"Stupid Chico's!"
I've been shouting that at my portfolio screen lately as stock in Chico's FAS (NYSE:CHS) resumes its familiar upward trajectory.
Why would I regret the rise in value of one of my favorite companies? Quite simple, really. I sold my shares recently, and I've been waiting (hoping, actually) for the market to have one of its freakouts and let me get a few back on sale.
Alas, that blue-light special doesn't look like it'll come any time soon. Yesterday, Chico's reported sales results for April, and they were, as usual, amazing. Overall sales increased more than 31%, reaching $114.7 million. Same-store sales were up an incredible 15.5%. That means total first-quarter sales were up 27.4%, and comps rose 10.8%.
I'm guessing earnings will be even more impressive, since Chico's has a habit of becoming more and more profitable as its sales rise. Can I just mention this? Net margins are above 13%. Net! So-called competition from the likes of Ann Taylor (NYSE:ANN) and Talbots (NYSE:TLB) have crummier operating margins. Department stores like Federated (NYSE:FD)? Forget about it.
Even better, margins are continually on the rise at Chico's, as I discussed here. If they don't improve this quarter, I'll eat one of those flowery skirts.
The moral of this story is this: Don't try to be too clever. Yes, I made a fine little bundle between when I fished Chico's off the bottom last fall and sold a few weeks back -- well over 50%. But there was really no good reason for me to have sold. For what? To spend it all on army men and popsicles? (Sshhh.)
I'm sure I'll be getting back in some day. In the meantime, don't hate me if I hope for something minor like a hurricane, a bizarre elastic waistband accident, or the like to push the stock down below the price it deserves.
For related Foolishness:
- Chico's still da man.
- Another Fool thinks Chico's may not be so chic.
- Doing well is nothing new for Chico's.
Seth Jayson is pretty sure this won't be his last investing mistake, but he hopes it's the last one with Chico's. At the time of publication, he had positions in no firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.
