Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") should be read in conjunction with the unaudited condensed
consolidated financial statements and notes thereto included in this Quarterly
Report on Form 10-Q ("this Form 10-Q") and in our Annual Report on Form 10-K for
the fiscal year ended January 29, 2022, filed with the Securities and Exchange
Commission ("SEC") on March 15, 2022 ("2021 Annual Report on Form 10-K").

Executive Overview

  Chico's FAS is a Florida-based fashion company founded in 1983 on Sanibel
Island, Florida. The Company reinvented the fashion retail experience by
creating fashion communities anchored by service, which put the customer at the
center of everything we do. As one of the leading fashion retailers in North
America, Chico's FAS is a company of three unique brands - Chico's®, White House
Black Market® ("WHBM") and Soma® - each thriving in their own white space,
founded by women, led by women, providing solutions that millions of women say
give them confidence and joy. We sometimes refer to our Chico's and WHBM brands
collectively as our "Apparel Group." Our distinct lifestyle brands serve the
needs of fashion-savvy women with household incomes in the moderate to high
income level. We earn revenue and generate cash through the sale of merchandise
in our domestic retail stores, our various Company-operated e-commerce websites,
social commerce, our call center (which takes orders for all of our brands) and
through unaffiliated franchise partners.

  We utilize an integrated, omnichannel approach to managing our business. We
want our customers to experience our brands holistically and to view the various
commerce channels we operate as a single, integrated experience rather than as
separate sales channels operating independently. This approach allows our
customers to browse, purchase, return or exchange our merchandise through
whatever sales channel and at whatever time is most convenient. As a result, we
track total sales and comparable sales on a combined basis.

Our growth strategy is supported by the "power of three" unique brands and the
"power of three" commerce channels. Our physical stores serve as community
centers for entertainment, self-discovery and a home for interactions with our
store associate stylists and bra experts. Our digital stores serve as a first
impression of our brands and an efficient platform to teach and inspire our
customers about our merchandise. Our social brand ambassadors, which are a
combination of store associates, social media platform hosts and hyperlocal
social stylists who arrange events within their communities, are an additional
connection between our physical stores and digital.

Company Highlights

Company Highlights for the Thirteen Weeks Ended July 30, 2022 (the “Second Trimester”) include:

•Consistent strong results: Chico's FAS posted $0.34 net income per diluted
share for the second quarter, driven by strong comparable sales growth and
meaningful gross margin expansion. This performance was 62% over the thirteen
weeks ended July 31, 2021 ("last year's second quarter") and the Company's
highest-ever second quarter net income per diluted share.
•Powerful portfolio outperforming: For the second quarter, total Chico's FAS net
sales grew 18.4% and comparable sales increased 19.5% versus last year's second
quarter, led by the Company's apparel brands. Chico's and White House Black
Market ("WHBM") comparable sales grew 29.7% and 31.9%, respectively, in the
second quarter versus last year's second quarter. Compared to the thirteen weeks
ended August 3, 2019, all three brands delivered double-digit comparable sales
growth.

•Marketing drove traffic and new customers: Chico's FAS continued to elevate its
marketing, focusing more resources on digital. Strategic marketing efforts
continue to drive more customers to the Company's brands, with total
year-over-year customer count up mid-single digits, spend per customer up over
last year's second quarter and the average age of new customers continuing to
trend younger.

• Recently launched loyalty programs exceeding expectations: during the second quarter, Chico’s FAS launched its new loyalty programs at Chico’s and WHBM. Customer sentiment and refund rates are exceeding expectations, and newly launched programs are increasing purchase frequency.

•Gross margin expansion: The second quarter gross margin rate rose to 41.4%,
outperforming last year's second quarter by 300 basis points. Higher average
unit retail and full-price sales combined with inbound freight and occupancy
leverage was partially offset by elevated raw material costs.

•Double-digit operating margin: Income from operations for the second quarter
was $58.2 million, or 10.4% of net sales, driven by strong sales growth and
gross margin expansion, partially offset by planned increased selling, general
and administrative expenses ("SG&A"), including labor and marketing.
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Financial results

Diluted earnings per share for the second quarter were $0.34 compared to the diluted earnings per share of $0.21 for the second quarter of last year.

Diluted earnings per share for the twenty-six weeks ended July 30, 2022 has been $0.62
compared to the diluted earnings per share of $0.14 for twenty-six weeks completed
July 31, 2021.

