begin to happen as Chico's later in the year and Soma roll out. Probably next year, we'll have a good rewards program in Boston Proper. And we believe that this is the type of thing that will help us compete more in highly promotional times. If we can give them extra incentive to purchase or extra rewards for purchase during that time, we think that that'll help us get through some of these really promotional areas. And there was another question that he had.

Omni-channel, any particular brands? David F. Dyer: We're doing a lot of tests. I mean, when we look at omni-channel, obviously, we have a virtual inventory and that we manage it as one big pool. A sale is a sale. Whichever channel sells it first gets it. We've talked about our locate in the stores, which is actually shipped via our direct-to-consumer infrastructure, even though it's rung as a sale in the stores. I mean, we're really very, very combined. And I would say that across-the-board, we had great increases in the omni-channel and kind of merging the 2 channels in the direct-to-consumer. Penetration is high and across all the brands. And I think it's getting better and better. As I talked about in the technology that we're putting in, it really is to make it much more seamless in any interaction, wherever she shops. I mean, I didn't mention iBeacon-ing, which we're looking at. I mean, there's all sorts of things that are under test, like right now, when we look at our Boston Proper stores with that tech table, quite a bit of the sales in those stores, which are rung as store sale are done on an assortment that they don't even have in those stores. And that's really where we're going. We've got a test going in White House Black Market at Mall at Millenia, which is a new prototype store for us, where we have interactive terminals in there. So we've got tests going. We have -- in the Chico's brand, we have customer clienteling on iPads in test in stores. So there's quite a few things that we're doing and investments that we have made. I mean, big investments that we're making in betting on the way that the shopping behavior is changing, and we're going to be there to shop the way that she wants into the future. So I mean, I think that it is kind of the direction the customer is demanding that we go, and I would say that we certainly are trying to keep up with her, if not lead her a little bit. Gregory Baglione - Barclays Capital, Research Division: May I just add one follow-up? Sorry. David F. Dyer: Sure. Gregory Baglione - Barclays Capital, Research Division: On the Soma side of the business, could you maybe discuss in the quarter the cadence between -- in performance between some of your other older stores and newer stores? David F. Dyer: The older stores are performing as -- it's interesting, we haven't found kind of the peak or the plateau of our older stores yet. Our older stores tend to be the most profitable. And I can tell you the older the store is, it is -- it performs much more like the characteristics of our other 2 apparel brands. So it's the longer buildup ramp, which is -- it takes a while to change bra loyalty and to get her shopping. It takes more customers in the Chico store and more transactions to make work. But once you build that customer -- that customer following in a store, we haven't seen it plateau yet to where we're getting -- I mean, they're comping at the same rate -- the older stores are comping the same rate of our newest stores.

The next question will come from Simeon Siegel of Nomura Securities. Simeon A. Siegel - Nomura Securities Co. Ltd., Research Division: So just on the back of that Soma, first, I think you guys hinted Soma was breakeven last year. Can you talk about their EPS contribution this past year and then maybe what you think they could contribute going forward? And then, Pam, can you just remind us what cash cushion you typically like to hold on the balance sheet? And then the last thing, I'm sorry, if I misunderstood your last comment, did you say we should expect 100 basis points of SG&A deleverage? David F. Dyer: Pam, do you want to take it? Pamela K. Knous: Yes, I'll take -- I'll start, Simeon. Yes, what we did comment was that the investments that we're making in these very key strategic initiatives would impact the P&L by about 100 basis points. So that was one comment that we did make. As far as the cash or our liquidity levels, that's a something that we're continually evaluating. We're very comfortable with where we're at. And as Dave said, we have a key objective to return excess cash to shareholders, and that's something we're very mindful of and that we evaluate on a quarterly basis. And as we said, we feel comfortable with where we're at currently. The first question was around Soma profitability. David F. Dyer: Well, we actually made money last year. It wasn't breakeven. It was -- we have made money. Soma is now in the positive profit category, and we expect that to expand. I mean, I guess the way that you have to look at it is it takes a Soma store probably to pay back the investment is taking us over 3 years, 3 years or so to pay it back, whereas a Chico's or White House store will give us back cash in 1 year to 18 months. So it's a much longer ramp-up in the Soma stores. And if you look at proportion of new stores to the total fleet, it's also a higher percentage of stores that are not -- have not reached profitability in that brand as compared to other brands. So I guess that as long as we're in that growth mode, you would expect for it to not perform at the same profitability rate as our other brands. But I would say that if you wanted to stop all growth in that brand and wait for 3 years, it should -- 3 or 4 years, it should be more similar. Simeon A. Siegel - Nomura Securities Co. Ltd., Research Division: Okay, that makes sense. My apologies about the breakeven. In terms of the -- is it a higher online penetration at Soma than for the other concepts? David F. Dyer: It always has been there.

