Ascena Retail Q3 Profit Misses Views

reported weaker-than-expected earnings for the fiscal third quarter on Tuesday. The Mahwah, New Jersey-based company posted a quarterly profit of $24.4 million, or $0.15 per share, versus a year-ago profit of $33.2 million, or $0.20 per share. Excluding non-recurring items, the company's adjusted earnings from continuing operations slipped to $0.18 per share from $0.27 per share. Its net sales rose 0.5 percent to $1.15 billion. However, analysts were expecting a profit of $0.20 per share on revenue of $1.16 billion. The average estimate among 8 Estimize users was for earnings of $0.20 per share and revenue of $1.16 billion. Its combined same-store sales slipped 1 percent in the quarter. Gross margin in the third quarter increased to $675.1 million, or 58.7 percent of sales, versus $657.7, or 57.4 percent of sales, in the year-ago quarter. Its operating income slipped to $34.4 million from $53.7 million. Ascena Retail ended the quarter with cash and cash equivalents of $208.9 million and total debt of $155.0 million, versus $213.2 million of cash and cash equivalents and $225.0 million of total debt at the end of the year-ago quarter. David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., said, "Looking back on the third quarter, we saw strong performance at Lane Bryant, maurices, and Catherines, and are excited about the major marketing initiatives that were launched this quarter at Lane Bryant and dressbarn. While dressbarn performance was softer than expected in the third quarter, weather and receipt flow from the ports were major factors, and we remain confident in the momentum being built. Finally, at Justice, Brian Lynch and the executive leadership team are actively developing new marketing and pricing strategies for Fall, which we look forward to introducing during July, in time for back to school." Ascena Retail reaffirmed its forecast for adjusted earnings from continuing operations of $0.70 to $0.75 for the fiscal year 2015. Ascena Retail shares fell 1.23 percent to $14.40 in after-hours trading.