Select financial results

The following table presents certain financial results for the thirteen and twenty-six weeks ended July 30, 2022 and July 31, 2021:

                                          Thirteen Weeks Ended                          Twenty-Six Weeks Ended
                                  July 30, 2022          July 31, 2021          July 30, 2022           July 31, 2021
                                                        (in millions, except per share amounts)
Net sales                        $        559          $          472          $       1,100          $          860

Income from operations                     58                      36                    104                      28
Net income                                 42                      26                     77                      17
Net income per common and common
equivalent share - diluted               0.34                    0.21                   0.62                    0.14


Current Trends

The ongoing pandemic has resulted in significant challenges across our business
starting in March 2020 and is expected to continue to disrupt our business
operations in fiscal 2022 to varying degrees. In response to the pandemic, many
of our markets imposed limitations, varying by market and in frequency, on the
access to the Company's store fleet, including temporary store closures and/or a
reduction in hours, staffing and capacity. We continue to focus on evolving
consumer demand emerging from the pandemic experience and have accelerated our
transformation to a digital-first company, fast-tracking numerous innovation and
technology investments across all three of our brands.

While most government and health authority restrictions have lifted, we expect
continued uncertainty and volatility on our business operations, operating
results and operating cash flows as the ongoing macro challenges of the
pandemic, supply chain, economic uncertainty and health concerns associated with
the pandemic and war in Ukraine continue to affect, among other things, consumer
behavior, spending levels and shopping preferences.

Overall economic uncertainty is also affecting consumer behavior. Consumers are
experiencing an overall increase in the cost of living and are shifting their
spending habits away from discretionary items. In particular, the rise in fuel
and grocery costs has had a widespread impact on how consumers are prioritizing
their spending. Inflation caused by the pandemic and geopolitical conditions,
such as the war in Ukraine, also has contributed to economic concerns including
cost of raw materials and products, fuel and freight costs, and labor costs, and
is also affecting consumer confidence and spending habits.

The Company remains confident that it currently has sufficient liquidity to
repay its obligations as they become due for the foreseeable future as the
Company continues to drive operational efficiency and effectiveness, including
ongoing expense management and actively managing its inventory positions and
production calendar to mitigate the macro challenges of the pandemic, supply
chain and economic uncertainty. However, the extent to which the pandemic,
geopolitical events and overall economic uncertainty caused by the same impacts
our business operations, financial results, and liquidity will depend on
numerous evolving factors that we may not be able to accurately predict or
assess, including the duration and scope of the pandemic, rising inflation
and/or geopolitical conditions; our response to and ability to mitigate the
impacts of the pandemic, inflation and geopolitical conditions; the negative
impact the pandemic, inflation and geopolitical conditions have on global and
regional economies and economic activity, including the duration and magnitude
of their impacts on unemployment rates and consumer discretionary spending,
among other items; their short- and longer-term impact on the levels of consumer
confidence; the ability of our suppliers, vendors and customers to successfully
address the impacts of the pandemic, inflation and geopolitical conditions;
supply chain disruptions; actions governments, businesses and individuals take
in response to the pandemic, inflation and geopolitical conditions; how quickly
economies recover after the pandemic, inflation and geopolitical conditions
subside, if at all; and our response to and ability to mitigate the impact of
heightened concerns over a possible recession.

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Outlook for the third quarter and fiscal year 2022

For the third quarter of fiscal 2022, the Company currently expects:

• Consolidated net sales of $495 million at $510 million;

•Gross margin rate as a percentage of net sales from 38.9% to 39.4%;

•SG&A as a percentage of net sales from 34.4% to 34.8%;

•Effective tax rate of 25.0%; and

• Diluted earnings per share of $0.11 at $0.14.

For fiscal year 2022, the Company currently expects:

• Consolidated net sales of $2,140 million at $2,170 million;

•Gross margin rate as a percentage of net sales from 38.8% to 39.1%;

•SG&A as a percentage of net sales from 32.2% to 32.5%;

•Effective tax rate of 25.0%;

• Diluted earnings per share of $0.79 at $0.87; and

• Capital and cloud expenditure of approximately $65 million at $70 million.

Key performance indicators

  In assessing the performance of our business, we consider a variety of key
performance and financial measures to evaluate our business, develop financial
forecasts and make strategic decisions. These key measures include comparable
sales, gross margin as a percent of sales, diluted income per share and return
on net assets ("RONA"). In light of the pandemic, we have shifted our focus to
effectively manage our liquidity position, including aligning our operating cost
structure with expected sales. We will continue to evaluate our other key
performance and financial measures in addition to our liquidity position. The
following describes these measures.

Liquidity

  Liquidity is measured through cash flow, which is the measure of cash provided
by or used in operating, investing and financing activities. We believe that as
a result of the Company's extensive measures to mitigate the impact of the
pandemic discussed above, we were able to, and continue to, effectively manage
our liquidity position.

