Chico's Shares Jumped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of clothing retailer Chico's FAS (NYS: CHS) were dressed to the nines and charging higher today as investors boosted the shares as much as 18% in intraday trading after the company reported fourth-quarter earnings.

So what: If consumers aren't out shopping more, you wouldn't know it by looking at Chico's fourth-quarter numbers. For the quarter, the company notched total sales of $569 million, up nearly 20% from the prior year. Earnings per share, meanwhile, registered a 25% increase, to $0.15. Wall Street expected the company to earn just $0.11 per share on $547 million in revenue.

The top line was helped by an 8.7% jump in comparable-store sales. Operating margins increased and the company reduced share count by buying back its own shares, which helped drive the strong bottom-line results.

Now what: Not content to stop at reporting great past results, Chico's also gave a strong outlook for the year ahead. The company said it expects sales of roughly $2.5 billion, above the current analysts' estimate of $2.4 billion. Management also projected that declines in sales, general, and administrative spending would help offset further gross margin pressures.

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At the time thisarticle was published Fool contributorMatt Koppenhefferdoes not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter@KoppTheFoolorFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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