The next question will be from Betty Chen of Mizuho Securities. Betty Y. Chen - Mizuho Securities USA Inc., Research Division: I was wondering if you can talk a little bit about the relaunch of the Chico's loyalty program, Dave? I know you mentioned earlier maybe part of it is just reminding her how compelling the rewards are, but remind us what's been the purchasing pattern of that passport customer versus a non-loyalty member? And then in terms of looking forward to 2014, to your point, the company has a great track record of being innovative in terms of the merchandise and fabrication. What's getting you excited and the team excited about some of the innovations slated for 2014? David F. Dyer: Well, I would say let me start with some of the innovation first. I would say that -- let's start with the little engine that could, Soma. Soma has really -- for the first time, we're launching in March a new bra. This is a bra that usually takes us 2 years to do. We think it's some breakthrough technology. And from our wear test and from initial customer expectations, customer test panels, we believe that this is going to be a very, very substantial launch. We're backing it up with more television than we have had for this type of launched in a while. We have 2 things, other products that we've launched in Soma. We have the Vanishing Back demi. We were probably remiss in not having enough assortment in the smaller cups and smaller bands. We have taken care of that this year. But the Vanishing Back in the demi and a push-up and this new bra that we are launching, we'll start at 32A and I think it goes 32 to 36A and 38B is where that will start. And I think we're going to do a much better job. And it's not just in nude and black. It's going to be in color. It's going to be in print. You're going to have a full assortment. And I think that this will be a great way for Soma to attract even more customers. I mean, we've already launched the Vanishing Back demi. And just the online comments that we've got from -- and the reviews have been absolutely incredible. I think we're going to attract a whole new customer there. White House Black Market, in looking at their lines, I talked about in my comments that some of the real special kind of couture-like product that they've always had in their assortment. We probably got a little too carried away with basics and then that type of thing last year. The real special product is back. You can really see it in the stores with this delivery that's in there now. There's some beautiful special highly-detailed product that you're not going to find certainly in prices that we have or really would find outside of designer lines. Those are back. And I think that, that really does get me excited with what they're doing. And they're still building on some other things. They now have a -- the Instantly Slimming dress, we continue to get great response from. We now have a super slimming dress. I've forgotten exactly what they call it. I think it's Super Slimming or something. There are so many things that are going on. And the new Saint Honoré jean line that they launched, that was probably the best denim business that we've had that I can remember since I've been here. We completely redid the denim line in White House Black Market, and the customer is really responding. I mean, it is like more of the designer denim lines now. So it is -- a lot great things are going on. And I saw a new concept that I can't talk about, or Donna would kill me, that they are launching this fall that I think it's going to be really exciting, too. So great products in White House Black Market. And in Chico's, I think that Chico's is back. We probably got a little too career last year. A lot of our women do work, in Chico's, but what we found is they really don't want suitings. And we probably got a little too conservative in print, with not enough print and not enough color, and a little too monotone. And I think that we are back with that. Right now, we're selling wovens very well. We're about ready for launch, I think in the next week, the commercial on woven shirts, on white shirts and Long over Lean, which is great. This effortless that we've had is a huge program for us. We say work in it, go wild in it, do everything but wrinkle in it. So I think you're going to enjoy the TV commercial. So I think that we've got a great product going there. And of course, Boston Proper. Well, Boston Proper, I would like to say that we put that small, little organization through about as much of a wringer as anybody could. We probably, in retrospect, rolled out stores quicker than we should have. We should have let them absorb the new technology first. But we did what we did. And I think in the excitement of opening the stores and the success of the stores, we had to edit the assortment and we got a little too urban in the -- which was -- we edited the store assortment, and we walked away from the boho chic, which was really what that brand was built on. It was kind of a daring, casual, prints, dresses, color. I sat down with Sheryl last spring, and we looked through a book and it was nearly all black. And we said we both kind of came to the conclusion, wholly smokes, what's going on here? And we reacted quickly. I think you'll see the spring catalogs and the spring books progressively get better. We call it the return of sexy, and it is back and in full force, and the customer is responding positively to these books. Actually, we've had the best response that we've had in quite a while to the new catalog. And I think they keep getting better in spring. So merchandise assortment, if you look at it, I'm really excited about the product. We had reviews with our merchandise committee a couple of weeks ago, and we really felt we had the ammunition to not only compete, but to win. And so all of these things are converging together. And even though, last year gives you certainly time to pause and think, I would say that in some ways, it was great because we paused and we thought. I think we're going to come out stronger and more fired up than maybe we would have otherwise.