Comparable Sales

  Comparable sales is an omnichannel measure of the amount of sales generated
from products the Company sells directly to the consumer relative to the amount
of sales generated in the comparable prior-year period. Comparable sales is
defined as sales from stores open for the preceding twelve months, including
stores that have been expanded, remodeled or relocated within the same general
market and includes online and catalog sales, and beginning in the third quarter
of fiscal 2019, includes international sales. The comparable sales calculation
excludes the negative impact of stores closed four or more days. The Company
views comparable sales as a key performance indicator to measure the performance
of our business, however, we are not providing comparable sales figures for the
thirteen and twenty-six weeks ended July 31, 2021 compared to the thirteen and
twenty-six weeks ended August 1, 2020 as we do not believe it is a meaningful
measure due to the varying degrees of business disruptions and periods of store
closures and/or stores operating at reduced hours as a result of the pandemic
during fiscal 2020.

Gross margin as a percentage of Net sales

  Gross margin as a percentage of net sales is computed as gross margin divided
by net sales. We believe gross margin as a percentage of net sales is a primary
metric to measure the performance of our business as it is used to determine the
value of incremental sales, and to guide pricing and promotion decisions.
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  Diluted Income per Share

  Income per share is determined using the two-class method when it is more
dilutive than the treasury stock method. Basic income per share is computed by
dividing net income available to common shareholders by the weighted-average
number of common shares outstanding during the period, including participating
securities. Diluted income per share reflects the dilutive effect of potential
common shares from non-participating securities such as stock options,
performance stock units and restricted stock units. Whereas basic income per
share serves as an indicator of the Company's profitability, we believe diluted
income per share is a key performance measure because it gauges the Company's
quality of income per share assuming all potential common shares from
non-participating securities are exercised.

Return on net assets

  RONA is defined as (a) net income divided by (b) the "five-point average"
(based on balances at the beginning of the first quarter plus the final balances
for each quarter of the fiscal year) of net working capital less cash and
marketable securities plus fixed assets. We believe RONA is a primary metric as
it helps to determine how well the Company is utilizing its assets. As such, a
higher RONA could indicate that the Company is using its assets and working
capital efficiently and effectively.

Our business strategy

  Our overall business strategy is focused on building a collection of distinct
high-performing retail brands primarily serving the fashion needs of women with
moderate to high household income levels.

In fiscal 2020, the Company took actions to rapidly transform into a
digital-first company, fast-tracking numerous innovation and digital technology
investments, and we have continued those investments in fiscal 2022. We have
also enhanced our marketing efforts to drive traffic and new customers to our
brands, while retaining newly acquired customers at a meaningfully higher rate
than the pre-pandemic year of fiscal 2019.

The primary function of the Company is the production and procurement of
beautiful merchandise that delivers the brand promise and brand positioning of
each of our brands and resonates with customers. To that end, we continue to
strengthen our merchandise and design capabilities and enhance our sourcing and
supply chain to deliver product in a timely manner to our customers while also
concentrating on improvements to the quality and aesthetic of our merchandise.
Over the long term, we may build our brand portfolio by organic development or
acquisition of other specialty retail concepts if research indicates that the
opportunity complements our current brands and is appropriate and in the best
interest of our shareholders.

We pursue improving the performance of our brands by building our omnichannel
capabilities, growing our online presence, managing our store base, executing
marketing plans, effectively leveraging expenses, considering additional sales
channels and markets, and optimizing the merchandise offerings of each of our
brands. We continue to invest heavily in our omnichannel capabilities so our
customers can fully experience our brands in the manner they choose.

We view our stores and Company-operated e-commerce websites as a single,
integrated sales function rather than as separate, independently operated sales
channels. As a result, we maintain a shared inventory platform for our primary
operations, allowing us to fulfill orders for all channels from our distribution
center ("DC") in Winder, Georgia. Our domestic customers can return merchandise
to a store or to our DC, regardless of the original purchase location. Using our
enhanced "Locate" tool, we ship in-store orders from other locations directly to
the customer, expediting delivery times while reducing our shipping costs. In
addition, our shared inventory system, Endless Aisle, enables customers to make
purchases online and ship from store. In fiscal 2019, we completed the
implementation of our Buy On-Line, Pick-up In-Store (BOPIS) capability across
all our brands, further enhancing our omnichannel capabilities, and in fiscal
2020, we completed the implementation of StyleConnect® and MY CLOSETTM, our
customized, branded, digital styling software tools that enable us to
communicate directly with the majority of our customers, to drive the frontline
business to digital fulfillment.

