What happened 

Shares of Chico's FAS, Inc. (CHS) were falling today after the women's clothing chain posted disappointing earnings results in its first-quarter report. As of 12:51 p.m. EDT, the stock was down 12.3%.

A Chico's storefront

Image source: Chico's FAS.

So what

Chico's joined the lineup of retailers posting subpar reports this earnings season, as the company said comparable sales plunged 8.7%, falling sharply at both its namesake brand and its White House Black Market chain. Overall revenue was down 9.2%, to $583.7 million, missing estimates at $625.4 million by a wide margin.

Bottom-line performance was stronger, as earnings per share (EPS) actually rose $0.01 from the prior year, to $0.26, as the company slashed selling, general, and administrative (SG&A) expenses. Still, that result fell short of Wall Street expectations at $0.29.

CEO Shelley Broader noted the "challenging environment" and said the company was continuing to "execute against our strategic plan to increase profitable sales and long-term earnings."

Now what 

Looking ahead, management said it expected a mid-single-digit decline in comparable sales for the full year, but said gross margin would improve slightly. Management did not provide EPS guidance, but that forecast indicates that profits should fall slightly for the year. Analysts had expected EPS to increase from $0.81 to $0.92. 

While management should be commended for delivering profit growth in spite of plunging comparable sales, the guidance and weakness in its two biggest brands make it clear why the stock is down double digits. Expect Chico's FAS to continue to struggle, along with much of the apparel retail sector.