Ascena Retail Group forecasts 8 percent drop in comp sales

In response to the rapidly evolving retail environment, Ascena Retail Group has updated its third quarter and fiscal year 2017 guidance. The company now expects third quarter comparable sales to decline 8 percent with non-GAAP EPS between 0.04 to 0.06 dollar range. For the full fiscal year, the company projects comparable sales decline of 6 to 7 percent and non-GAAP EPS in the 0.10 to 0.15 dollar range.

Commenting on the updated outlook, David Jaffe, President and CEO, said in a statement, “Industry-wide traffic headwinds and a highly elevated promotional environment have persisted at levels significantly above our expectations, resulting in a miss to our third quarter sales and earnings outlook. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period.”

”We are in process with implementation of technology platforms to support sales and margin, and have begun execution of our fleet optimization program. These initiatives, along with an expanded structural cost reduction scope, are now expected to deliver 250 to 300 million dollars in cost savings as compared to our prior 150 million dollars target. We plan to provide a timeline and additional context regarding this increased target on our third quarter earnings call, scheduled for June 5th,” he added.

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