We seek to acquire new customers and retain existing customers by leveraging
existing customer-specific data and through targeted marketing, including
digital marketing, social media, television, catalogs and mailers. We seek to
optimize the potential of our brands with innovative product offerings,
potential new merchandise opportunities, and brand extensions that enhance the
current offerings, as well as through our continued emphasis on our trademark
"Most Amazing Personal Service" standard. We also will continue to consider
potential alternative sales channels for our brands, including international
franchise, wholesale, licensing and other opportunities.

We continue to leverage our digital investments to convert single-channel customers into omni-channel or multi-channel customers, as the average omni-channel customer spends more than three times the average single-channel customer.

We have four clearly defined strategic pillars that have guided our turnaround strategy since 2019 and will continue to guide us in the future.

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  Table of Contents

1. Customer led;

2.Product obsessed;

3.Digital-first; and

4.Operationally excellent.
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Operating results

Thirteen weeks over July 30, 2022 Compared to the thirteen weeks ended July 31, 2021

Net income and diluted earnings per share

For the second quarter, the Company reported net income of $42 million, or $0.34
per diluted share, compared to net income of $26 million, or $0.21 per diluted
share, in last year's second quarter.

Net sales

The following table depicts net sales by Chico's, WHBM and Soma in dollars and
as a percentage of total net sales for the thirteen weeks ended July 30, 2022
and July 31, 2021:

                                                  Thirteen Weeks Ended
                                      July 30, 2022                     July 31, 2021

                                                  (dollars in millions)

           Chico's           $     282                50.4  %    $        221        46.9  %
           WHBM                    159                28.4                122        25.9
           Soma                    118                21.2                129        27.2

           Total Net Sales   $     559               100.0  %    $        472       100.0  %


For the second quarter, net sales were $559 million compared to $472 million in
last year's second quarter. This 18.4% improvement primarily reflects a
comparable sales increase of 19.5%, partially offset by 26 permanent net store
closures since last year's second quarter. The 19.5% comparable sales
improvement was driven by an increase in transaction count and higher average
dollar sale.

The following table depicts comparable sales percentages by Chico's, WHBM and
Soma for the second quarter:
                                         Thirteen Weeks Ended (1)
                                              July 30, 2022
                     Chico's                               29.7  %
                     WHBM                                  31.9
                     Soma                                  (9.2)
                     Total Company                         19.5


(1) The Company is not providing comparable sales figures for last year's second
quarter compared to the thirteen weeks ended August 1, 2020 as we do not believe
it is a meaningful measure due to the significant impacts of the pandemic during
fiscal 2020.

Cost of goods sold/gross margin

The following table shows the cost of goods sold (“COGS”) and gross profit in dollars and gross profit as a percentage of total net sales for the thirteen weeks ended July 30, 2022 and July 31, 2021:

                                                Thirteen Weeks Ended
                                      July 30, 2022               July 31, 2021

                                                (dollars in millions)
           Cost of goods sold        $        327                $        291
           Gross margin                       232                         181
           Gross margin percentage           41.4   %                    38.4  %


For the second quarter, gross margin was $232 million, or 41.4% of net sales,
compared to $181 million, or 38.4% of net sales, in last year's second quarter.
The 300 basis point improvement in gross margin rate primarily reflects higher
average unit retail and full price sales combined with inbound freight and
occupancy leverage, partially offset by higher raw material costs.
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Selling, general and administrative expenses

The following table shows general and administrative expenses, which include direct and store operating expenses, marketing expenses, and National Store Support Center (“NSSC”) expenses, in dollars and as a percentage of total net sales for the thirteen weeks ended July 30, 2022 and July 31, 2021:

                                                          Thirteen Weeks Ended
                                                July 30, 2022               July 31, 2021

                                                          (dollars in millions)
Selling, general and administrative expenses   $        173                $        146
Percentage of total net sales                          31.0   %             

30.9%


  For the second quarter, SG&A was $173 million, or 31.0% of net sales, compared
to $146 million, or 30.9% of net sales, for last year's second quarter,
primarily reflecting planned marketing investments and elevated labor costs,
partially offset by ongoing expense management.

Income taxes

  For the second quarter, the $15.2 million income tax provision resulted in an
effective tax rate of 26.6% compared to $7.7 million, or an effective tax rate
of 22.7%, for last year's second quarter. The 26.6% effective tax rate for
the second quarter primarily reflects the impact of losses in foreign
jurisdictions on which a full valuation allowance is recorded. The 22.7%
effective tax rate for last year's second quarter primarily reflects a change in
the estimate from the first quarter of fiscal 2021 due to an increase in the
Company's projected annual pre-tax income and an increase in annual projected
deferred tax assets on which a full valuation allowance exists, partially offset
by the impact of the annual loss projected during the first quarter of fiscal
2021.

