NEW YORK (TheStreet) -- Ascena Retail Group (ASNA) was falling 7.25% to $20.35 on Monday morning after the company announced that it lowered its earnings per share guidance for the fiscal year 2014 after lower-than-expected holiday sales.
The Suffern, N.Y.-based owner of Lane Bryant and Dress Barn announced just a 1% increase in consolidated combined comparable store and e-commerce sales for the holiday period in November and December that ended on Dec. 28, 2013. Due to this, Ascena lowered its EPS guidance for its current fiscal year that ends on July 26, 2014 to a range of $1.10 to $1.15 from a range of $1.25 to $1.30.
"A challenging Holiday selling season resulted in increased promotional activity. We successfully cleared excess inventory and have taken the necessary markdowns in the second quarter to transition cleanly into the spring season," said Ascena president and CEO David Jaffe in the company's report.
TheStreet Ratings team rates ASCENA RETAIL GROUP INC as a Buy with a ratings score of B+. The team has this to say about its recommendation:
"This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."