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Sector Snap: Women's Apparel 1Q Results Improve

The Associated Press

NEW YORK (AP) — Women's apparel retailers Chico's FAS Inc. and Charming Shoppes Inc. on Wednesday reported first-quarter results that show some signs of stabilization in one of the hardest-hit sectors.

Women's or "missy" apparel retailers have suffered as consumers spend less since moms are more likely to cut back on themselves before their families. Also, some women's apparel has been perceived as less than fashionable.

In response, retailers have cut costs, closed stores, changed management and worked on improving their product assortment.

First-quarter results indicate their efforts may be paying off.

Chico's FAS reported first-quarter profit rose 14 percent, helped by lower expenses. Sales were nearly flat at $410.6 million.

Sales at stores open at least a year, known as same-store sales, fell 3.2 percent during the quarter, compared with a 17.5 percent drop a year ago.

Sterne Agee & Leach analyst Margaret Whitfield, who rates Chico's a "Buy," said the quarter could be seen as a starting point for a recovery.

"Improving trends have been visible at Chico's earlier than planned, with fall expected to provide further improvement," she wrote in a note to investors on Wednesday. "Store presentation and merchandise selection has improved with key items and new fashion trends tested for fall with good results."

Chico's shares rose 65 cents, or 7.3 percent, to $9.50 during afternoon trading, after reaching a 52-week high of $9.89. The stock had traded between $1.72 and $9 during the past 52 weeks.

Meanwhile, Charming Shoppes Inc., which operates Lane Bryant and Fashion Bug stores, reported a smaller than expected fiscal first-quarter loss. Shares rose 11 cents, or 3.1 percent, to $3.69 during afternoon trading. The stock has traded between 45 cents and $6.35 during the past year.