The next question will come from Susan Anderson of FBR Capital Markets.

It's Andrew Schmitt on from Susan. I was wondering if you can comment on the current promotional environment. Would you say that the promo environment in 1Q today is consistent with the level experienced in 4Q? And then also in Soma, do you see the operating margin at Soma being accretive to the total operating margin in 2014, or is that further down the road? David F. Dyer: I think that the fourth quarter promotional access was more than I had seen in a long, long time. I haven't -- since so far, going into spring, except for maybe clearance, as people clear out their inventories, but I think in spring, as we get into it as, again, competing on your product and on your fashion assortments. In fourth quarter, I mean, it really started, I think, with everybody going crazy pre-Thanksgiving, opening stores on Thanksgiving Day and I think they just created sales from here to there, thinking they were going to get more and they didn't. And so then that created, with the inventories that were built up for the season, a need to promote a lot more vigorously than perhaps they have in a while. I mean, it was just unbelievable out there and as a result, one of the interesting things that happened in the fourth quarter is outlet malls suffered in traffic. So why go to an outlet mall if you can get the same prices and on current merchandise in the regular malls? So it was a -- not a pretty picture for fall. And I hope that most retailers figured out that there's probably a better way to -- there's a better way to do business. Certainly, we believe it is for us. I just don't believe in lowering quality to create a higher initial markup so you can promote lower. I think that, that, again, is a short-term strategy that won't last. So we're going to do it our way and build for the long term and that's kind of where we're headed. I had forgotten there was another part of the question.

Operating margin for Soma and really, I think, Andrew, as we look at it there's dollars and percent, so clearly, we've moved to the stage where Soma is adding to profitability as they continue to grow and get scale. From a percent perspective, as Dave mentioned earlier, the older stores tend to perform right in line with our other apparel brands, and we're really encouraged by that. But as we're opening newer stores, it just takes time for them to ramp, and so that will kind of play out as we get further into Soma's maturity.

The next question will come from Neely Tamminga of Piper Jaffray. [p id="246932232" name="Kayla Berg" type="A" /> This is Kayla Berg. Just wondering how you guys are feeling about the currency of your inventory in terms of carryover heading into March by division? Do you guys see any hangover effect that could leak into spring? And if so, could those goods be cleared through the outlets and what should we expect from outlets as a result? David F. Dyer: You can handle that one. Pamela K. Knous: Yes, as I said, we feel very good about where our inventories are positioned. And actually somewhat as a reminder, our outlets really are very MFO focused. The cheapest brand has over 90% MFO for the year. White House Black Market made good progress and is about 70%. So we really look at that as a different business, not necessarily as a place to clear product. We do, do some clearance, but obviously, clearing in-store or online are also... David F. Dyer: Online is very important. Pamela K. Knous: Yes -- are also options for us. And so I think that we feel good about where we're at and I think the product will flow similar to as it has in the past.

Our next question will come from Brian Tunick of JPMorgan.

This is Dawn [ph] for Brian. You spoke in the accelerating shift to online and mobile by your customer. So I'm thinking, are you rethinking any of your longer-term footage growth targets, just given that the customer continues to shift their spending to that channel? And then also, if you spoke to 100 basis points of incremental SG&A spend in 2014. Should we think about the scene of peak investment yet? David F. Dyer: I think in terms of longer-term growth targets, I think that we've said that we've planned to open somewhere around 120 stores a year. And right now, as you looked at it, it's -- our store openings is leaning more towards our emerging brands. I mean, we only have 250 or so stores in White House Black Market. We've got 4 stores in Boston Proper. And obviously, we can build out those brands. So we are-- I think we're opening next year around 15 stores in Chico's and 25 in White House Black Market. That may even include international stores. I can't remember. Pamela K. Knous: No. David F. Dyer: No, it doesn't. And then we are certainly looking at international stores. So we think that in apparel, it's never going to be only e-commerce. This customer loves to shop both channels. And honestly, if it was only e-commerce, it wouldn't be good for apparel because the people who shop only in the e-commerce spend the less of any channel. The store customer, the store-only customer spends 2.5x the Internet-only customer. And the multichannel customer who does both stores and online spends 7x the Internet-only customer. You just can't -- people who shop online go in and buy an item, or go in and they're not building wardrobes. They're not -- it's just not -- it's just not the same. And people want to touch product, they want to feel it, they want to try it on. And I think there's always going to be a place for stores. Now we've looked at stores much differently for the last 4 or 5 years than other retailers may have. We believe in building very small, efficient stores. That's why we call them boutiques. We do not want large 6,000-, 7,000-, 10,000-square-foot boxes. That's just not us. All of our stores, if you look at emerging brands, Soma and Boston Proper, they're 2,500 feet or so or under. If you look at Chico's and White House, they generally are around 3,200 square feet. So again, our stores are designed to be small and efficient, and I think with an understanding that there is a channel shift. We want to be highly productive in our stores. And even with -- even if there is some shift back and forth, our stores will still be highly productive.

