Through The Fly's Eyes: FAS Chico's
from Theflyonthewall.com
Same-Store-Sales Growth Returning; Gross Margins Still A Question
Chico's FAS (CHS), the great growth stock that has run into hard times the past year, appears to be successfully addressing its lack of growth issues. Same-store-sales growth has returned after a prolonged period of big declines for this women's retailer.
Last night, Chico's reported same store sales of 5.2% and total company-wide sales of 22%. However, one of the flaws of retail monthly sales data is that it does not tell investors what gross margins were. Did management slash prices to get sales growing or did the company successfully change its product mix?
Look for analyst reports today to see if Chico's successfully changed product mix and did not slash prices to get sales going. If improved product mix was the reason for the sales jump, jump back into this stock.
When Chico's has its product mix right, its loyal, high-end customer base will use its deep pockets to buy a lot of stuff which amounts to huge free cash flow generation for shareholders. With the stock trading for around $25, down from $48 in early 2006, this stock could revisit its former highs if sustainable growth has returned.
posted by Eric at
9:50 AM
3 Comments:
Chicos is expanding their Human Resources staff. They are also adding tons of positions to their Corporate HQ. That type of activity tells me they know something that they have not yet revealed.
By
Anonymous, at 10:06 PM
By the way...Chicos target is 35+ woman. My wife at 43 thinks their clothing styles are not that great. In fact, I have not met too many women under 50 that like the Chicos current styles. It seems that today's 35-50 year old women wants to look younger and hip. But, the Chicos clothes appeal to women 50 - 65 who want to look like younger women. They do not appeal to their target age group. I hope...as an investor...that they change their product line soon to appeal to people like my wife and her friends.
By
Anonymous, at 10:12 PM
I currently work for Chico's and have also worn the clothing for about 13 years. I am 39. I also shop Ann Taylor, Cache and Banana Republic. I have always found that Chico's has provided clothing that fits EVERY age group. I love the stuff I put together. AGE APPROPRIATE!! Unfortunately most woman shopping with their 'eye rolling' daughters & husbands are left feeling hopelessly old or shamelessly fat. I have been a longtime shopper, invester, and employee. Would love for you to walk a day in my shoes. Do you know how many 'fashion citations' I could write? No!! Wait for the book! It'll be a good one! Happy POSITIVE shopping!!!
By
Anonymous, at 10:42 PM
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