Ascena Q2 sales saved by Ann Inc. acquisition

By

Obi Anyanwu

Published
Mar 3, 2016

Ascena Retail Group, Inc. on Tuesday reported the financial results for its fiscal second quarter ended January 23, 2016. The company released results including Ann Inc. in both current and prior-year periods.

 
Net sales for the second quarter were $1.842 billion compared to $1.289 billion last year, with the increase driven by the acquisition of Ann Inc. The second quarter earnings came in just above the pre-announced range that was shared in mid-January, according to David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc. The solid performance was due mainly to the strengthening performance of Loft and margin rate favorability at Justice.
 
Jaffe added, “We are pleased with the progression of the Justice turnaround, and remain confident in our full year plan. Maurices delivered another solid quarter, and we continue to see improvement at Lane Bryant. Our focus on tight inventory management allowed us to deliver strong gross margin rate improvement for the quarter despite changing customer behavior around Black Friday, and continued traffic headwinds that weighed on sales performance. We exited the second quarter with inventory well-managed, and will remain disciplined in this area as we continue to navigate the dynamic consumer landscape."

Despite the positive outlook, the company was still down in the second quarter. Net sales for the quarter, inclusive of Ann Inc., were $1.843 billion compared to $1.936 billion in 2014. Total comparable sales were down 6% and down 5% inclusive of Ann, and comparable sales for the company’s legacy brands decreased to $1.119 billion from $1.191 billion. Wholesale, licensing and other revenues also decreased 21% to $37.5 million from $47.6 million.
 
Ascena reaffirms its fiscal 2016 full year EPS guidance to range from $0.75 to $0.80.