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.