Analyst Expresses Disappointment In Chico's FAS Inc's Moderated Annual Outlook

Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Chico’s FAS Inc CHS with a price target of $6.
CHS reported 1Q23 EPS of $0.32 versus $0.28 last year, coming in ahead of both the consensus of $0.28 and guidance for EPS in the range of $0.26-$0.30.
The analyst said the earnings beat came from stronger gross margin expansion and operating deleverage.
The analyst noted sales came in slightly below the low-end of guidance as two of the company’s three brands posted negative comps for the quarter against difficult compares.
The analyst noted that total comparable sales within the topline declined 0.6% from last year's strong growth of 40.6%, driven by decreased transactions.
FY23 total sales are now planned to $2.175 billion - $2.205 billion, below the prior guide for sales of $2.220 billion - $2.250 billion.
The sales shortfall for the quarter came primarily from the WH|BM banner, where management commented that fashion inventories sold through quickly.
The analyst is disappointed with the moderation in the annual outlook after only one quarter after a solid start to the year marked by better full priced selling and a customer base that should be relatively more resilient in the face of macro headwinds.
Price Action: CHS shares are trading higher by 8.59% at $5.31 on the last check Tuesday.