Published
Mar 7, 2017
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Ascena sales fall, misses earnings guidance in second quarter

Published
Mar 7, 2017

Ascena reported on Monday the financial results for its second quarter. The company posted a net loss of $0.18 per diluted share, which missed its expectations of a loss in range of $0.11 and $0.08.


Ascena Retail Group

 
Net sales fell to $1.748 billion from $1.842 billion, with comparable sales decreasing 4%. All of the Ascena brands posted comparable sales decreases, with the exception of Catherines, which was flat for the period.
 
David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., commented, "Reflecting on our second quarter results, we saw a continuation of trends that have been in place for some time. While we remain generally pleased with selling performance during peaks, our base business remained soft due to ongoing store traffic headwinds and overall customer price sensitivity, which have become persistent issues impacting our larger sector. While our second quarter comp sales were in line with our guidance, we were forced to be much more promotional than planned to achieve this level of performance."

Jaffe added that the company continues to aggressively expand its omnichannel to offset e-commerce’s impact on brick-and-mortar and to better serve its customers online.
 
Gross margin on a GAAP basis fell to $946 million, or 54.1% of sales, SG&A expenses on a GAAP basis were $538 million, or 30.8% of sales, and buying, distribution, and occupancy (BD&O) expenses on a GAAP basis were $320 million, or 18.3% of sales. The company also incurred an operating loss of $45 million, or 2.6% of second quarter sales, and the net loss was $35 million compared to a loss of $23 million in the prior year.
 
Following the second quarter performance, Ascena reaffirmed its non-GAAP fiscal year earnings per share guidance of $0.37 to $0.42, and issued its third quarter non-GAAP EPS guidance of $0.07 to $0.12.

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