This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ascena Retail Group, Inc. Reports Third Quarter Results

Operating income for the first nine-month period of Fiscal 2012 increased 11.1% to $261.8 million, or 10.8% of sales, compared to $235.7 million, or 10.8% of sales last year. The $26.1 million increase is attributable to increased margin on higher sales, partially offset by an increase in SG&A expenses.

Fiscal Third Quarter Balance Sheet Highlights

The Company ended the third quarter of Fiscal 2012 with $616.5 million in cash and investments, compared to $436.1 million in cash and investments at the end of Fiscal 2011. The Company expects to use a significant portion of its cash and investments balance to partially fund the Charming Shoppes acquisition, which is expected to close in mid-June 2012.

The Company repurchased approximately 2.7 million shares at an aggregate cost of $37.2 million during the first nine months of Fiscal 2012.

Commentary

David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., commented, “Our overall financial performance in the quarter was in-line with expectations and reflects the continued challenging marketplace for retailers and consumers. Our ability to perform well despite these pressures validates the strength of our product, the loyalty of our customers and our strategy to build a compelling, diversified business. We are gratified and excited to powerfully move this strategy forward with the anticipated addition of Charming Shoppes to the Ascena portfolio of brands.”

Reaffirms Fiscal July 2012 Earnings Guidance

The Company today reaffirmed guidance for earnings per diluted share for the fiscal year ending July 2012 in the range of $1.37 to $1.40, excluding the impact on earnings of the pending Charming Shoppes acquisition, which is currently scheduled for a mid-June closing. Items excluded include the impact on earnings from acquisition-related costs during the fiscal third quarter and those anticipated in the fourth quarter, as well as any impact of the acquisition on the combined operating results of the Company. This estimate is based upon various assumptions for the remainder of the year, including a mid-single digit increase in consolidated comparable store sales. The Company plans to end the fiscal year with approximately 2,600 dressbarn, maurices and Justice stores in operation.

Conference Call Information

The Company will conduct a conference call today, May 31, 2012, at 4:30 PM Eastern Time to review its third quarter fiscal 2012 results followed by a question and answer session. Parties interested in participating in this call should dial in at (617) 614-2703 prior to the start time, the passcode is 36779645. The call will also be simultaneously broadcast at www.ascenaretail.com. A recording of the call will be available shortly after its conclusion and until June 30, 2012 by dialing (617) 801-6888, the passcode is 68605679.

About Ascena Retail Group, Inc.

Ascena Retail Group, Inc. is a leading national specialty retailer of apparel for women and tween girls, operating through its wholly-owned subsidiaries, the dressbarn, maurices and Justice brands. The Company operates through its subsidiaries approximately 2,600 stores throughout the United States, Puerto Rico and Canada.

dressbarn offers casual, career and special occasion fashion apparel and accessories at value prices for women ages 35-55, operates 838 stores in 48 states. maurices offers casual and career apparel and accessories at value prices to the fashion-conscious woman, ages 17-34 with a 20-something attitude, and operates 813 stores in 44 states and Canada. Justice offers trend-right apparel and accessories at value prices for tween girls ages 7-14 and operates 920 stores in 46 states, Puerto Rico and Canada.

For more information, visit www.ascenaretail.com, www.dressbarn.com, www.maurices.com and www.shopjustice.com.

Forward-Looking Statements

Certain statements made within this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is readily available in the Company’s most recent Annual Report on Form 10-K for the year ended July 30, 2011 and in its last filed Quarterly Report on Form 10-Q for the quarter ended January 28, 2012.

     

Ascena Retail Group, Inc.

Consolidated Statements of Operations (Unaudited)

(millions, except per share data)

 
Third Quarter Ended

April 28, 2012

  % of Net

Sales

 

April 30, 2011

  % of Net

Sales

Net sales $ 783.3   100.0%   $ 722.8   100.0%
Cost of goods sold, including occupancy and buying costs   (443.4 ) (56.6%)   (404.9 ) (56.0%)
Gross profit 339.9 43.4% 317.9 44.0%
Selling, general and administrative expenses (229.0 ) (29.2%) (210.5 ) (29.1%)
Depreciation and amortization expense   (25.6 ) (3.3%)   (21.0 ) (2.9%)
Operating income 85.3 10.9% 86.4 12.0%
 
Interest expense (0.2 ) -- (0.6 ) (0.1%)
Interest and other income, net 0.8 0.1% 0.9 0.1%
Acquisition-related costs   (6.8 ) (0.9%)   --   --
Income before provision for income taxes 79.1 10.1% 86.7 12.0%
Provision for income taxes   (29.7 ) (3.8%)   (34.9 ) (4.8%)
Net income $ 49.4   6.3% $ 51.8   7.2%
 
Net income per common share:
Basic $ 0.32   $ 0.33  
Diluted $ 0.31   $ 0.32  
Weighted average common shares outstanding:
Basic   153.3     155.7  
Diluted   159.9     161.7  
 

See accompanying notes.