Twenty-six weeks over July 30, 2022 Compared to the twenty-six weeks ended
July 31, 2021

Net income and diluted earnings per share

  For the twenty-six weeks ended July 30, 2022, the Company reported net income
of $77 million, or $0.62 per diluted share, compared to net income of $17
million, or $0.14 per diluted share, for the twenty-six weeks ended July 31,
2021.

Net Sales

The following table depicts net sales by Chico's, WHBM and Soma in dollars and
as a percentage of total net sales for the twenty-six weeks ended July 30, 2022
and July 31, 2021:

                                                 Twenty-Six Weeks Ended
                                      July 30, 2022                      July 31, 2021

                                                 (dollars in millions)
         Chico's           $        546                49.7  %    $        398        46.3  %
         WHBM                       328                29.8                226        26.3
         Soma                       226                20.5                236        27.4

         Total net sales   $      1,100               100.0  %    $        860       100.0  %


Net sales for the twenty-six weeks ended July 30, 2022 increased to $1,100
million from $860 million for the twenty-six weeks ended July 31, 2021. This
27.9% improvement primarily reflects a comparable sales increase of 28.9%,
partially offset by 26 permanent net store closures since last year's second
quarter. The 28.9% comparable sales improvement was driven by an increase in
transaction count and higher average dollar sale.
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The following table shows comparable sales percentages by Chico’s, WHBM and Soma for the twenty-six weeks ended July 30, 2022:

                                        Twenty-Six Weeks Ended (1)
                                              July 30, 2022
                    Chico's                                 39.6  %
                    WHBM                                    47.0
                    Soma                                    (5.7)
                    Total Company                           28.9


(1) The Company is not providing comparable sales figures for the twenty-six
weeks ended July 31, 2021 compared to the twenty-six weeks ended August 1, 2020
as we do not believe it is a meaningful measure due to the significant impacts
of the pandemic during fiscal 2020.

Cost of goods sold/gross margin

The following table depicts COGS and gross margin in dollars and gross margin as
a percentage of total net sales for the twenty-six weeks ended July 30, 2022 and
July 31, 2021:

                                               Twenty-Six Weeks Ended
                                     July 30, 2022                July 31, 2021

                                               (dollars in millions)
          Cost of goods sold        $       652                  $        552
          Gross margin                      448                           308
          Gross margin percentage          40.7   %                      

35.8%


Gross margin for the twenty-six weeks ended July 30, 2022 was $448 million, or
40.7% of net sales, compared to $308 million, or 35.8% of net sales, for the
twenty-six weeks ended July 31, 2021. The 490 basis point improvement in gross
margin rate primarily reflects higher average unit retail and full price sales
combined with occupancy leverage, partially offset by increased raw material
costs.

Selling, general and administrative expenses

The following table depicts SG&A, which includes store and direct operating
expenses, marketing expenses and NSSC expenses, in dollars and as a percentage
of total net sales for the twenty-six weeks ended July 30, 2022 and July 31,
2021:

                                                                                Twenty-Six Weeks Ended
                                                                        

July 30, 2022 July 31, 2021

                                                                                (dollars in millions)
Selling, general and administrative expenses                            $        344           $        280
Percentage of total net sales                                                   31.3   %               32.5  %


For the twenty-six weeks ended July 30, 2022, SG&A was $344 million, or 31.3% of
net sales, compared to $280 million, or 32.5% of net sales, for the twenty-six
weeks ended July 31, 2021. The decrease in SG&A as a percent of total net sales
primarily reflects sales leverage and ongoing expense management.

Income taxes

The effective tax rate for the twenty-six weeks ended July 30, 2022 and July 31,
2021 was 24.3% and 30.0%, respectively. The 24.3% for the twenty-six weeks ended
July 30, 2022 primarily reflects a favorable share-based compensation benefit
and a reduction in the liability for future deferred tax liabilities. The
effective tax rate of 30.0% for the twenty-six weeks ended July 31, 2021
primarily reflects a change in estimate from the first quarter of fiscal 2021
due to an increase in the Company's projected annual pre-tax income and an
increase in annual projected deferred tax assets on which a full valuation
allowance exists, partially offset by the impact of the annual loss projected
during the first quarter of fiscal 2021 and favorable state audit settlements.
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Cash, Marketable securities and debt

At the end of the second quarter, cash and marketable securities totaled $173
million compared to $137 million at the end of last year's second quarter. Debt
at the end of the second quarter totaled $99 million compared to $149 million at
the end of last year's second quarter.

