Ascena Retail Group (ASNA 4.78, +0.77) has
spiked 19.2% pre-market after beating quarterly expectations and issuing mostly
The owner of apparel brands like Ann Taylor, LOFT, maurices, dressbarn, Lane Bryant, Catherines, and Justice, reported above-consensus fourth quarter earnings of $0.07 per share on a 6.5% year/year increase in revenue to $1.77 bln, which was also ahead of expectations.
Ascena Retail Group expressed some caution in its guidance for the first quarter, but the company expects to make up the shortfall during the remainder of the fiscal year. For the first quarter, the company expects below-consensus earnings between -$0.04 per share and $0.06 per share while revenue is expected between $1.54 bln and $1.56 bln, which is ahead of market expectations. Comparable sales are expected to increase up to 2% while gross margin is expected between 60.0% and 60.5%.
Looking farther out, the company expects to report full-year earnings between break-even and $0.10/ share on revenue between $6.45 bln and $6.55 bln. Comparable sales are expected to show a low single-digit increase while gross margin is expected between 57.6% and 58.1%.
Returning to fourth quarter results, comparable sales grew 4%, ahead of expectations for growth of up to 2.0%. Gross margin was reported at 57.5%, which was also ahead of the company's guidance. Gross margin improved by 10 basis points year/year, due to strong improvements at Ann Taylor, LOFT, and Justice. The improvements were offset by declines at Lane Bryant, Catherines, maurices, and dressbarn.
The company was able to generate comparable sales growth at all of its brands except for dressbarn, where comparable sales declined 5%. Total inventory declined 3% year/year to $623 mln.
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