Ascena Retail Shares Fall Amid Q2 Beat, Lackluster Guidance
Ascena Retail (NASDAQ: ASNA) reported its second-quarter financial earnings on Monday. The clothier is currently trading down $.87 per share after being up $0.58 during Monday's afternoon trading session.
Ascena said that its second-quarter earnings dropped 15 percent due to Justice clothier brand not producing enough profit and its general increasing operating expenses.
As for guidance, the company has lowered its earnings per share guidance and is now estimating $1.00 to $1.05 per share; this was amid an already lowered guidance of $1.10 to $1.15 per share.
For this quarter, earnings from continuing operations were $0.19 per diluted share. Ascena posted a profit of $31.9 million, which was down from $47.2 million a year earlier. Some good news was that revenue increased to $1.27 billion, which is up 2.3 percent due to new store additions.
David Jaffe, President and CEO of Ascena Retail Group, commented, “Second quarter net income was slightly above our revised expectations, despite softer than expected sales in January driven primarily by challenging weather that continued to negatively impact sales into early March. However, in warmer regions sales have been in line with expectations. We are implementing promotional strategies and receipt flow adjustments to bring inventory balances back to targeted levels.”
Numerous companies have blamed the winter storms for their lack of sales ,including Ascena.
“However, in warmer regions sales have been in line with expectations," Jaffe added. "We are implementing promotional strategies and receipt-flow adjustments to bring inventory balances back to targeted levels."
Same-store figures fell three percent; the majority of analysts expected a growth rate of two percent. E-commerce sales skyrocketed 28 percent to $149 million.
Gross margins also jumped 0.8 percent to to 54.3 percent.
Shares of the retailer have ranged from $17.70 to $22.68 per share so far this year.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.