Market Overview

RBC Says Chico's FAS Is An Under-Owned Name

RBC Says Chico's FAS Is An Under-Owned Name

Chico's FAS, Inc. (NYSE: CHS) reported a Q2 beat, with sales and margins ahead of expectations. The company represents an “under-owned name” with low expectations, RBC Capital Markets’ Brian Tunick said in a report. He reiterated an Outperform rating on the company, while raising the price target from $13 to $14.

Quarterly Beat

Chico’s FAS reported its adjusted EPS at $0.25, higher than the consensus estimate of $0.22. Sales declined 3.6 percent to $636 million, but came in ahead of the Street’s $632 million. The company’s EBIT margin came in at 8.5 percent, down from last year’s 9.2 percent, but beating the Street’s 7.4 percent, analyst Tunick mentioned.

Related Link: Investors Cheer Chico's FAS Q2 Earnings

Cushion For Meeting EBIT Margin Target

Chico’s FAS is creating a cost-cutting cushion to achieve its low-double-digit EBIT margin target, versus the 6.6 percent achieved in 2015, Tunick noted. CEO Broader announced another $25 million in cost savings, apart from the $65-$85 million announced in the prior quarter.


The EPS estimate for 2016 has been raised from $0.66 to $0.68. The analyst commented that Chico’s FAS was an “under-owned name w/lower expectations into 2Q16 print.” He enumerated the catalysts for the company as:

  • Lower expectations for 2H16 comp and GM
  • Cleaner inventory
  • Self-help for 2H16-2017 margin
  • September 28 analyst day

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for CHS

Nov 2020B. Riley FBRDowngradesBuyNeutral
Mar 2020B. Riley FBRMaintainsBuy
Mar 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for CHS
View the Latest Analyst Ratings


Related Articles (CHS)

View Comments and Join the Discussion!

Posted-In: Brian Tunick RBC Capital MarketsAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

TSLAJP MorganMaintains125.0
INTCTruist SecuritiesMaintains64.0
FBTruist SecuritiesMaintains320.0
AAPLCowen & Co.Maintains153.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at