Chicos FAS (CHS) Q4 Revenue Misses Consensus

Chicos FAS (NYSE: CHS) reported Q4 EPS of ($0.68), may not compare to the analyst estimate of ($0.31). Revenue for the quarter came in at $386.2 million versus the consensus estimate of $439.33 million.

Fiscal 2021 Outlook

Given the ongoing market disruption caused by the pandemic and related uncertainty on timing and extent of the market recovery, the Company is not providing specific fiscal 2021 first-quarter or full-year financial guidance at this time.

The Company is, however, providing information on its planning expectations for the coming year. At this time, the Company expects to benefit from the COVID-19 vaccine rollout, particularly given its customer base, and is planning for consolidated sales trends to improve in the back half of the year. Consolidated sales trends for the first half of the year are expected to be largely in line with reported fiscal 2020 results. By brand, the Company expects continued strong performance at Soma, with performance at Chico's and White House Black Market consistent with market expectations and all brands benefiting from the COVID-19 vaccine rollout. We expect our ongoing investment in the digital channel to deliver continued sales growth.

Cost savings realized in fiscal 2020 are expected to be maintained in fiscal 2021. The Company is continuing to implement supply chain efficiencies and intends to maintain stringent inventory controls, with fiscal 2021 first quarter inventories planned down 30% to last year, which are expected to support improving current margin levels.

To further optimize its store footprint and improve profitability, in fiscal 2021, the Company will continue to emphasize its growing digital channel and anticipates rolling out "store-in-store" opportunities for the Soma brand in 50 Chico's boutiques. The Company anticipates closing approximately 13% to 16% of its remaining store fleet over the next three fiscal years, with approximately 40 to 45 of these closures occurring in fiscal 2021. The vast majority are expected to be mall-based Chico's and White House Black Market stores. These actions would put the Company ahead of its original multi-year closure target of 250 stores.

For earnings history and earnings-related data on Chicos FAS (CHS) click here.

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