     

Ascena Retail Group, Inc.

Consolidated Statements of Operations (Unaudited)

(millions, except per share data)

 

 

Nine Months Ended

April 28, 2012

 

% of Net Sales

 

April 30, 2011

 

% of Net Sales

Net sales $ 2,413.6   100.0%   $ 2,188.2   100.0%
Cost of goods sold, including occupancy and buying costs   (1,391.1 ) (57.6%)   (1,261.3 ) (57.6%)
Gross profit 1,022.5 42.4% 926.9 42.4%
Selling, general and administrative expenses (685.5 ) (28.4%) (625.7 ) (28.6%)
Depreciation and amortization expense   (75.2 ) (3.1%)   (65.5 ) (3.0%)
Operating income 261.8 10.8% 235.7 10.8%
 
Interest expense (0.7 ) -- (1.9 ) (0.1%)
Interest and other income, net 2.7 0.1% 2.6 0.1%
Acquisition-related costs   (6.8 ) (0.3%)   --   --
Income before provision for income taxes 257.0 10.6% 236.4 10.8%
Provision for income taxes   (96.4 ) (4.0%)   (94.1 ) (4.3%)
Net income $ 160.6   6.7% $ 142.3   6.5%
 
Net income per common share:
Basic $ 1.05   $ 0.91  
Diluted $ 1.01   $ 0.88  
Weighted average common shares outstanding:
Basic   153.3     156.5  
Diluted   159.1     162.3  
 

See accompanying notes.

         

Ascena Retail Group, Inc.

Consolidated Balance Sheets (Unaudited)

(millions)

 

April 28, 2012

July 30, 2011

April 30, 2011

ASSETS
Current assets:
Cash and cash equivalents $ 363.2 $ 243.5 $ 314.2
Short-term investments 246.6 54.1 53.0
Inventories 348.9 365.3 300.9
Assets held for sale 29.9 -- --
Deferred tax assets 29.6 25.3 23.6
Prepaid expenses and other current assets   76.2   72.3   67.3
Total current assets   1,094.4   760.5   759.0
Non-current investments 6.7 138.5 120.6
Property and equipment, net 485.6 489.0 483.6
Goodwill 234.3 234.3 229.7
Other intangible assets, net 183.3 184.2 184.6
Other assets   34.1   33.1   34.9
TOTAL ASSETS $ 2,038.4 $ 1,839.6 $ 1,812.4
 
 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 184.8 $ 181.9 $ 169.7
Accrued expenses and other current liabilities 167.1 162.4 148.8
Deferred income 35.8 32.3 35.8
Income taxes payable 4.0 5.6 3.7
Current portion of long-term debt   --   --   1.5
Total current liabilities   391.7   382.2   359.5
Long-term debt -- -- 23.5
Lease-related liabilities 169.3 169.2 169.4
Deferred income taxes 62.2 45.7 45.2
Other non-current liabilities   89.9   84.5   72.7
Total liabilities   713.1   681.6   670.3
Equity   1,325.3   1,158.0   1,142.1
TOTAL LIABILITIES AND EQUITY $ 2,038.4 $ 1,839.6 $ 1,812.4
 

See accompanying notes.

       

Ascena Retail Group, Inc.

Segment Information (Unaudited)

(millions)

 
Third Quarter Ended Nine Months Ended

April 28, 2012

 

April 30, 2011

April 28, 2012

 

April 30, 2011

Net sales:
dressbarn $ 271.6 $ 255.4 $ 747.2 $707.2
maurices 223.9 208.2 651.4 593.5
Justice   287.8   259.2   1,015.0 887.5
Total net sales $ 783.3 $ 722.8 $ 2,413.6 $2,188.2
 
 
Third Quarter Ended Nine Months Ended

April 28, 2012

April 30, 2011

April 28, 2012

 

April 30, 2011

Operating income:
dressbarn $ 24.0 $ 22.4 $ 25.6 $ 24.4
maurices 37.9 40.3 88.0 90.1
Justice   23.4   23.7   148.2   121.2
Total operating income $ 85.3 $ 86.4 $ 261.8 $ 235.7
 

See accompanying notes.

Ascena Retail Group, Inc.

Notes to Consolidated Financial Statements

 

Note 1. Basis of Presentation

Segment Information

In January 2011, the Company completed an internal corporate reorganization and established a new holding company named Ascena Retail Group, Inc., to own the interests of each of the dressbarn, maurices and Justice brands through wholly owned subsidiaries. In connection therewith, beginning in Fiscal 2012, the Company implemented a new methodology to allocate corporate overhead costs to each of its operating segments on a reasonable basis.

As previously disclosed in the Company’s Current Report on Form 8-K filed on December 16, 2011, in order to conform to this new cost allocation methodology, the Company has recasted historically reported segment operating results in order to enhance the comparability of its segmental operating performance. There have been no changes in total net sales or total operating income as a result of this change.

3 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs