By late morning, shares had taken off 7.4% to $16.67.
The women's apparel retailer reported net income of 4 cents a share for the three months to Feb. 1. Analysts surveyed by Thomson Reuters had expected net income of 15 cents a share.
Revenue of $610.2 million was 6.4% lower than a year earlier and missed expectations by $45.4 million. Comparable sales decreased 3.4% over the fourth quarter.
Decreased comps reflected "lower average dollar sale and transaction count, primarily as a result of the impact of a highly promotional environment in response to lower traffic," the company said in a statement.
Must Read: J.C. Penney: 'Less Bad' Ain't a Good Thing
TheStreet Ratings team rates CHICOS FAS INC as a Buy with a ratings score of B-. The team has this to say about their recommendation:
"We rate CHICOS FAS INC (CHS) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."