Chico's Profit Slides

Chico's(CHS Quote) reported a 10% drop in first-quarter profits amid weak same-store sales, but the earnings managed to top Wall Street's expectations.

Shares of the women's apparel retailer were climbing 98 cents, or 3.8%, to $26.60 in after-hours trading Wednesday.

Chico's first-quarter profit fell to $47.2 million, or 27 cents a share, from $52.5 million, or 29 cents a share, a year earlier. Sales increased 16% to $453.1 million.

Analysts polled by Thomson Financial projected earnings of 26 cents a share and sales of $457 million.

Chico's same-store sales, or sales at stores open at least a year, slid 1.6% in the quarter. In addition, May comps are currently trending down in the mid-single-digit range, the company said.

"Chico's May sales trends continue to show softness; however, we are pleased with our gross margins," Scott Edmonds, president and CEO, said in a statement. "As previously stated, we expect to see steady improvement in the Chico's same-store sales performance as we move closer to the fall selling period."