Oppenheimer Maintains Outperform Following Chicos FAS (CHS) Q1 Results
Oppenheimer maintains an Outperform rating and $20 price target on Chico's, Inc. (NYSE: CHS) following its Q1 report. Analyst Anna Andreeva says that given the difficult retail landscape, CHS's 100bps beat was impressive.
Andreeva commented, "CHS story of disciplined inventory/expense management and focus on capital returns (another 25% of ASR left to go) is playing out, although sales line has less visibility as company trades some top line for margin (pulled back promotions driving softer 1Q15/May results). Given softer start to May, modeling 2Q15 comps down 1-2%; positive comps necessary to hit +LSD comp guidance for '15, fashion volatility of apparel businesses is always something to watch (dress category under-performed at all brands). Maintaining EPS estimates, stock not inexpensive trading at 20-21x, margin recovery opportunity still compelling -- $1.30-$1.40 EPS power at 10% EBIT margins."
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Shares of Chico's, Inc. closed at $16.64 yesterday.