Chico’s stock slips on trimmed full-year outlook
JHVEPhoto/iStock Editorial via Getty Images
Chico's FAS (NYSE:CHS) shares slipped on Tuesday after issuing a softer than expected full-year guidance.
For the first quarter, the Florida-based retailer reported Q1 GAAP EPS of $0.32 on $534.74M in revenue. Gross margins expanded about 210 basis points year over year to 46.1% while comparable sales declined 0.6% from the prior year quarter. Inventory levels declined about 9.8% as the company said supply chain issues eased.
“Total year-over-year sales were in line with our outlook, down 1.1%, on top of 39.4% growth in the first quarter last year. For the Company as a whole, full-priced sales remained healthy, spend per customer and average unit retail increased year-over-year; and we gained market share across all brands,” CEO Molly Langenstein commented. “We are confident in our brand strategy and our ability to deliver on our long-term financial targets, as we continue to navigate the current macroeconomic environment. Our three distinct brands each have a clear path to profitable growth, and we are positioned to further enhance our operating performance, strengthen our balance sheet and generate meaningful shareholder value.”
That said, management moved full-year forecasts lower amid an adverse macroeconomic backdrop. Management now sees consolidated net sales of $2.175B $2.205B and earnings per diluted share of $0.70 to $0.82 as compared to previous guidance ranges for EPS and revenue pegged at $0.79 to $0.91 and $2.22B to $2.25B, respectively. The Street consensus for revenue stood at $2.22B while EPS guidance stood at $0.84.
The company’s Q2 outlook, which includes a revenue forecast of between $545M and $565M and between $0.25 and $0.30 in EPS, suggests downside to consensus estimates set at $573.20M and $0.30, respectively.
Shares of Chico’s (CHS) slid as much as 7% in premarket action before settling at about a 3% drop before the bell on Tuesday.
More on Chico’s:
Chico's FAS: Repeating Fiscal 2022 Growth Will Be Difficult