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Ascena Retail Group, Inc. Reports Fourth Quarter And Fiscal Year 2013 Results

Operating income for the fourth quarter of Fiscal 2013 was $58.3 million, or 4.9% of sales, compared to $30.8 million, or 3.3% of sales last year. On an adjusted basis, operating income for the fourth quarter of Fiscal 2013 was $87.0 million, or 7.3% of sales compared to $69.7 million, or 7.4% of sales last year. An improvement in gross margin rate was offset by deleveraging of expenses.

The effective tax rate for the fourth quarter of Fiscal 2013 was 32.6%, compared to 49.1% in the fourth quarter of Fiscal 2012. This decrease resulted from favorable discrete items, largely related to tax settlements, and lower non-deductible items related to the Charming Acquisition.

Income from continuing operations for the fourth quarter of Fiscal 2013 was $38.3 million as compared to $11.2 million in the prior year’s fourth quarter. Adjusted income from continuing operations for the fourth quarter of Fiscal 2013 was $56.3 million, as compared to $47.1 million in the prior year’s fourth quarter.

Earnings from continuing operations for the fourth quarter of Fiscal 2013 were $0.23 per diluted share, compared to $0.07 in the fourth quarter of Fiscal 2012. Adjusted earnings per share from continuing operations for the fourth quarter of Fiscal 2013 was $0.34 per diluted share, compared to $0.29 in the fourth quarter of Fiscal 2012.

Fiscal Fourth Quarter Balance Sheet Highlights

The Company ended the fourth quarter of Fiscal 2013 with cash and investments of $189.4 million and total debt of $135.6 million, compared to $168.9 million of cash and investments and $326.6 million of debt at the end of Fiscal 2012.

Fiscal Year 2014 Earnings Guidance

The Company’s guidance for adjusted earnings per diluted share from continuing operations for the fiscal year ending July 2014 is in the range of $1.25 to $1.30. This guidance excludes any one-time, acquisition-related integration and restructuring costs that may be incurred during the fiscal year. The Company noted that its guidance is based upon an ongoing challenging retail environment and is based on the following key assumptions. Total comparable sales are expected to increase low single digits. The Company’s effective tax rate is expected to increase approximately 300 basis points to an estimated 39%. Investment in capital expenditures is assumed to be in the range of $425 to $450 million in Fiscal 2014. The Company plans to open approximately 180 to 190 stores and close 115 to 125 stores, ending the fiscal year with approximately 3,925 Justice, Lane Bryant, maurices, dressbarn and Catherines stores in operation.

Conference Call Information

The Company will conduct a conference call today, September 24, 2013, at 4:30 PM Eastern Time to review its fourth quarter of Fiscal 2013 results, followed by a question and answer session. Parties interested in participating in this call should dial in at (857) 244-7321 prior to the start time, the passcode is 41323525. 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 October 24, 2013 by dialing (617) 801-6888, the passcode is 26455032.

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, under the Lane Bryant, Cacique, maurices, dressbarn and Catherines brands; and for tween girls and boys, under the Justice and Brothers brands. Ascena Retail Group, Inc. operates through its subsidiaries approximately 3,900 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.shopjustice.com, www.lanebryant.com, www.maurices.com, www.dressbarn.com, www.catherines.com, www.cacique.com and www.shopbrothers.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 and in its last filed Quarterly Report on Form 10-Q.

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