Will Chico's (CHS) Gloomy Earnings Trend follow it into Q2? - Analyst Blog


Chico's FAS Inc. ( CHS ), a women specialty retailer, is slated to report its second-quarter fiscal 2014 results on Aug 27, 2014. In the last quarter, it posted a negative surprise of 10.3%. Let's see how things are shaping up for this announcement.

Factors Influencing This Quarter

Chico's is a women's specialty retailer of private branded, classy, casual as well as dressy outfits, innerwear, complementary accessories and other non-clothing gift items. However, most of its brands targeting women over the age of 30 are witnessing a downward trend in its target market. Notably, over the past few quarters, this store chain retailer has not been performing up to the mark. The company delivered negative earnings surprises in the trailing four quarters with an average miss of 27.3%. Therefore, we remain cautious about the stock's future performance until things turnaround for the company.

Earnings Whispers?

Our proven model does not conclusively show Chico's as likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.

Zacks ESP: ESP for Chico's is 0.00% since the Most Accurate estimate stands at 26 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank: Chico's Zacks Rank #4 (Sell) lowers the predictive power of ESP. We need to have a positive ESP to be confident about an earnings surprise. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination to post an earnings beat:

Abercrombie & Fitch Co. ( ANF ) has an Earnings ESP of +10.00% and a Zacks Rank #2 (Buy).

Shoe Carnival Inc. ( SCVL ) with an Earnings ESP of +5.88% has a Zacks Rank #2.

Zoe's Kitchen Inc. ( ZOES ) has an Earnings ESP of +50.00% and a Zacks Rank #2.

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CHICOS FAS INC (CHS): Free Stock Analysis Report

SHOE CARNIVAL (SCVL): Free Stock Analysis Report

ZOES KITCHEN (ZOES): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ANF , CHS , SCVL , ZOES



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