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A Healthy Spring for Chico's

By Jeremy MacNealy – Updated Nov 15, 2016 at 12:35AM

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The women's apparel retailer starts off the new fiscal year strong.

Little detail was provided in the latest comparable same-store sales figures for Chico's FAS (NYSE:CHS), but Wall Street saw all it needed to see -- strong sales.

The women's clothing retailer, based in Ft. Myers, Fla., posted a 5.2% increase in March comps, while overall sales improved by 22% compared to the same period a year ago. These figures tell us two things: Older stores are performing better, and new units are hitting the ground running. While management wasn't specific about what's working and what's not, based on current trends I see taking place among other retailers, I have a good hunch about Chico's.

A month ago, in a piece by my colleague Alyce Lomax, we learned that Chico's was clearing out older inventory in order to get off to a fresh start this spring. Since the lack of casual-wear items plagued the retailer in the fall, no doubt it is intent on not making that mistake twice -- especially when the competition, including Christopher & Banks (NYSE:CBK), Ann Taylor (NYSE:ANN), and Dress Barn (NASDAQ:DBRN) -- all benefited from having the right balance of "wear now" merchandise.

Not only do I expect an improved mix of casual apparel from Chico's this spring, but there is a good bet that the dress category -- a strength of the company -- is leading the charge. Guess? (NYSE:GES), Polo Ralph Lauren (NYSE:RL), and G-III Apparel (NASDAQ:GIII), a manufacturer of Calvin Klein's suits and dresses, have all declared this to be the year of the dress. I recently visited White House-Black Market, a retail concept owned by Chico's, and I came away feeling that with its current dress lineup, it was well-prepared for another strong year.

Chico's was looking for a fresh start this spring. By all indications, it found it.

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Fool contributor Jeremy MacNealy has no financial interest in any company mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Chico's FAS, Inc. Stock Quote
Chico's FAS, Inc.
CHS
$4.81 (-1.43%) $0.07
Ralph Lauren Corporation Stock Quote
Ralph Lauren Corporation
RL
$85.43 (-3.35%) $-2.96
G-III Apparel Group, Ltd. Stock Quote
G-III Apparel Group, Ltd.
GIII
$15.68 (-1.32%) $0.21
Guess?, Inc. Stock Quote
Guess?, Inc.
GES
$15.07 (-3.58%) $0.56
Christopher & Banks Corporation Stock Quote
Christopher & Banks Corporation
CBK
$0.00 (-98.53%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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