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Chico’s FAS (CHS) shares rose 9.1% in the last trading session to close at $5.50. This move can be attributed to the remarkable volume with more shares traded than in the regular session. That compared to the stock’s 3.1% gain over the past four weeks.
Chico’s stock rally is an extension of its continued advances in transformative efforts that have impressed investors. The company’s turnaround strategy has helped it generate high profits and a solid bottom line, despite the turmoil led by the pandemic. Its efforts to become a “digital first, customer-led” company with a strong portfolio of three unique brands bodes well in the long run. As part of the strategy, the company is making impressive progress in improving merchandise quality and rolling out marketing strategies to increase customer engagement, which is likely to drive margins. The company is also on track with its property improvement plan, with plans to close nearly 200 underperforming stores in the next two years. This is likely to boost operating margins in the long run.
This apparel chain is expected to report a quarterly loss of $0.03 per share in its upcoming report, which represents a +92.9% year-over-year change. Revenue is expected to be $424.2 million, up 20.7% from last year’s quarter.
While earnings and revenue growth expectations are important in assessing a stock’s potential strength, empirical research shows a strong relationship between trends in earnings estimates reviews and near-term stock price movements.
For Chico, its consolidated earnings per share estimate for the quarter has been unchanged for the past 30 days. Usually the stock price does not continue to rise in the absence of any trend in the earnings estimate revisions. So, be sure to keep an eye on the Basic Human Standard going forward to see if this latest leap could turn into more power down the road.
The stock is currently ranked Zacks 2 (Buy). You can see the full list of Zacks #1 ranked stocks (strong buy) here >>>>
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Chico’s FAS, Inc. (CHS): Free Stock Analysis Report
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