Marley's Fss Inc Financial Analysis

Introduction The objective and goal of this report is to pinpoint the negatives from a financial analysis on Chico's FAS, Inc, and why you shouldn’t invest in them. There are weaknesses and strengths in any business, no matter what industry you are in. The company that we did our analysis on, happens to be in a sector that has been struggling for the past couple years. They have been trying to recoup their lost sales, year after year, that they have lost to major online retailers. In our financial analysis, we go in depth on how Chicos has been losing Gross margin, inflating their stock prices, and how if they don’t do anything productive with their newly issued debt, they are not going to be around much longer. Background
Chico's

The sales have relatively stayed steady even with the whole sector losing market share to online giants like Amazon. The problem is that they had to lower their profit margins to get close the sales in the prior years. They tried to keep net income up by laying off 200 employees, and this just temporary solved the problem. Eventually, their margins are going to drop so much, they are not going to be able to compete with Ecommerce. It is because Ecommerce don't have the same expenses as

Most likely it is because they are getting rid of property and closing stores. Cash from Financing Activities:They have 17 percent of their assets in cash, and they don’t know what to do with it. The only thing their management wanted to do was to buy back $300 million worth of their shares. It does pump up the share price because it decreases the amount of shares outstanding, but it’s the least productive investing activity a company can do. Balance Sheet Analysis:
In 2016 Chicos started issuing debt. This is manly because of the new CEO and how upper management might want to make a acquisition in the near future. Since interest rates are only increasing, this would be logical. The problem is that any acquisition they do, will end up being a brick and mortar store. The Chicos management has a bad taste in their mouth about what happened with them and Boston Proper, the online retail catalog. At this point in time, they have 1.464 million dollars In short term debt and 6.18 million in short term debt. The balance sheet is the staying power of the company and this debt decreased their equity by 20 percent from 5 years