Oppenheimer Initiates Coverage On Chico's FAS With A Perform Rating

Oppenheimer is initiating coverage on Chico's FAS, Inc.

with a Perform rating. “We are encouraged by progress in its key initiatives, which include: rebuilding the Chico's brand, expanding the WHBM and Soma divisions, growing DTC, cost structure/systems enhancements, and customer service,” Oppenheimer writes. “However, we believe the success of these efforts is largely anticipated while more difficult comparisons, potentially increased promotions, sourcing pressures and premature acceleration of store openings are not. “Moreover, we think management's stated goal of $1 in FY11 EPS could be aggressive. Thus, potential near-term headline risk puts us on the sidelines initially, despite CHS's trading at a discount to its historical forward P/E multiple.” Chico's FAS currently trades at $11.76.