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(Chico's article updated with analyst commentary.)



) -- Women's apparel retailer


(CHS) - Get Chico's FAS, Inc. Report

swung to a profit in the fourth quarter and initiated a dividend.

Still shares are sinking 2% to $13.64, as Chico's turnaround story has, for the most part, according to analysts, already been factored into the stock.

During the quarter, the company earned $17.5 million, or 10 cents a share, compared with a loss of $40.5 million, or 23 cents, a year earlier. Analysts expected Chico's to earn 5 cents a share.

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Sales rose 17% to $435.7 million from $373.4 million, while same-store sales spiked 15%.

Chico's also initiated a dividend of 4 cents that will be payable on March 22 to shareholders of record as of March 8. This is the fist dividend the company has offered since it began trading publicly.

While Chico's is undoubtedly one of the strongest companies among the women's retailers, UBS analyst Roxanne Meyer is still waiting for it to achieve or surpass a double-digit operating margin target.

"We believe the comparable sales momentum will continue as a result of improved product, as well as Chico's position as a 'first mover' as it regains market share from its underperforming baby-boomer competitiors," Stifel Nicolaus analyst Richard Jaffe wrote in a note. "We believe Chico's turnaround is well on its way; however, much is recognized by the Street, evident in the current share price."

As a result, Jaffe has a hold rating on the stock.

-- Reported by Jeanine Poggi in New York.

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