Inventories

  At the end of the second quarter, inventories totaled $339 million compared to
$202 million at the end of last year's second quarter. The $137 million increase
over last year's second quarter primarily reflects elevated in-transit
inventories and early receipts to mitigate supply chain disruptions. On-hand
inventories, adjusted for early fall receipts, increased 25.0% year-over-year to
more align with higher consumer demand.

Income tax receivable

  At the end of the second quarter, our unaudited condensed consolidated balance
sheet reflected an $11 million income tax receivable related to the recovery of
Federal income taxes paid in prior years and other tax law changes as a result
of the Coronavirus Aid, Relief, and Economic Security Act.


Cash and capital resources

The Company's material cash requirements include amounts outstanding under
operating leases; open purchase orders for inventory and other operating
expenses in the normal course of business; contractual commitments for future
capital expenditures; long-term debt obligations; and interest payments on
long-term debt. Our ongoing capital requirements will continue to be primarily
for enhancing and expanding our omnichannel capabilities, including investments
in our stores; information technology; and supply chain.

In response to the pandemic, the Company has taken actions to reinforce its
financial position and liquidity. Specific actions include: significantly
reducing capital and expense structures, centralizing key functions to create a
more nimble organization to better align costs with expected sales; suspending
the quarterly dividend commencing April 2020; aligning inventory receipts with
expected demand; partnering with suppliers and vendors to reduce operating costs
and extend payment terms; and reviewing real estate and actively negotiating
with landlords to deliver rent relief in the form of reductions, abatements and
other concessions. In October 2020 and February 2022, the Company amended and
extended its credit facility to strengthen its liquidity and enhance its
financial stability.

The Company anticipates satisfying its material cash requirements from its cash
flows from operating activities, our cash on hand, capacity within our credit
facility and other liquidity options.

The following table summarizes the cash flows for the period since the beginning of the year July 30, 2022 compared to the cumulative period of last year July 31, 2021:

Twenty-six weeks over

                                                                      July 

30, 2022 July 31, 2021

                                                                            (dollars in millions) (1)
Net cash provided by operating activities                            $         76          $           34
Net cash (used in) provided by investing activities                           (25)                      2
Net cash used in financing activities                                          (8)                     (1)

Net increase in cash and cash equivalents                            $         42          $           36


(1) May not work due to rounding.

Operational activities

Net cash provided by operating activities for the year-to-date period of fiscal
2022 was $76.0 million compared to $34 million in last year's year-to-date
period. The change in net cash provided by operating activities primarily
reflects higher net income and rent settlements made in last year's year-to-date
period, partially offset by elevated inventories and income tax refunds received
in last year's year-to-date period.
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Investing activities

Net cash used in investing activities for the cumulative period of fiscal year 2022 was $25 million compared to net cash provided by investing activities of $2 million since the beginning of last year, reflecting a clear $23 million
increase in negotiable securities and a $5 million increase in capital expenditure.

Fundraising activities

Net cash used in financing activities for the year-to-date period of fiscal 2022
was $8 million compared to $1 million in last year's year-to-date period,
primarily reflecting $7 million in payments of tax withholding related to the
vesting of share-based awards.

Credit facility

On February 2, 2022, the Company and certain material domestic subsidiaries
entered into Amendment No. 2 (the "Amendment") to its credit agreement (as
amended, the "Credit Agreement") originally entered into on August 2, 2018 and
amended October 30, 2020, by and among the Company, certain material domestic
subsidiaries as co-borrowers and guarantors, Wells Fargo Bank, National
Association ("Wells Fargo Bank"), as Agent, letter of credit issuer and swing
line lender, and certain lenders party thereto. Our obligations under the Credit
Agreement are guaranteed by the guarantors and are secured by a first priority
lien on certain assets of the Company and certain material domestic
subsidiaries, including inventory, accounts receivable, cash deposits, certain
insurance proceeds, real estate, fixtures and certain intellectual property. The
Credit Agreement provides for a five-year asset-based senior secured revolving
loan ("ABL") and letter of credit facility of up to $285.0 million, maturing
February 2, 2027. The interest rate applicable to Term Secured Overnight
Financing Rate ("SOFR") Loans drawn under the ABL is equal to Term SOFR plus
1.60% (subject to a further decrease to Term SOFR plus 1.35% or an increase to
Term SOFR plus 1.85% based upon average quarterly excess availability under the
ABL). The Credit Agreement also provides for a $15.0 million first-in last-out
("FILO") loan. The interest rate applicable to the FILO is equal to Term SOFR
plus 3.60% (subject to a further decrease to Term SOFR plus 3.35% or an increase
to Term SOFR plus 3.85% based on average quarterly excess availability under the
FILO). However, for any ABL or FILO with a SOFR interest rate period of six
months, the interest rate applicable to the ABL and FILO is increased by 30
basis points.

