Here's How Chico's FAS (CHS) Is Poised Ahead of Q2 Earnings

We expect Chico's FAS, Inc. CHS to register a year-over-year decline in its top and bottom-line performances when it releases second-quarter fiscal 2023 results on Aug 29, before market open. The Zacks Consensus Estimate earnings for the fiscal second quarter currently stands at 27 cents per share, which shows a decrease of more than 20% from earnings of 34 cents per share reported in the year-ago quarter. The consensus mark has been stable in the past 30 days.

A glance at its performance in the trailing four quarters shows that it delivered an earnings surprise of 34.7%, on average.
 
The consensus estimate for quarterly revenues is currently pegged at $555 million, indicating a drop of 0.7% from the year-ago period’s reported figure.

Key Factors to Note

Chico's FAS’s quarterly performance is likely to have been hurt by a tough macroeconomic environment, including headwinds like inflationary pressures and foreign currency fluctuations. These factors, coupled with any deleverage in selling, general and administrative expenses, are expected to have affected CHS’s performance in the fiscal second quarter.

On its lastearnings call management had projected consolidated net sales of $545-$565 million. Further, it guided the gross margin to be 39-39.5% and SG&A, as a rate of net sales, to be 30.5-31% for the fiscal second quarter. Management had envisioned earnings per share of 25-30 cents, down from 34 cents a share earned in the year-earlier quarter. The Zacks Consensus Estimate for comparable sales shows that the metric will decline 0.3% in the fiscal second quarter.

On the flip side, the company remains focused on efficiently managing expenses and boosting growth. Also, it has been experiencing immense strength in its brands, thanks to continuous enhancements in product and marketing. These factors are likely to have provided some cushion to the quarterly performance.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Chico's FAS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here as explained below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Chico's FAS, Inc. Price and EPS Surprise

Chico's FAS, Inc. Price and EPS Surprise

Chico's FAS, Inc. price-eps-surprise | Chico's FAS, Inc. Quote

Chico's FAS currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are a few companies, which according to our model, have the right combination of elements to come up with an earnings beat this reporting cycle:

American Eagle Outfitters AEO currently has an Earnings ESP of +8.52% and a Zacks Rank of 2.  You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register bottom-line growth when it reports second-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 15 cents suggests an increase of 275% from the year-ago quarter.

American Eagle Outfitters’ top line is anticipated to fall year over year. The consensus mark for revenues is pegged at $1.19 billion, indicating a drop of 0.9% from the figure reported in the year-ago quarter.

Five Below FIVE currently has an Earnings ESP of +1.21% and a Zacks Rank of 2. FIVE is likely to register top-line improvement when it reports second-quarter fiscal 2023 numbers.

The Zacks Consensus Estimate for Five Below’s quarterly revenues is pegged at $760.2 million, calling for growth of 13.6% from the prior-year quarter’s reported figure. The consensus mark for the quarterly earnings per share of 83 cents suggests a 12.2% increase from the figure reported in the year-ago quarter. FIVE has a trailing four-quarter earnings surprise of 27.9%, on average.

Casey's General Stores CASY currently has an Earnings ESP of +1.03% and a Zacks Rank of 3. The company is expected to register a bottom-line decrease when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a decline of 17.1% from the year-ago quarter.

Casey's top line is anticipated to fall year over year. The consensus mark for revenues is pegged at $3.85 billion, indicating a drop of 13.5% from the figure reported in the year-ago quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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

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