Please ensure Javascript is enabled for purposes of website accessibility

Why Chico's FAS Stock Jumped Wednesday

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chico's FAS, Inc. Stock Quote
Chico's FAS, Inc.
CHS
$4.84 (4.09%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.