It depends on the nuance of what you are (really) aiming to say...
NOT BAD! - the effect of saying this can vary on the tone of voice. (Therefore, the exact intent is ambiguous when written.)
It can be A NICE COMPLIMENT or it can be NEUTRAL, or it can be NEGATIVE.
This all depends on the tone of voice.
When I first read what you have written, I was inclined to think that you are being a bit critical. Is that the intent?
NICE DRESS - IT LOOKS GREAT ON YOU!
YOU WEAR IT WELL!
NOT TOO SHABBY!
NOT TOO BAD.