Chico's-FAS shares on the rise after loss widens over the fourth quarter

Shares at Chico’s-FAS surged Thursday despite the women's clothing retailer’s reported 21.1 million dollars loss in the fourth quarter. The jump is explained by the fact that, despite broader, the loss still beat Wall Street expectations.

The stock (NYSE: CHS) closed at 12.56 dollars, up 1.64 dollars – circa 15 percent – on Thursday.

The company said it had a loss of 16 cents per share. Earnings, adjusted for amortisation costs and restructuring costs, were 5 cents per share. In comparison, the average estimate of 11 analysts surveyed by Zacks Investment Research was break even on a per-share basis.

"While we are disappointed with our fourth quarter sales, we are pleased that our responsiveness and disciplined inventory management in this intensely promotional environment allowed us to achieve positive gross margin leverage and a slight decline in total inventories over last year," summed up CEO Shelly Broader.

"Additionally, our business generated significant cash flow during the fiscal year, which in combination with our healthy balance sheet, allowed us to return 334 million dollars to our shareholders in the form of dividends and share repurchases."

Chico's posted revenue of 627.4 million dollars in the period, falling short of forecasts. For the year, the company reported profit of $1.9 million, or 1 cent per share. Revenue was reported as 2.64 billion dollars, reported Bloomberg.

Also Thursday, the company announced that its board of directors declared a quarterly cash dividend of 8 cents per share of its common stock, a 3.2 percent increase over the dividend rate from February 2015. The dividend is payable on March 28 to Chico's FAS shareholders of record at the close of business on March, 14.