The Credit Agreement contains customary representations, warranties, and
affirmative covenants, as well as customary negative covenants, that, among
other things restrict, subject to certain exceptions, the ability of the Company
and certain of its domestic subsidiaries to: (i) incur liens, (ii) make
investments, (iii) issue or incur additional indebtedness, (iv) undergo
significant corporate changes, including mergers and acquisitions, (v) make
dispositions, (vi) make restricted payments, (vii) prepay other indebtedness and
(viii) enter into certain other restrictive agreements. The Company may pay cash
dividends and repurchase shares under its share buyback program, subject to
certain thresholds of available borrowings based upon the lesser of the
aggregate amount of commitments under the Credit Agreement and the borrowing
base, determined after giving effect to any such transaction or payment, on a
pro forma basis. In addition, the Company must pay a commitment fee per annum on
the unused portion of the commitments under the Credit Agreement.

As of July 30, 2022, $99.0 million in net borrowings were outstanding under the
Credit Agreement. Availability under the Credit Agreement is determined based
upon a monthly borrowing base calculation which includes eligible credit card
receivables, real estate and inventory, less outstanding borrowings, letters of
credit and certain designated reserves. As of July 30, 2022, the available
additional borrowing capacity under the Credit Agreement was approximately
$188.0 million, inclusive of the current loan cap of $30.0 million.

Store and franchise activity

During the twenty-six weeks ended July 30, 2022, we had 8 permanent net store
closures, consisting of 5 Chico's store closures, 5 WHBM store closures and 2
Soma net store openings. As of July 30, 2022, the Company's franchise operations
consisted of 58 international retail locations in Mexico and 2 domestic airport
locations.

Stores continue to be an important part of our omnichannel strategy, and digital
sales are higher in markets where we have a retail presence, but we intend to
optimize our real estate portfolio, reflecting our emphasis on digital and our
priority for higher profitability standards. We will continue to adjust our
store base to align with these standards, primarily as leases come due, lease
kickouts are available, or buyouts make economic sense. We closed net 8
underperforming locations during the twenty-six weeks ended July 30, 2022 and
ended the second quarter with 1,258 boutiques. The Company anticipates closing
approximately 30 stores in fiscal 2022, which primarily includes
underperforming, mall-based Chico's and WHBM boutiques. We also plan to invest
in opening over 20 additional Soma stores this fiscal year. We will continue to
evaluate our store base in light of economic conditions and our business
strategy and may adjust the openings and closures as conditions require or as
opportunities arise.
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Critical accounting estimates

The discussion and analysis of our financial condition and results of operations
are based upon the condensed consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of condensed consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenue, expenses and related disclosure of contingent
assets and liabilities. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. Management has discussed the development and
selection of these critical accounting estimates with the Audit Committee of our
Board of Directors and believes the assumptions and estimates, as set forth in
our 2021 Annual Report on Form 10-K, are significant to reporting our results of
operations and financial position. There have been no material changes to our
critical accounting estimates as disclosed in our 2021 Annual Report on Form
10-K.


Forward-Looking Statements
This Form 10-Q may contain statements concerning our current expectations,
assumptions, plans, estimates, judgments and projections about our business and
our industry and other statements that are not historical facts. These are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. In most cases, words or phrases such as "aim,"
"anticipates," "believes," "confident," "could," "estimates," "expects,"
"intends," "target," "will," "plans," "path," "should," "assumptions," "outlook"
and similar expressions identify forward-looking statements. These
forward-looking statements are based largely on information currently available
to our management and are subject to various risks and uncertainties that could
cause actual results to differ materially from historical results or those
expressed or implied by such forward-looking statements. Although we believe our
expectations are based on reasonable estimates and assumptions, they are not
guarantees of performance. There is no assurance that our expectations will
occur or that our estimates or assumptions will be correct, and we caution
investors and all others not to place undue reliance on such forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those described in Item 1A, "Risk Factors" in our most
recent Annual Report on Form 10-K and, from time to time, in Item 1A, "Risk
Factors" of our Quarterly Reports on Form 10-Q and the following:

