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Why Chico's FAS Stock Jumped Wednesday

By Daniel Sparks – Aug 28, 2019 at 3:20PM

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Even though the company missed revenue estimates, investors are impressed.

What happened

Shares of Chico's FAS (CHS 4.09%) jumped on Wednesday, rising 20% as of 2:34 p.m. EDT. The stock's gain follows the women's apparel retailer's second-quarter results. 

The reason for investor optimism on Wednesday likely has to do with impressive comparable-sales growth for the company's Soma brand and commentary from management on improvements at White House Black Market after the quarter ended.

A chart showing a stock price moving higher.

Image source: Getty Images.

So what

Chico's reported second-quarter net sales of $508 million, down from $545 million in the year-ago quarter. On average, analysts were expecting revenue of $513 million. Non-GAAP (adjusted) earnings per share for the period were breakeven, in line with analysts' consensus estimate for the metric.

But management noted it saw sequential improvement at its Chico's brand. In addition, the company saw 10.9% comparable sales growth at Soma.

Now what

Looking beyond its second quarter, which ended Aug. 3, Chico's FAS CEO Bonnie Brooks said:

At White House Black Market, the changes we made in product, marketing and in-store presentation are driving improved sales trends in August compared to our second quarter results. We expect these improvements to continue benefiting the brand throughout the fall and holiday seasons.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Chico's FAS, Inc.
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