。
She's wearing a lovely dress now.
Literal
She [topic-は] now [contrast-は] lovely dress [object-を] is-wearing.
すてきな ('lovely, wonderful, marvelous') is one of those adjectives that sounds slightly feminine in everyday speech — though widely used by all speakers, it's especially associated with admiration and complimentary descriptions. ドレス specifically refers to a Western-style dress (often formal or evening wear); for everyday clothes, the broader 服 covers everything. The ~ている form here describes the resulting state of having put the dress on, not the act of dressing — the same resulting-state reading 着る takes whenever it expresses 'is wearing.'