•the effects of the pandemic, including uncertainties about its depth and
duration, new variants of COVID-19 that have emerged, the speed, efficacy and
availability of vaccines and treatments, its impact on general economic
conditions, human capital management, consumer behavior and discretionary
spending, the effectiveness of any actions taken in response to the pandemic,
and the impact of the pandemic on our manufacturing operations, shipping costs
and timelines and the global supply chain;
•the ability of our suppliers, logistics providers, vendors and landlords, to
meet their obligations to us in light of financial stress, labor shortages,
liquidity challenges, bankruptcy filings by other industry participants, and
supply chain and other disruptions;
•increases in unemployment rates and labor shortages;
•our ability to sufficiently staff our retail stores;
•changes in general economic conditions, including, but not limited to, consumer
confidence and consumer spending patterns;
•the impact of inflation on consumer spending;
•market disruptions including pandemics or significant health hazards, severe
weather conditions, natural disasters, terrorist activities, financial crises,
political crises, war and other military conflicts (such as the war in Ukraine)
or other major events, or the prospect of these events, including their impact
on consumer spending, inflation, and the global supply chain;
•shifts in consumer behavior, and our ability to adapt, identify and respond to
new and changing fashion trends and customer preferences, and to coordinate
product development with buying and planning;
•changes in the general or specialty retail or apparel industries, including
significant decreases in market demand and the overall level of spending for
women's private branded clothing and related accessories;
•our ability to secure and maintain customer acceptance of in-store and online
concepts and styles;
•increased competition in the markets in which we operate, including our ability
to remain competitive with customer shipping terms and costs;
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•decreases in customer traffic at our stores;
•fluctuations in foreign currency exchange rates and commodity prices;
•significant increases in the costs of manufacturing, raw materials,
transportation, importing, distribution, labor and advertising;
•decreases in the quality of merchandise received from suppliers and increases
in delivery times for receiving such merchandise;
•our ability to appropriately manage our store fleet, including the closing of
underperforming stores and opening of new stores, and our ability to achieve the
expected results of any such store openings or store closings;
•our ability to appropriately manage inventory and allocation processes and
leverage targeted promotions;
•our ability to maintain cost saving discipline;
•our ability to operate our retail websites in a profitable manner;
•our ability to successfully identify and implement additional sales and
distribution channels;
•our ability to successfully execute and achieve the expected results of our
business, brand strategies, brand awareness programs, and merchandising and
marketing programs including, but not limited to, the Company's turnaround
strategy, retail fleet optimization plan, sales initiatives, multi-channel
strategies and five operating priorities which are: 1) continuing our ongoing
digital transformation; 2) further refining product through fit, quality, fabric
and innovation in each of our brands; 3) driving increased customer engagement
through marketing; 4) maintaining our operating and cost discipline; and 5)
further enhancing the productivity of our real estate portfolio;
•our ability to utilize our NSSC, DC and other support facilities in an
efficient and effective manner;
•our reliance on sourcing from foreign suppliers and significant adverse
economic, labor, political or other shifts (including adverse changes in
tariffs, taxes or other import regulations, particularly with respect to China,
or legislation prohibiting certain imports from China);
•U.S. and foreign governmental actions and policies and changes thereto;
•the continuing performance, implementation and integration of our management
information systems;
•our ability to successfully update our information systems;
•the impact of any system failure, cyber security or other data security
breaches, including any security breaches resulting in the theft, transfer, or
unauthorized disclosure of customer, employee, or company information;
•our ability to comply with applicable domestic and foreign information security
and privacy laws, regulations and technology platform rules or other obligations
related to data privacy and security;
•our ability to attract, hire, train, motivate and retain qualified employees in
an inclusive environment;
•our ability to successfully recruit leadership or transition members of our
senior management team;
• increased public focus and opinion on environmental, social and governance
("ESG") initiatives and our ability to meet any announced ESG goals and
initiatives;
•future unsolicited offers to buy the Company and actions of activist
shareholders and others and our ability to respond effectively;
•our ability to secure and protect our intellectual property rights and to
protect our reputation and brand images;
•unanticipated obligations or changes in estimates arising from new or existing
litigation (including settlements thereto), income taxes and other regulatory
proceedings;
•unanticipated adverse changes in legal, regulatory or tax laws; and
•our ability to comply with the terms of our Credit Agreement, including the
restrictive provisions limiting our flexibility in operating our business and
obtaining additional credit on commercially reasonable terms.

These factors should be considered in evaluating forward-looking statements
contained herein. All forward-looking statements that are made or attributable
to us are expressly qualified in their entirety by this cautionary notice. The
forward-looking statements included herein are only made as of the date of this
Form 10-Q. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.



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