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Ascena Retail Group: Comparable sales decline impacts Q1 earnings

Ascena Retail Group reported GAAP earnings of 0.03 dollar per diluted share for the first quarter compared to 0.07 dollar per diluted share in the year-ago period. The company said that the decrease was primarily driven by the comparable sales decline of 5 percent. Non-GAAP adjusted earnings were 0.11 dollar per diluted share compared to 0.18 dollars in the year-ago period.

Commenting on the first quarter trading, David Jaffe, Chief Executive Officer of Ascena Retail Group said in a media release, “Our first quarter adjusted earnings per share of 11 cents was in the middle of our guidance range, but represented a disappointing quarter. We were unable to capitalize on the improving macro traffic environment due to fashion missteps that we cannot afford in today's environment. While we were not pleased with this quarter's performance on the top line, we believe the capabilities we are building and the expense efficiencies we are driving will support significant flow-through as we improve our overall merchandise execution.”

First quarter result highlights

Net sales for the first quarter were 1.590 billion dollars compared to 1.678 billion dollars in the year-ago period. The decrease in sales, Ascena added, reflected the impact of a 5 percent comparable sales decline, which was caused primarily by a mid-single digit decline in average selling price, offset in part by double digit transaction growth in the direct channel. The three hurricanes which impacted the southern United States and Puerto Rico during the first quarter, negatively impacted the sales by approximately 11 million dollars.

Operating income was 40 million dollars compared to 51 million dollars in the year-ago period. The company reported net income of 7 million dollars or 0.03 dollar per diluted share in the first quarter compared to 14 million dollars or 0.07 dollar per diluted share in the year-ago period.

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