Shares of Ascena Group (ASNA) - Get Report plunged on Friday after the owner of Ann Taylor, Justice and Dressbarn said fiscal third-quarter results will miss analysts' estimates and said it was less confident of future sales.
Ascena reported a fiscal second-quarter net loss of $65.6 million, or 33 cents a share, vs. a loss of $32.7 million, or 17 cents a share, in the comparable year-earlier quarter.
Of concern for investors, however, was Ascena's revised fiscal third-quarter guidance, which the company said will now be a loss of between 35 cents and 45 cents - significantly steeper than the break-even figure analysts surveyed by FactSet had been expecting.
"While we believe the challenging selling environment is the result of macro headwinds impacting our sector, our third-quarter outlook represents an unacceptable profit shortfall to the expectations we shared at the beginning of our fiscal year," CEO David Jaffe said in a statement.
Shares of Ascena plunged more than 25% on Friday to $1.41.
Like many retailers, Ascena has been in retrenchment mode amid a crowded retail marketplace and shifting consumer shopping habits. The company said it expects to see $300 million in savings by July as it improves marketing and merchandise planning, and reduces costs. Ascena said it closed 110 locations in the quarter.
"We are committed to addressing performance at our under-performing brands, and continue to explore opportunities within our portfolio that can allow us to focus capital and management attention on those brands that we believe can deliver sustained growth and profitability by maintaining a differentiated position in the marketplace."
Ascena operates through four segments: Premium Fashion, Value Fashion, Plus Fashion and Kids Fashion. Its principal brands comprise Ann Taylor, LOFT, maurices, dressbarn, Lane Bryant, Catherines and Justice brands.