Chico’s FAS, Inc. (CHS: chart) met analyst’s earnings expectations of 29 cents a share in the first quarter compared to 26 cents a share a year ago. Net income rose to $52 million from $47 million in the year-ago period. Revenue in the quarter increased 19.8% to $392 million from $327 million, which the company reports is a record. Adopting SFAS 123R for the first quarter had the effect of 2 cents per diluted share. In the past twelve months, the company’s stock has traded between approximately $29 and $48 a share.

Same-store sales increased 6.6%. Excluding direct sales, the Chico’s/Soma brand sales increased by 11% to $297 million from $268 million. Excluding direct sales, the WH|BM brand sales increased by 62% to $79 million from $49 million, while same-store sales for the brand increased in the mid 30% range, a continued trend of 5 consecutive years of double digit same-store sales increases. Direct sales through catalog and internet saw an overall 55% increase, mainly due to the addition of WH|BM, Fitigues, and a more prominent presence of the Soma merchandise in the company’s catalog and internet. The company’s Chico’s brand also saw a 19% increase in direct sales.

Selling, general and administrative expenses were increased by $3.5 million due to a stock-based compensation expense associated with the adoption of SFAS 123R. That adoption also reduced the gross margin by $1.4 million. The accounting change, overall, had the effect of reducing net income earnings per share for Q1 by $3.4 million and approximately 2 cents per diluted share.

During the quarter, overall inventories increased 21%, approximately in-line with the overall sales growth. Inventory per selling square foot rose slightly from $72 from $74 of inventory per selling square foot. The increase was due to the acquisition of Fitigues, expanded direct to consumer offerings for all four brands, and the increase in average point price and its related costs.

In Q1, 19 new stores were opened, 3 stores were closed, 1 franchised store was reacquired, and 11 new Fitigues chain stores were added. In addition 5 stores were also either expanded or relocated.

Guidance for the second quarter was not disclosed, however, the full fiscal year outlook includes earnings per share in the range of $1.20 to $1.26 per diluted share, the net of which includes a consideration of a compensation expense of 8 cents a share based on the adoption of SFAS 123R. This is a slight decrease from previous guidance of $1.23 to $1.26 a share for the fiscal year.

A 30% increase in the company’s selling square footage is planned during the fiscal year, which is expected to result from approximately 140 to 150 new stores and 60 to 65 relocations and expansions of existing stores. The company has increased the square footage growth plan for 2007 to 27%, an increase from its previous goal of 20%, with an estimated 165 to 190 new stores and 40 to 60 relocation and expansions of existing stores. The company operates 796 stores in 47 states.