NEW YORK (TheStreet) -- Chico's FAS (CHS) - Get Report stock closed lower by 2.64% to $12.17 on heavy trading volume on Monday as analysts expect the retailer to report disappointing fiscal 2015 third quarter financial results on Tuesday before the market open.

Chico's stock rating was downgraded to "underperform" from "peer perform" at Wolfe Research, Barron's reports.

The firm also lowered its price target to $11 from $16 because of the company's boost in promotions and lower demand in the women's apparel sector, Barron's noted.

Chico's is also being affected by a warm autumn, which increased inventory for many retailers in the third quarter, MKMPartners said in an analysts note this morning.

MKM analysts dropped Chico's stock price target to $13 from $15 and lowered its fiscal 2015 third quarter earnings estimate by 3 cents to 18 cents per share, below the consensus of 20 cents per share.

By the end of the trading day, 4.2 million shares of Chico's had exchanged hands, compared with its average daily volume of 2.4 million shares.

Separately, TheStreet Ratings team rates CHICOS FAS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate CHICOS FAS INC (CHS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CHS's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • CHICOS FAS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CHICOS FAS INC increased its bottom line by earning $0.42 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.81 versus $0.42).
  • Net operating cash flow has decreased to $70.34 million or 17.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The share price of CHICOS FAS INC has not done very well: it is down 18.56% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • You can view the full analysis from the report here: CHS

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.