Net sales for the first quarter at Ascena Retail Group were 1,297 million dollars compared to 1,339 million dollars in the year-ago period, which the company said reflect flat comparable sales for the quarter and a decrease in non-comparable sales which include the impact of the store closures. The company reported net income from continuing operations of 32 million dollars or 16 cents per diluted share compared to a net loss from continuing operations of 24 million dollars or 12 cents per diluted share, in the year-ago period.
Commenting on the first quarter trading, Gary Muto, Chief Executive Officer of Ascena said in a statement: “We were pleased to have exceeded our adjusted operating income expectations for the first quarter through better than expected improvement in operating expenses. While we are encouraged by the progress we are making, we know there is more work to be done. The steps we are taking now set us up to provide consistent profitable performance and enhance shareholder value over the longer term.”
Highlights of Ascena’s Q1 performance
Gross margin for the quarter decreased to 773 million dollars or 59.6 percent of sales compared to 801 million dollars or 59.9 percent of sales in the year-ago period due to higher promotional activity at our Kids Fashion and Premium Fashion segments, partially offset by increased margins at our Plus Fashion segment. Operating income was 40 million dollars compared to 1 million dollars in the year-ago period, and primarily reflects the expense reductions, offset in part by the gross margin dollar declines.
For the second quarter of fiscal 2020 for the consolidated continuing operations of the Premium Fashion, Plus Fashion, and Kids Fashion segments, Ascena expects net sales of 1.200 to 1.225 billion dollars; comparable sales of negative low single digits; gross margin rate of 51.2 percent to 51.7 percent; and adjusted operating loss of 40 million to 60 million dollars.