Share price as of Tuesday's close:

$28.60

Share price now:

$33.38

Change:

16.7%

Volume:

6.6 million shares, daily average 399,100 shares

Last time this high:

All-time high

52-week high:

$29.50

52-week low:

$15.25

Forward P/E before announcement:

17.3 (based on $1.65 a share)

Forward P/E after announcement:

n/a

THERE WAS NO

skirting around one clothing chain's blowout results.

A sharp jump in profits for its October quarter and stunning same-store sales for November prompted Dress Barn to raise its guidance for the rest of its fiscal year. Investors shopping for a promising retail play weren't afraid to pay full price. Dress Barn's shares gained 17% to an all-time high of $33.38 on Wednesday.

"Retailers have been doing better than people expected the last few months," says Erin Moloney, an analyst at San Francisco investment bank Merriman Curhan Ford & Co. "Dress Barn got much more fashion-current than it had been historically. This is a trend it has been moving toward in recent years. And with the value and fashion for the price, it's seeing more loyalty from its customer base." (Moloney doesn't own shares of Dress Barn; Merriman Curhan Ford doesn't have an investment-banking relationship with the company.)

For its first quarter ended Oct. 29, Dress Barn's earnings soared 187% to $20.4 million, or 64 cents a share, mocking the Thomson First Call consensus estimate of 40 cents. A year ago the Suffern, N.Y., company earned $7.1 million, or 24 cents a share.

Revenues surged 62% to $318.9 million on better-than-expected results from both Dressbarn and Maurices stores. The Maurices chain, acquired earlier this year, wasn't reflected in the year-ago figures. However, sales at stores open at least one year, a key retail barometer, rose 9% for the quarter. Same-store sales take Maurices' year-ago results into account.

The company attributed the blowout results in part to its shift to a "trend-right" product mix with a "diversified color palette." It added that gross margins improved to 41.4% of sales from 36.9% on higher sell-through and fewer inventory markdowns.

The company's merchandising success has carried into November. In a separate announcement Dress Barn reported that same-store sales for the month swelled 10%. That included a 7% increase at Dress Barn stores and a 16% improvement at Maurices. Total sales for the month ballooned 60% to $99.3 million.

The 43-year-old company sells career and casual clothing targeted at women ages 35 to 55 through its 797 Dressbarn stores. Apparel aimed at younger women and girls ages 17 to 34 is stocked by its 511 Maurices stores. Prices are moderate; a Dressbarn holiday 2005 catalog lists a dress-and-shawl combination for $70 and a blouse for $50. About 85% of the company's 797 Dressbarn stores offer plus sizes.

"Sales have been quite good for six months in part because of its strength in the plus-size area of the core Dressbarn stores," says Dennis Van Zelfden, an analyst at Suntrust Robinson Humphrey, an investment bank based in Atlanta. "That is due to the remerchandising of the whole chain over the past 18 months." (Van Zelfden doesn't own shares of Dress Barn; an affiliate of Suntrust Robinson Humphrey has a non-investment-banking relationship with the company.)

The results haven't been lost on investors. Through Wednesday's close, shares of Dress Barn are up 90% year-to-date.

Dress Barn completed its acquisition of Maurices in January, paying $320 million. At the time, Maurices had annual sales of $366 million. In addition to catering to younger customers, Maurices stores are often found in small towns where the only major competitor is Wal-Mart Stores.

"Put it all together and when you get sales as strong as they are getting, you see significant operating margin levels," says Suntrust's Van Zelfden. "Hence the earnings growth. The momentum we've seen recently is sustainable over the near term. Maybe not 10% growth in comps, but to get good earnings growth we don't need 10%, just 4%. What the market is saying is we believe it will be above 4%. So, we still rate it Buy."

The strong first-quarter results led Dress Barn to boost earnings guidance for its fiscal year ending July 29 to between $1.90 and $1.95 a share, from its previous guidance of $1.60 to $1.65. First Call had a full-year forecast of $1.65 a share. The company foresees comparable-store sales increasing about 4% for the remainder of the fiscal year.

Quote:
"You have to give credit to how well this is being managed," says Moloney of Merriman Curhan. "They are really creating a new company every day with the addition of the Maurices business. It's hard to look back and compare, but they are executing very well at both chains. Even with the stock's run-up, I still think it's a buy. The outlook is conservative because the company only assumes a comp increase of 4%. If it retains [its current pace] these estimates will prove to be conservative."