Market Overview

Ascena Retail Q1 Profit Beats Expectations, Shares Surge

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Shares of Ascena Retail Group Inc (NASDAQ: ASNA) surged over 9 percent in after-hours trading Tuesday after the company reported better-than-expected earnings for its fiscal first quarter.

The Mahwah, New Jersey-based company posted a quarterly loss of $18.1 million, or $0.10 per share, compared to a year-ago profit of $53.5 million, or $0.32 per share. Excluding items, the company's adjusted earnings came in at $0.36 per share.

Its revenue climbed 40 percent year-over-year to $1.67 billion. However, analysts were expecting earnings of $0.29 per share on revenue of $1.78 billion.

For the legacy ascena brands, comparable sales slipped 3 percent to $1.077 billion, while non-comparable sales rose 8 percent to $48.3 million. Wholesale, licensing and other revenue gained 35 percent to $45.4 million in the quarter.

Gross margin narrowed to 53.6 percent of sales from 58.2 percent on sales.

David Jaffe, President and Chief Executive Officer of ascena retail group, inc., said, "On the operating front, we were pleased with first quarter earnings, which exceeded our expectations. We saw strong sales performance at maurices and Lane Bryant, and significant gross margin rate recovery at Justice, Ann Taylor and LOFT. We continue to execute well against controllable factors, and believe we have compelling product and the appropriate level and mix of inventory to maximize our holiday opportunity."

Ascena Retail projects full-year earnings of $0.75 to $0.80 per share.

Ascena Retail shares surged 9.34 percent to $12.88 in the after-hours trading session.

Posted-In: lossEarnings News Guidance

 

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