Chico’s FAS (CHS) vs. bebe stores, inc. (NASDAQ:BEBE) Critical Comparison

bebe stores, inc. (NASDAQ: BEBE) and Chico’s FAS (NYSE:CHS) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Institutional & Insider Ownership

11.4% of bebe stores, inc. shares are owned by institutional investors. 59.0% of bebe stores, inc. shares are owned by company insiders. Comparatively, 3.0% of Chico’s FAS shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares bebe stores, inc. and Chico’s FAS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
bebe stores, inc. -11.36% -66.82% -45.84%
Chico’s FAS 3.86% 17.36% 9.57%

Earnings and Valuation

This table compares bebe stores, inc. and Chico’s FAS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
bebe stores, inc. $349.81 million 0.12 -$29.60 million ($4.96) -1.05
Chico’s FAS $2.42 billion 0.41 $281.35 million $0.71 11.01

Chico’s FAS has higher revenue and earnings than bebe stores, inc.. bebe stores, inc. is trading at a lower price-to-earnings ratio than Chico’s FAS, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for bebe stores, inc. and Chico’s FAS, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
bebe stores, inc. 0 0 0 0 N/A
Chico’s FAS 0 9 5 0 2.36

Chico’s FAS has a consensus price target of $13.58, suggesting a potential upside of 73.70%. Given Chico’s FAS’s higher possible upside, analysts clearly believe Chico’s FAS is more favorable than bebe stores, inc..

Dividends

Chico’s FAS pays an annual dividend of $0.33 per share and has a dividend yield of 4.2%. bebe stores, inc. does not pay a dividend. Chico’s FAS pays out 46.5% of its earnings in the form of a dividend. Chico’s FAS has increased its dividend for 7 consecutive years.

Volatility and Risk

bebe stores, inc. has a beta of 2.67, indicating that its share price is 167% more volatile than the S&P 500. Comparatively, Chico’s FAS has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Summary

Chico’s FAS beats bebe stores, inc. on 11 of the 15 factors compared between the two stocks.

About bebe stores, inc.

bebe stores, inc. designs, develops and produces a range of contemporary women’s apparel and accessories. The Company’s product offering includes a range of separates, tops, dresses, active wear and accessories for a range of occasions. It designs and develops its merchandise in-house, which is manufactured to its specifications and it also sources directly from third-party manufacturers. The Company also offers accessories, which include jewelry, optical, fragrance, shoes and handbags. The Company operates stores in the United States, Puerto Rico and Canada. In addition, it has an online store at www.bebe.com that ships to customers in the United States, Canada, Puerto Rico, the United States Protectorates and internationally via its third-party providers, International Checkout and Shoprunner. It has international stores operated by licensees in South East Asia, the United Arab Emirates, Russia, South America, Turkey and other territories.

About Chico’s FAS

Chico’s FAS, Inc. is an omni-channel specialty retailer of women’s private branded, casual-to-dressy clothing, intimates and accessories, operating under the Chico’s, White House Black Market (WHBM) and Soma brand names. The Company is also engaged in the sale of merchandise in its domestic and international retail stores. The Chico’s brand sells private branded clothing focusing on women 45 and older. Chico’s apparel includes the Black Label, Zenergy and Travelers collections. The WHBM brand sells private branded clothing focusing on women 35 and older. WHBM sells clothing and accessory items, including everyday basics, wear-to-work, denim and occasion. It offers black and white color palette. The accessories at WHBM include shoes, belts, scarves, handbags and jewelry. The Soma brand sells private branded lingerie, sleepwear, loungewear, activewear and beauty products focusing on women 35 and older. The lingerie category includes bras, panties, shapewear and swimwear.

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