Chico's FAS Shares Decline Post Q2 Results

Chico's FAS Shares Decline Post Q2 Results
  • Chico's FAS Inc CHS reported second-quarter FY22 sales growth of 18.4% year-on-year to $558.72 million, beating the consensus of $543.90 million.
  • Comparable sales increased 19.5% versus last year, driven by an increase in transaction count and higher average dollar sale.
  • The gross margin for the quarter expanded 300 basis points Y/Y to 41.4%. The operating margin expanded Y/Y from 7.5% to 10.4%, and operating income for the quarter rose 63% to $58 million.
  • EPS of $0.34 beat the analyst consensus of $0.25.
  • The company held $172.5 million in cash and equivalents as of July 30, 2022.
  • At Q2 end, inventories totaled $338.8 million versus $202.1 million at the end of last year's Q2.
  • Outlook: Chico's FAS sees Q3 sales of $495 million - $510 million (consensus $508.3 million) and EPS of $0.11- $0.14 (consensus $0.11).
  • Chico's FAS anticipates FY22 EPS of $0.79 - $0.87 (prior view $0.64 - $0.74) versus the estimate of $0.71. It sees FY22 sales of $2.14 billion - $2.17 billion (prior view $2.13 billion - $2.16 billion), against the Street view of $2.15 billion.
  • Price Action: CHS shares are trading lower by 9.44% at $5.80 on the last check Wednesday.

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