Why Chico's FAS Shares Are Trading Lower Despite Strong Q2 Earnings

Chico's FAS Inc CHS is trading lower after the company announced better-than-expected second-quarter financial results, but said it's facing macro supply chain headwinds that it expects will impact sales and gross margin.

Chico's FAS reported quarterly earnings of 21 cents per share, which beat the estimate for a loss of 7 cents per share. The company reported quarterly revenue of $472.1 million, which beat the estimate of $407.35 million. 

Chico's FAS expects third-quarter revenue to increase 18% to 22%.

The company acknowledged that there is economic uncertainty amid the COVID-19 pandemic. The company said it's facing macro supply chain headwinds including higher freight costs, extended inbound transit times and product supplier handover delays driven by the pandemic.

"Our second quarter earnings performance was the best second quarter Chico's FAS has posted since 2013, and these results show the incredible progress we continue to make in our turnaround strategy, despite pandemic challenges," said Molly Langenstein, president and CEO of Chico's FAS.

Chico's FAS is an apparel retailer with a portfolio of private-label brands that sell women's clothing and accessories.

CHS Price Action: Chico's FAS has traded as high as $7.29 and as low as 90 cents over a 52-week period.

The stock was down 15.80% at $4.92 at time of publication.

Photo by S. Hermann & F. Richter from Pixabay.