Ascena updates Q2 guidance, anticipates loss
Ascena Retail Group reported steady results for its holiday period, but it wasn’t enough to deliver its forecasted second quarter numbers.
The New Jersey-based womenswear group announced on Monday that it now expects a Q2 loss in the range of 23 to 28 cents per share, compared to a range of 0.25 to 0.15 cents.
Still, holiday comp sales were up 3 percent, same as quarter-to-date enterprise level comp sales. A comparable sales fall of 8 percent in Ascena’s Plus Fashion segment was offset by its Premium Fashion segment, which saw sales jump 12 percent.
“We are pleased to have delivered enterprise comp sales and margin growth over the holiday period, although we continue to strive for more balanced performance across our brands,” explained CEO, David Jaffe.
Among its premium fashion labels, Ann Taylor sales were up 7 percent, while Loft sales jumped 14 percent.
Meanwhile, sales at its Value Fashion segment saw a small jump of 2 percent with sales up 2 percent and 3 percent at maurices and Dressbarn respectively.
“At our Kids segment, Justice store traffic slowed as we moved through the holiday period, requiring aggressive clearance activity to address its highly seasonal specialty assortment prior to Christmas. And at our Plus segment, we have made substantive changes to the Lane Bryant apparel assortment to address fashion missteps from our prior quarter, and believe we will be better positioned as we move into spring.”
Sales fell the most at Lane Byrant, falling by 9 percent.
“While we expect comp sales will be in line with our second quarter guide, elevated clearance activity at our Plus and Kids segments have pressured gross margin rate and as a result, we now expect a loss of 23 to 28 cents per share for the quarter,” Jaffe concluded.
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