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Chico's FAS (CHS) Inks $1B Acquisition Deal With Sycamore
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Chico's FAS, Inc. recently entered into a definitive deal with Sycamore Partners to be acquired by the latter. The deal, valued at $1 billion, is anticipated to be closed by the end of first-quarter 2024, conditioned on certain customary closing conditions and approvals.
Chico's FAS’ shares surged 63.1% yesterday to eventually close the trading session at $7.52.
Based in New York, Sycamore Partners is a private equity firm that specializes in retail, consumer and distribution-related investments. The firm has a total committed capital of around $10 billion.
Inside the Headlines
Chico's FAS believes that the transaction will provide it with added expertise, financial resources and strategic flexibility to boost the growth of its three leading brands, namely Chico's, White House Black Market and Soma. Apart from creating significant opportunities for its more than 14,000 employees and iconic brands, the transaction will also offer a lucrative cash value to Chico's FAS shareholders.
Per the deal, Chico's FAS shareholders will be entitled to receive $7.60 per share in cash. The per-share purchase price denotes a premium of 65% to Chico's FAS’ closing stock price on Sep 27. On closing of the transaction, Chico's FAS will operate as a privately held company and will be delisted from the New York Stock Exchange.
It’s worth noting that the deal incorporates a 30-day "go-shop" period that will remain valid till the end of Oct 27, 2023. The go-shop period allows Chico's FAS and its financial advisor to solicit other bids.
Zacks Rank, Price Performance and Estimate Trend
Chico's FAS, with a $928.3-million market capitalization, currently carries a Zacks Rank #4 (Sell). The company’s second-quarter fiscal 2023 net sales came in at $545.1 million, reflecting a decrease of 2.4%. Its comparable sales declined by 3% year-over-year due to a decrease in transaction count.
Image Source: Zacks Investment Research
The company’s shares have gained 40.6% against the industry’s decline of 3.4% in the past three months.
In the past 30 days, the Zacks Consensus Estimate for the company’s earnings moved down 11.4% to 70 cents for fiscal 2023 on two downward estimate revisions against none upward. Over the same time frame, the consensus estimate for fiscal 2024 earnings inched down 9.9% to 73 cents on two downward estimate revisions against none upward.
Abercrombie & Fitch is a leading casual apparel retailer. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share suggests growth of 10.4% and 1,644%, respectively, from the year-ago reported figures. ANF delivered an earnings surprise of 724.8% in the last reported quarter.
American Eagle is a retailer of casual apparel, accessories and footwear. AEO delivered an average earnings surprise of 43.2% in the last four quarters. The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales indicates an increase of 1.3% from the year-ago reported figure.
Boot Barn is a fashion retailer of apparel and accessories. The company has a trailing four-quarter earnings surprise of 13.5%, on average. The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests an increase of 7.8% from the year-ago reported figure.
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Chico's FAS (CHS) Inks $1B Acquisition Deal With Sycamore
Chico's FAS, Inc. recently entered into a definitive deal with Sycamore Partners to be acquired by the latter. The deal, valued at $1 billion, is anticipated to be closed by the end of first-quarter 2024, conditioned on certain customary closing conditions and approvals.
Chico's FAS’ shares surged 63.1% yesterday to eventually close the trading session at $7.52.
Based in New York, Sycamore Partners is a private equity firm that specializes in retail, consumer and distribution-related investments. The firm has a total committed capital of around $10 billion.
Inside the Headlines
Chico's FAS believes that the transaction will provide it with added expertise, financial resources and strategic flexibility to boost the growth of its three leading brands, namely Chico's, White House Black Market and Soma. Apart from creating significant opportunities for its more than 14,000 employees and iconic brands, the transaction will also offer a lucrative cash value to Chico's FAS shareholders.
Per the deal, Chico's FAS shareholders will be entitled to receive $7.60 per share in cash. The per-share purchase price denotes a premium of 65% to Chico's FAS’ closing stock price on Sep 27. On closing of the transaction, Chico's FAS will operate as a privately held company and will be delisted from the New York Stock Exchange.
It’s worth noting that the deal incorporates a 30-day "go-shop" period that will remain valid till the end of Oct 27, 2023. The go-shop period allows Chico's FAS and its financial advisor to solicit other bids.
Zacks Rank, Price Performance and Estimate Trend
Chico's FAS, with a $928.3-million market capitalization, currently carries a Zacks Rank #4 (Sell). The company’s second-quarter fiscal 2023 net sales came in at $545.1 million, reflecting a decrease of 2.4%. Its comparable sales declined by 3% year-over-year due to a decrease in transaction count.
Image Source: Zacks Investment Research
The company’s shares have gained 40.6% against the industry’s decline of 3.4% in the past three months.
In the past 30 days, the Zacks Consensus Estimate for the company’s earnings moved down 11.4% to 70 cents for fiscal 2023 on two downward estimate revisions against none upward. Over the same time frame, the consensus estimate for fiscal 2024 earnings inched down 9.9% to 73 cents on two downward estimate revisions against none upward.
Key Picks
Some better-ranked stocks are Abercrombie & Fitch (ANF - Free Report) , American Eagle Outfitters (AEO - Free Report) and Boot Barn (BOOT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie & Fitch is a leading casual apparel retailer. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share suggests growth of 10.4% and 1,644%, respectively, from the year-ago reported figures. ANF delivered an earnings surprise of 724.8% in the last reported quarter.
American Eagle is a retailer of casual apparel, accessories and footwear. AEO delivered an average earnings surprise of 43.2% in the last four quarters. The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales indicates an increase of 1.3% from the year-ago reported figure.
Boot Barn is a fashion retailer of apparel and accessories. The company has a trailing four-quarter earnings surprise of 13.5%, on average. The Zacks Consensus Estimate for Boot Barn’s current financial-year sales suggests an increase of 7.8% from the year-ago reported figure.