- Prachi Singh |
Ascena Retail Group, Inc. for its fourth quarter, reported adjusted earnings of 0.07 dollar per diluted share compared to 0.05 dollar per diluted share in the year-ago period. Adjusted earnings for full year were a loss of 0.02 dollar per diluted share compared to adjusted earnings of 0.22 dollar per diluted share in the year-ago period. Net sales for the fourth quarter were 1,766 million dollars compared to 1,658 million dollars in the year-ago period, with the increase caused by a 4 percent increase in comparable sales and approximately 88 million dollars of sales associated with the additional week.
Commenting on the company’s trading, David Jaffe, Chief Executive Officer of Ascena Retail Group, said in a statement: “Our fourth quarter reflected sequential comp improvement across all our brands, and the first enterprise-level positive comp quarter for Ascena since the second quarter of fiscal 2015. We entered fiscal 2019 with good base momentum, and key growth initiatives beginning to gain traction across our brands."
Highlights of Ascena’s Q4 and full year results
The company reported GAAP income of 0.17 dollar per diluted share compared to a GAAP loss of 0.08 dollar per diluted share in the year-ago period, based on a 4 percent comparable sales increase and the benefit of an additional week related to the company's fiscal calendar. For full year, GAAP loss was 0.20 dollar per diluted share reflecting a comparable sales decline of 2 percent and costs associated with the company's ‘Change for Growth’ transformation program, partially offset by the benefit of the additional week compared to 5.48 dollars per diluted share in the year-ago period.
Gross margin increased to 1,015 million dollars or 57.5 percent of sales, for the fourth quarter as a result of increased comparable sales and approximately 50 million dollars associated with the additional week. Gross margin rate increased 10 basis points, with strong rate improvement at our premium fashion and kids fashion segments, offset by declines at plus fashion and value fashion segments.
Operating income for the fourth quarter was 53 million dollars compared to an operating loss of 9 million dollars in the year-ago period, while on a non-GAAP adjusted basis, operating income was 43 million dollars compared to 44 million dollars in the year ago period.
The Company reported net income of 33 million dollars or 0.17 dollars per diluted share in the fourth quarter compared to a net loss of 16 million dollars or 0.08 dollar per diluted share, in the year-ago period. The company closed a net 185 stores during fiscal 2018, which the company said, primarily reflects its continuing fleet optimization program.
Fiscal year 2019 first quarter and full year outlook
The company is re-instituting full year guidance and expects fiscal 2019 non-GAAP earnings per share ranging from 0 to 0.10 dollar, supported by net sales of 6.45 to 6.55 billion dollars, comparable sales up low single digits; gross margin rate of 57.6 percent to 58.1 percent, operating expense growth of approximately 1 percent; and operating income of 120 to 140 million dollars.
The company added that first quarter non-GAAP earnings per share is estimated in the range of loss of 0.04 dollar to earnings of 0.06 dollar, reflecting a collective unfavourable timing impact of approximately 0.10 dollar related to the additional week in fiscal 2018. The company's estimated first quarter earnings per share outlook is supported by assumptions that net sales would be in the range of 1.54 to 1.56 billion dollars; comparable sales flat to up 2 percent and gross margin rate of 60 percent to 60.5 percent.