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Chico's (CHS) to Post Q1 Earnings: Stock to Disappoint?
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Chico's FAS, Inc. is slated to release first-quarter fiscal 2017 results on May 24. The question lingering in investors’ minds is whether this specialty retailer of designer apparel and accessories will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 49.5%. Let’s see how things are shaping up prior to this announcement.
The current Zacks Consensus Estimate for the quarter under review is 29 cents, reflecting a year-over year increase of 15.1%. Further, we noted that the Zacks Consensus Estimate been stable in the past 30 days. However, analysts polled by Zacks expect revenues of $625.4 million, down about 2.7% from the year-ago quarter.
Chico's forms part of the Retail-Wholesale sector. Per the latest Earnings Trends, as of May 18, Retail-Wholesale sector’s earnings are expected to inch up 0.8%, with 3.4% revenues growth.
Factors at Play
Chico’s has been gaining from its solid focus on cost control and operating efficiency endeavors, which were declared in May 2016. Further, the company remains on track with other organizational developments, brand-specific initiatives and fresh merchandising efforts. Backed by these efforts, along with the company’s supply-chain initiatives, management expects improvements in margins and SG&A expenses in fiscal 2017. However, the company expects fiscal 2017 comps to dip at a low single-digit percentage rate, owing to its constant efforts toward rationalizing promotional activities. Moreover, a tough retail scenario and sluggish mall traffic continues to pose concerns for Chico’s, as these hurdles have been plaguing most retailers’ performances.
While the aforementioned growth factors boosted Chico’s results and stock price in the past one year, we note that investors turned bearish on the company of late, as shares of the company have tumbled nearly 12% over the past one week. Moreover, Chico’s has slumped 21.8% over the last three months, underperforming the Retail – Apparel/Shoes industry’s decline of 12.5%. Clearly, investors appear apprehensive about Chico’s, as it gets closer to announcing its first-quarter fiscal 2017 results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Chico's to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chico's currently carries a Zacks Rank #4 (Sell). Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Moreover, the company has an Earnings ESP of -3.45% as the Most Accurate estimate of 28 cents is pegged a notch lower than the Zacks Consensus Estimate of 29 cents. The combination of Chico's Zacks Rank #4 and a negative ESP makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Ulta Beauty Inc. (ULTA - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
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Chico's (CHS) to Post Q1 Earnings: Stock to Disappoint?
Chico's FAS, Inc. is slated to release first-quarter fiscal 2017 results on May 24. The question lingering in investors’ minds is whether this specialty retailer of designer apparel and accessories will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 49.5%. Let’s see how things are shaping up prior to this announcement.
Chico's FAS, Inc. Price and EPS Surprise
Chico's FAS, Inc. Price and EPS Surprise | Chico's FAS, Inc. Quote
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is 29 cents, reflecting a year-over year increase of 15.1%. Further, we noted that the Zacks Consensus Estimate been stable in the past 30 days. However, analysts polled by Zacks expect revenues of $625.4 million, down about 2.7% from the year-ago quarter.
Chico's forms part of the Retail-Wholesale sector. Per the latest Earnings Trends, as of May 18, Retail-Wholesale sector’s earnings are expected to inch up 0.8%, with 3.4% revenues growth.
Factors at Play
Chico’s has been gaining from its solid focus on cost control and operating efficiency endeavors, which were declared in May 2016. Further, the company remains on track with other organizational developments, brand-specific initiatives and fresh merchandising efforts. Backed by these efforts, along with the company’s supply-chain initiatives, management expects improvements in margins and SG&A expenses in fiscal 2017. However, the company expects fiscal 2017 comps to dip at a low single-digit percentage rate, owing to its constant efforts toward rationalizing promotional activities. Moreover, a tough retail scenario and sluggish mall traffic continues to pose concerns for Chico’s, as these hurdles have been plaguing most retailers’ performances.
While the aforementioned growth factors boosted Chico’s results and stock price in the past one year, we note that investors turned bearish on the company of late, as shares of the company have tumbled nearly 12% over the past one week. Moreover, Chico’s has slumped 21.8% over the last three months, underperforming the Retail – Apparel/Shoes industry’s decline of 12.5%. Clearly, investors appear apprehensive about Chico’s, as it gets closer to announcing its first-quarter fiscal 2017 results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Chico's to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Chico's currently carries a Zacks Rank #4 (Sell). Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions. Moreover, the company has an Earnings ESP of -3.45% as the Most Accurate estimate of 28 cents is pegged a notch lower than the Zacks Consensus Estimate of 29 cents. The combination of Chico's Zacks Rank #4 and a negative ESP makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ulta Beauty Inc. (ULTA - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2.
Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #3.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>