Post-Market Activity Shows Ascena Retail Group (ASNA) Down

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Ascena Retail Group ( ASNA) as a post-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Ascena Retail Group as such a stock due to the following factors:

  • ASNA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $83.6 million.
  • ASNA is down 4% today from today's close.

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More details on ASNA:

Ascena Retail Group, Inc., through its subsidiaries, operates as a specialty retailer of apparel for women, and tween girls and boys. It operates through five segments: Justice, Lane Bryant, maurices, dressbarn, and Catherines segments. ASNA has a PE ratio of 21. Currently there are 5 analysts that rate Ascena Retail Group a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Ascena Retail Group has been 2.1 million shares per day over the past 30 days. Ascena Retail Group has a market cap of $2.4 billion and is part of the services sector and retail industry. The stock has a beta of 1.98 and a short float of 4.3% with 1.24 days to cover. Shares are up 16.8% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Ascena Retail Group as a hold. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 1.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • ASNA's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • The gross profit margin for ASCENA RETAIL GROUP INC is rather high; currently it is at 51.37%. Regardless of ASNA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.67% trails the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 72.7% when compared to the same quarter one year ago, falling from $31.90 million to $8.70 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Specialty Retail industry and the overall market, ASCENA RETAIL GROUP INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

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