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Ascena Retail Group, Inc. Reports First Quarter 2013 Results

Reaffirms Fiscal July 2013 Earnings Guidance

The Company reaffirms guidance for adjusted earnings per diluted share from continuing operations for the fiscal year ending July 2013 in the range of $1.45 to $1.55, excluding one-time, acquisition-related integration, restructuring and purchase accounting costs that may be incurred related to the Charming Acquisition. This estimate is based upon various assumptions, including a mid-single digit increase in consolidated comparable store sales. The Company plans to open approximately 180 to 200 stores and close 100 to 120 stores, ending the fiscal year with approximately 3,900 Justice, Lane Bryant, maurices, dressbarn and Catherines stores in operation and achieving approximately $5 billion in net sales.

Conference Call Information

The Company will conduct a conference call today, December 5, 2012, at 4:30 PM Eastern Time to review its first quarter Fiscal 2013 results, followed by a question and answer session. Parties interested in participating in this call should dial in at (617) 786-2960 prior to the start time, the passcode is 56524226. 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 January 5, 2013 by dialing (617) 801-6888, the passcode is 92576667.

About Ascena Retail Group, Inc.

Ascena Retail Group, Inc. (NASDAQ: ASNA) is a leading specialty retailer offering clothing, shoes, and accessories for missy and plus-size women and tween girls, under the Justice, Lane Bryant, maurices, dressbarn and Catherines brands. Ascena Retail Group, Inc. operates through its subsidiaries approximately 3,800 stores throughout the United States, Puerto Rico and Canada.

For more information about Ascena Retail Group, Inc. and its brands, visit www.ascenaretail.com, www.charmingshoppes.com, www.shopjustice.com, www.lanebryant.com, www.maurices.com, www.dressbarn.com, www.catherines.com, www.cacique.com, www.figis.com and www.figisgallery.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 28, 2012.

 
Ascena Retail Group, Inc.
Consolidated Statements of Operations (Unaudited)
(millions, except per share data)
 
First Quarter Ended
October 27,   % of Net   October 29,   % of Net
2012   Sales   2011   Sales
Net sales $1,137.5 100.0 % $768.3 100.0 %
Cost of goods sold (481.9 ) (42.4 %) (328.5 ) (42.8 %)
Gross margin 655.6 57.6 % 439.8 57.2 %
Other costs and expenses:
Buying, distribution and occupancy expenses (205.8 ) (18.1 %) (126.3 ) (16.4 %)
Selling, general and administrative expenses (339.3 ) (29.8 %) (212.9 ) (27.7 %)
Depreciation and amortization expense (37.6 ) (3.3 %) (24.1 ) (3.1 %)
Operating income 72.9   6.4 % 76.5   10.0 %
Interest expense (4.8 ) (0.4 %) (0.2 ) --
Interest and other income, net 0.3   -- 0.9   0.1 %
Income from continuing operations before income taxes 68.4 6.0 % 77.2 10.0 %
Provision for income taxes from continuing operations (22.2 ) (1.9 %) (29.7 ) (3.9 %)
Income from continuing operations 46.2 4.1 % 47.5 6.2 %
Loss from discontinued operations, net of taxes (3.1 ) (0.3 %) --   --
Net income $43.1   3.8 % $47.5   6.2 %
 
Net income (loss) per common share - basic:
Continuing operations $0.30   $0.31  
Discontinued operations ($0.02 ) --  
Total net income per basic common share $0.28   $0.31  
 
Net income (loss) per common share - diluted:
Continuing operations $0.29   $0.30  
Discontinued operations ($0.02 ) --  
Total net income per diluted common share $0.27   $0.30  
 
Weighted average common shares outstanding:
Basic 155.0   153.9  
Diluted 161.3   158.5  
 
 

See accompanying notes.

     
Ascena Retail Group, Inc.
Consolidated Balance Sheets (Unaudited)
(millions)
 
October 27, 2012 July 28, 2012
ASSETS
Current assets:
Cash and cash equivalents $132.6 $164.3
Short-term investments 0.9 1.4
Inventories 604.0 533.4
Assets related to discontinued operations 181.1 133.6
Deferred tax assets 48.9 48.7
Prepaid expenses and other current assets 187.2 158.8
Total current assets 1,154.7 1,040.2
Non-current investments 3.4 3.2
Property and equipment, net 693.8 674.2
Goodwill 597.6 593.2
Other intangible assets, net 453.0 453.7
Other assets 41.8 42.6
TOTAL ASSETS $2,944.3 $2,807.1
 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $284.6 $252.8
Accrued expenses and other current liabilities 261.5 261.2
Deferred income 41.9 42.7
Liabilities related to discontinued operations 169.3 118.6
Income taxes payable 7.4 6.1
Current portion of long-term debt 3.9 4.2
Total current liabilities 768.6 685.6
Long-term debt 300.8 322.4
Lease-related liabilities 243.4 240.5
Deferred income taxes 75.3 60.6
Other non-current liabilities 150.6 157.1
Total liabilities 1,538.7 1,466.2
Equity 1,405.6 1,340.9
TOTAL LIABILITIES AND EQUITY $2,944.3 $2,807.1
 

See accompanying notes.

 
Ascena Retail Group, Inc.
Segment Information (Unaudited)
(millions)
 
First Quarter Ended
October 27, 2012     October 29, 2011
Net sales:
Justice $358.3 $320.0
Lane Bryant 229.8 --
maurices 224.6 202.9
dressbarn 252.0 245.4
Catherines 72.8   --
Total net sales $1,137.5   $768.3
 
First Quarter Ended
October 27, 2012 October 29, 2011
Operating income (loss):
Justice $56.3 $47.8
Lane Bryant (17.0 ) --
maurices 29.6 23.7
dressbarn 9.0 5.0
Catherines 1.4   --
Subtotal 79.3 76.5
Less unallocated acquisition-related, integration and restructuring costs (6.4 ) --
Total operating income $72.9   $76.5
 

See accompanying notes.

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