Ascena Q1 earnings dip despite sales jump
New Jersey-based womenswear group Ascena Retail announced on Monday a small net sales jump, while earnings dipped 10.6 percent for its fiscal first quarter ended November 3, 2018.
Earnings fell due to the impact of a lower gross margin rate and unfavorable timing related to the adoption of new revenue recognition accounting standard.
That’s despite a 3 percent increase in comparable sales and net sales for the first quarter of Fiscal 2019 of $1,592 million, up 0.1 percent from $1,590 million in the year-ago period. The group owns brands such as Dressbarn, Maurices, Loft and Justice, to name a few.
Still, net income dropped to $6 million, or $0.03 per diluted share in the first quarter of Fiscal 2019, compared to net income of $7 million, or $0.03 per diluted share, recorded during the same period last year.
“Our first quarter results represent another step forward in our journey to transform ascena into a more agile, profitable company," explained David Jaffe, Chairman and CEO.
"We delivered a 3 percent comparable sales increase, driven by strength at our Premium and Kids segments. Adjusted earnings per share of 6 cents came in at the top of our guide, driven by better than expected top-line growth."
As part of its fleet optimization program, Ascena closed 31 stores across its various banners in Q1, and opened 5. The group now operates 4,596 locations.
“We have built a solid foundation over the course of our transformation, consisting of new brand leadership and significantly enhanced enterprise capabilities. We've strengthened this foundation through an enhanced understanding of our customer that we have developed from our recently launched customer insights initiative. We believe our efforts are beginning to produce positive results, and are focused on building upon our momentum,” added Jaffe.
Moving into the second quarter, the company expects net sales of $1.675 to $1.705 billion and loss per share in the range of $0.25 to $0.15. Meanwhile, comparable sales are expected to grow 2 to 4 percent.
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