Executive Summary

• Chico’s FAS reported 1Q16 revenues of $643 million, down 7.8% year over year and below the consensus estimate of $669 million. EPS was $0.23, missing the consensus of $0.32, but was up 4.5% from $0.22 in the year-ago quarter.
• The company has expanded its cost reduction and operating efficiency initiatives, which are expected to result in $50–$70 million in annual savings.
• Same-store sales decreased by 4.2% in 1Q16, reflecting a reduced average-dollar sale and a slightly lower transaction count compared to 1Q15.