Chico's (CHS) Likely to Miss Q1 Earnings - Analyst Blog

Chico's FAS Inc. CHS, a women specialty retailer, is slated to report its first-quarter fiscal 2014 results on May 28, 2014. In the last quarter, it posted a negative surprise of 75.0%. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Chico's is a women's specialty retailer of private branded, classy, casual as well as dressy outfits, innerwear, complementary accessories and other non-clothing gift items. However, most of its brands targeting women over the age of 30 are witnessing a downward trend in its target market. Notably, over the past few quarters, this store chain retailer has not been performing up to the mark. The company delivered negative earnings surprises in the trailing four quarters with an average miss of 27.5%. Therefore, we remain cautious about the stock's future performance until things turn around for the company.

Earnings Whispers?

Our proven model does not conclusively show Chico's as likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.

Negative Zacks ESP: ESP (Expected Surprise Prediction) for Chico's is -6.90% since the Most Accurate estimate stands at 27 cents per share, which is lower than the Zacks Consensus Estimate of 29 cents per share.

Zacks Rank #3 (Hold): Chico's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination to post an earnings beat:

Vail Resorts Inc. MTN has an Earnings ESP of +6.14% and a Zacks Rank #2 (Buy).

Lions Gate Entertainment Corp. LGF with an Earnings ESP of +2.56% carries a Zacks Rank #3.

Bank of Montreal BMO holds an Earnings ESP of +0.73% and a Zacks Rank #3.