CHS - Chico's FAS stock hits 4-week low despite strong results raised guidance

Chico's FAS ( NYSE: CHS ) stock fell to a near 4-week low on Wednesday despite the clothing retailer reporting Q2 results beat and raising its 2022 guidance.

Investors appeared to be booking profits after CHS' rally this month, with the stock on track to post its biggest monthly gain this year.

CHS expects 2022 EPS of $0.79-$0.87 vs. prior outlook of $0.64-$0.74.

Net sales are projected to be $2.14B-$2.17B vs. prior outlook of $2.13B-$2.16B.

CHS expects gross margin rate as a percent of net sales of 38.8-39.1% vs. prior guidance of 38.3-38.6%.

CHS expects Q3 EPS of $0.11-$0.14 vs. $0.15 in Q3 2021, while net sales are estimated to be $495M-$510M, up ~9-12% Y/Y.

Gross margin rate as a percent of net sales is projected to be 38.9-39.4%.

CHS reported Q2 EPS of $0.34 vs. $0.21 in Q2 2021, driven by strong comparable sales growth and meaningful gross margin expansion (up 300 bps at 41.4%).

Revenue increased 18.4% Y/Y to $558.72M and comparable sales grew 19.5%, driven by increase in transaction count and higher average dollar sale.

Shares of CHS have risen 9.3% YTD.

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