Ascena closes fiscal year with decline in sales and store traffic
Ascena Retail Group on Monday released its fourth quarter and full year 2017 results, both of which were impacted by the company’s Change For Growth transformation program and a decline in store traffic.
The Change For Growth program is designed to make Ascena’s supply chain and distribution network more cost effective. The company also consolidated its executive leadership structure to sharpen its focus, and appointed Gary Muto to the newly created position of President and CEO of Ascena.
“I am encouraged by the major, decisive actions our team has taken across all aspects of our business,” said CEO David Jaffe. “As part of our transformation efforts, we are investing in leading edge planning and marketing capabilities to support top-line growth and improved margin, and we remain on track to deliver cost savings of $250 to $300 million.”
Jaffe added that transformation-related expenses offset the negative top-line environment, and the company will “look to identify additional sources of cost savings.”
Store traffic was down mid-single digits for the quarter and was a catalyst for the 4% decrease in comparable sales and the decline in fourth quarter net sales to $1.658 billion from $1.812 billion. All of the Ascena brands posted comparable sales declines, except for Catherines, which increased 1%.
Net sales for the year also fell to $6.650 billion from $6.995 billion, with every business posting declines, except for Premium Fashion, which is comprised of Ann Taylor and Loft. Premium Fashion increased slightly to $2.323 billion from 2.331 billion.
For the first quarter of fiscal 2018, Ascena expects its net sales to range from $1.58 billion to $1.62 billion and comparable sales to be down 4% to 5%.
Jaffe said that he expects the decline in store traffic to continue “for the foreseeable future.”
"While comp sales performance was several points better than our guide,” he added. "We were not pleased with the results, and we will not be satisfied until we deliver positive, sustained enterprise-level comp sales.”
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