Ascena Retail Group Inc. Tanks On Q4 Miss, Weak Outlook

Ascena Retail Group Inc.

shares tanked in the extended session Monday after the apparel retailer missed fourth-quarter earnings expectations and said it sees "no evidence" of a market improvement. The Mahwah, N.J.,-based retailer also predicted that first-quarter earnings will be lower compared with a year earlier. But Wall Street expects earnings will grow 15 percent. For fiscal 2015, Ascena forecast adjusted earnings of $0.90 cents to $1 a share, versus the Street consensus of $1.25. For the recent period, same-store sales fell 2 percent while operating earnings fell to 1.9 percent of total sales compared with 4.9 percent a year earlier. Net sales fell 1.3 percent while expense for sales, general and administrative operations grew to 29.1 percent of sales, from 27.7 percent last year. The company blamed higher expense on payroll growth and efforts to boost "synergies." Ascena Chief Executive David R. Jaffee said results for the recent period were "mixed," with continued soft traffic. Same-store sales fell 10 percent at its Justice stores and were down 7 percent for its Lane Bryant chain. Maurices and Dressbarn were nearly flat while Catherines comparable sales' grew 7 percent. Fourth-quarter net income fell to $15.9 million, or $0.10 cents a share, from $38.3 million or $0.24 cents a share last year. Excluding items, earnings were $0.13 cents a share. Sales fell to $1.18 billion, from $1.2 billion a year earlier. That compared with a Wall Street expectation for adjusted earnings of $0.18 a share, on sales of $1.2 billion. In the after-hours session, Ascena changed hands recently at $14.20 a share, down 14 percent.