Ascena Retail cuts fiscal 2014 profit outlook

Published on NewsOK Modified: January 13, 2014 at 8:04 am •  Published: January 13, 2014
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SUFFERN, N.Y. (AP) — Ascena Retail Group Inc. is cutting its fiscal 2014 adjusted earnings forecast because of weaker-than-expected sales during the critical holiday period.

Its stock declined in almost 9 percent premarket trading on Monday.

The company, which runs the Lane Bryant and dressbarn brands, said that it now foresees full-year adjusted earnings between $1.10 and $1.15 per share. Its prior guidance was for $1.25 to $1.30 per share.

Analysts polled by FactSet expect earnings of $1.32 per share.

Ascena said its revised outlook assumes a low single-digit increase in spring sales at stores open at least a year and a double-digit rise in online sales.

For the fiscal November-December period, sales at stores open at least a year declined 2 percent. Sales at Lane Bryant stores open at least a year increased 8 percent, while dressbarn edged up 1 percent. Sales at Catherines stores open at least a year rose 13 percent, and maurices sales were flat. Sales at Justice stores open at least a year fell 3 percent.

This metric is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Ascena President and CEO David Jaffe said in a statement that the challenges of the holiday season led to increased promotions.

One bright spot was online sales, which rose 27 percent during the period.

When looking at same-store sales and online sales combined, Ascena's consolidated comparable sales climbed 1 percent.

The company's shares fell $1.94, or 8.8 percent, to $20 about 30 minutes before the market open.


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