What happened

Shares of women's apparel retailer Chico's Fas (NYSE:CHS) were hit hard on Wednesday, falling as much as 24%. At the time of this writing, shares are down about 20%.

The stock's decline follows Chico's first-quarter earnings report. During the quarter, sales and net income fell compared to the year-ago quarter. Shares are likely trading lower because both Chico's earnings per share and its revenue guidance were below consensus analyst estimates.

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So what

Chico's Fas reported first-quarter net sales of $561.9 million, down from $583.7 million in the year-ago quarter. The decline "primarily reflects a comparable sales decline of 5.9% and the impact of 41 net store closures since last year's first quarter," said management in the company's first-quarter earnings release. Net sales for the period were above a consensus analyst estimate for $552 million. 

Chico's earnings per share fell from $0.26 per share in the year-ago quarter to $0.23, missing a consensus analyst estimate for earnings per share of $0.26.

Though CEO Shelley Broader said she was "pleased" with the launch of its "new sales-driving initiatives," she admitted that "first quarter customer traffic was challenging." Chico's Fas addressed the company's traffic challenges with strong inventory management and targeted promotions, the latter of which may have pressured Chico's earnings per share.

Now what

Looking ahead, Chico's guided for second-quarter net sales to decline in a range of mid to high single-digit percentage points on a year over year basis. This is worse than the 4.1% year-over-year decline analysts were expecting.

Over the long term, Broader expects its new ShopRunner partnership, which was announced at the end of February, and its recent expansion to sell its brands on Amazon.com and QVC to help drive stronger customer traffic and sales.

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