Our next question will come from Adrienne Tennant of Janney Capital Markets. Adrienne Tennant - Janney Montgomery Scott LLC, Research Division: My question is on adjusted the SG&A deleverage, just to clarify, is that -- is the deleveraging because of the softer top line, or are there specific investments? And if so, what exactly are those for 2014? And then to the extent that, Dave, you talked about kind of learnings from the 2013 holiday, so as you approach your inventory plan for the back half of the year, how have those changed or what's the strategy which you will kind of go into 2014 to mitigate margin risk go forward? David F. Dyer: Well, let's talk about going into the holiday of 2014. I mean, one of the things that we did as we looked at it last year, we did very well. I think if you remembered in our conference call going into the third quarter, we had a positive comps going into fourth quarter. And as we got up to Thanksgiving, we found a little decrease around Thanksgiving. We had terrific Green Monday. It was a record for us. So I think that we had a look at was the environment that happened from, say, Green Monday onward, where it got very, very promotional. And I think one of the things that we need to do and in our brands is to certainly get more or get our unfair share earlier in the quarter and then be competitive as we get into the December period. I will remind you that the fourth quarter is not our biggest quarter of the year as it is with most retailers. It is only our third best quarter or something like that.

It went back to fourth this year. David F. Dyer: Oh, fourth this year. Okay, it went back to fourth best quarter this year. So I think we need to understand how do compete a little better. I think there's things that we'll be doing with loyalty. There's events that we will be having with a little different cadence to them as we get into next year. And I think that we probably will have some more fashion deliveries bringing in the resort maybe a little earlier or additional fashion deliveries in the northern stores in the December time period to give us a better competing. I don't think that we want to compete in the 50-off arena. I don't think that, that takes you anywhere. And what it would take to do it by taking quality out of products to create that promotional environment that we'd have to be in. So we're -- it's under study. We know what we have to do. We're looking at it, and we're revising our plans, and I think that will have a better fourth quarter next year than we certainly had this year. Adrienne Tennant - Janney Montgomery Scott LLC, Research Division: Are you planning your inventory units down to create scarcity? David F. Dyer: If we looked at the inventory units as we came out of this on a square footage basis in the stores, we had negative, negative inventory on our stores. Our inventory increases were due to the additional stores that we're adding and were due to our bringing goods in early due to the Chinese New Year because if you don't, we wouldn't have gotten in the spring goods to be ready to go in February. So I think that we've managed inventory pretty well in stores. It really is not managing the quantity of inventory. I think, to me, it's the quality of inventory, meaning that we have to have what she wants. And if -- we went a little too basic, we didn't have enough color, we didn't enough pattern. And so I think we'll certainly make those corrections as we go into next year. Adrienne, you had another question in there somewhere? Adrienne Tennant - Janney Montgomery Scott LLC, Research Division: It was the SG&A, whether the deleverage is simply due to a softer top line or whether it's actual investments and, if so, where are they? David F. Dyer: You're talking about Q4? Adrienne Tennant - Janney Montgomery Scott LLC, Research Division: No, the deleverage of the 100 basis points for '14. Pamela K. Knous: Yes, so really what were just trying to give you there was the sense of the quantification of the expense hit of those items. As Dave commented, we expect to have sales growth next year. We expect to have positive comps, and we're really just giving you somewhat of a feel of the expense going forward [ph]. David F. Dyer: We're investing in international, we're investing in technology, we're investing in systems, we're investing in all sorts of things that are a little different. I went through the omni-channel retail. I mean, we've got lots of investments that we are putting in and, whether it's both development or this whole POS rollout, which is a huge expense as we go into late 2014 and '15 to complete the rollout. But those are the type of investments that we're doing. I mean, international -- we have the whole infrastructure with international, and we had 3 stores. Right. So, I guess, it's both fortunate and unfortunate that we made the investments when we did. Unfortunate in that when we did them, normally our business would cover those investments, but fortunate because we're positioned to really compete and be successful down the road.

All right. And, Denise, I think that we are probably out of time at this point, so I want to thank you, everybody, for participating today. For those of you who we were not able to get to, we do apologize, and as always I'm available for any follow-up necessary. So thank you, all, for joining us this morning, and we appreciate your continuing interest in Chico's FAS.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect.