Chico's Earnings Preview

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Investors hope Chico's FAS (NYS: CHS) will top analyst estimates once again after beating predictions by $0.01 in the previous quarter. The company will unveil its latest earnings on Wednesday, August 17. Chico's is a national specialty retailer of private branded, sophisticated, casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Chico's, with 11 of 18 rating it a buy and the remainder rating it a hold. Analysts don't like Chico's as much as competitor Ascena Retail Group overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $535.5 million in revenue this quarter. That would represent a rise of 15.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.24 per share. Estimates range from $0.22 to $0.25.

What our community says:
CAPS All Stars are solidly behind the stock, with 90.3% assigning it an "outperform" rating. The community at large backs the All Stars, with 87.8% giving it a rating of "outperform." Fools are keen on Chico's FAS and haven't been shy with their opinions lately, logging 443 posts in the past 30 days. Despite the majority sentiment in favor of Chico's FAS, the stock has a middling CAPS rating of three out of five stars.

Management:
Chico's profit has risen year over year by an average of 44.8% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters:

Quarter

Q1

Q4

Q3

Q2

Gross Margin

59.1%

53.2%

56.9%

55.7%

Operating Margin

13.6%

6.4%

9.1%

10.2%

Net Margin

8.5%

4.4%

6.0%

6.5%

One final thing: If you want to keep tabs on Chico's movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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