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Chico's FAS (NYSE: CHS), the once high flying retailer, hit a serious bump in the road in early 2006. The outstanding same store sales growth that drove the stock to record heights rolled over and so did the stock. After peaking in early 2006 at $49, the stock is now down to $20, a 60% drop.Last night, Chico's reported results and it appears the worst in same store sales (SSS) could be coming to an end. The much watched industry metric could turn positive by the Spring.
SSS for the Chico's stores came in flat, which is a big improvement from 2006 figures. However, management said February SSS were down 3%. Therefore, Chico's is still going through a bumpy period.
With the stock down 60% from its high, it is time to start getting into this stock. Chico's is debt fee, is a cash flow machine and could be a private equity candidate if SSS improves in the Spring and the investment community doesn't drive the stock higher.
Retailer with a loyal clientele come back in droves when the company gets the product mix right.
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