Goldman analyst downgrades Chico's

Has the turnaround at Chico's FAS run out of steam?

Goldman Sachs Analyst Michelle Tan seems to think so, putting the Fort Myers-based retailer's stock on the investment bank's “conviction sell” list.

In a report to clients on July 26, Goldman says Chico's suffers from high expectations by investors who believe the women's apparel company can continue to post big jumps in earnings.

But Tan says Chico's posted “surprisingly weak” relative results in the first quarter and its momentum has been decelerating. For example, Tan says Chico's ran six different offers to customers in July compared with three a year ago and it held a special VIP promotion earlier and longer than the one last year. Chico's gross margin increases and earnings fell short of its peers, Tan says.

Goldman now has an $8 price target for Chico's shares (symbol: CHS), which traded as high as $16.57 in late April. It recently traded between $9 and $10.

Robert Atkinson, Chico's vice president of investor relations, says the company doesn't comment on analysts.