Apr 3, 2009
Chico's Q1 sales trending stronger
Apr 3, 2009
BANGALORE, April 3 (Reuters) - FBR Capital Markets said Chico's FAS Inc's (CHS.N) same-store sales trends in the current quarter could be ahead of the women's apparel retailer's expectations, sending its shares up as much as 12 percent.
White House/Black Market Spring 2009
The company, which operates stores under the Chico's, White House/Black Market and Soma Intimates names, had said in March it expects first-quarter same-store sales to fall in a mid-to-low teens percentage range.
"We have seen a pick-up in traffic and conversion throughout the month of March and believe that Chico's is well positioned to enter the heart of the spring selling season in April," FBR Capital Markets analyst Adrienne Tennant said in a note.
The brokerage raised its price target on the stock by $2 to $8 and said it had increasing confidence the company's management team was doing "the right things to turn the business."
Chico's has been cutting jobs and limiting capital spending to trim costs and weather a long slump in sales. The retailer has also been trying to upgrade its merchandise and image to spur demand.
FBR Capital, which reiterated its "outperform" rating on the stock, said visits at both Chico's stores and White House/Black Market outlets suggested solid early spring selling.
At the White House/Black Market stores, merchandise, markdown, and sales trends have all continued to improve since last year, the brokerage added.
Following the channel checks, the brokerage raised its first-quarter comparable-store sale forecast on Chico's to a 9.4 percent decline from a fall of 15 percent.
FBR Capital Markets also raised its profit estimates for fiscal 2009 and fiscal 2010.
Chico's shares rose to a high of $6.75, before paring some gains to trade up 46 cents at $6.50 early Friday afternoon on the New York Stock Exchange. (Reporting by Dhanya Skariachan in Bangalore; Editing by Phil Berlowitz)
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