Wolfe Research Upgrades Chico's, Inc. (CHS) to Outperform (Earlier)
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Wolfe Research upgraded Chico's, Inc. (NYSE: CHS) from Peerperform to Outperform with a price target of $16.00, saying promos suggest merchandise margin upside.
Analyst Adrienne Yih commented, "We are upgrading to Outperform from Peer Perform based on 1) expectation for positive inventory and GMROI inflection in 3Q16, 2) cost reduction efforts to bolster margin expansion in the absence of top-line growth, and 3) evidence from our proprietary promotional checks that both Chico’s and White House Black Market have “Flat” to “Better” promos YoY, suggesting merchandise margin expansion. CHS’ margin expansion roadmap is predicated on drivers under its control with modest top-line growth. Comps may still be negative as management focuses on quality of sale."
Shares of Chico's, Inc. closed at $13.70 yesterday.
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