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No Plus-Size Sales at Casual Male

Unlike the clothes it sells, big-and-tall retailer Casual Male (Nasdaq: CMRG  ) did not have a plus-sized first quarter. The company basically broke even on revenues that were 3% lower than last year, missing analyst expectations on both counts.

Yet if the retail margin protection Casual Male experienced is any indication, it seems it's bumping along the bottom here and waiting for the right catalyst to bring it up.

Same-store sales fell 2% for the quarter, but its core business lines were down 4.7% from last year. However, as it witnessed last quarter, it was able to realize significantly improved conversion rates and higher average purchases. There were fewer customers, but they were buying more things. That bodes well for the future, although the current plight is difficult.

It's a similar situation for Casual Male's main rivals, Men’s Wearhouse (NYSE: MW  ) and Jos. A. Bank (Nasdaq: JOSB  ) . Both are expected to report significantly lower, or flat, earnings this quarter.

Casual Male's new initiative of trying to tap the smaller end of its belt loop -- the 42- to 44-inch waist -- is still in its early stages, but management says it's encouraged so far. It won't be easy to tuck this new size group in; there's still the stigma of shopping at a big-and-tall shop. The retailer will also have to go up against department stores like J.C. Penney (NYSE: JCP  ) , Kohl's (NYSE: KSS  ) , and Macy's (NYSE: M  ) , where the competition is fierce and the margins narrow.

Whether Casual Male's efforts at rebranding itself from a B & T to an XL will succeed, it's bringing out the big guns to make a media splash, and its lifestyle sites have been performing well. Athletic but beefy models like New England Patriots offensive tackle Matt Light are featured prominently in ads on the retailer's LivingXL website, which, along with several other properties, has seen sales rise from $500,000 last year to $3.6 million this quarter.

Casual Male's stock has fallen some 60% over the past year, a fact no investor should take casually. Moreover, it sports a forward earnings multiple nearly 50% higher than either Jos. A. Bank or Men's Wearhouse, and a PEG ratio that's nearly twice as large. Yet it's also true that neither of those men's retailers truly fits into Casual Male's niche, an area it dominates.

With sales trending higher in April and continuing upward into the second quarter, Casual Male may not be bouncing along the bottom for much longer, but could be ready to swell up to a larger size again.

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Fool contributor Rich Duprey owns shares of Casual Male but does not have a financial position in any other stocks mentioned. You can see his holdings. The Motley Fool has a color-coordinated disclosure policy.

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