Ascena performs well in very tough environment
Ascena Retail Group Inc. reported financial results for its fiscal fourth quarter and full year ended July 30, 2011. The Company noted that, on a reported basis, comparisons between the current and prior periods were affected by the number of weeks in its fiscal year reporting calendar, whereby the fourth quarter and full year period of the prior year included an extra week due to Fiscal 2010 being a fifty-three week year. In addition, the Company noted that Fiscal 2011 benefited from a full year of Justice's operating results, compared to a partial period in the prior year as a result of the merger closing on November 25, 2009.
Fiscal Fourth Quarter Results
On a reported basis, net income for the fiscal fourth quarter was $28.2 million, or $0.35 per diluted share, compared to net income of $42.0 million, or $0.52 per diluted share, for the fourth quarter of Fiscal 2010.
On an adjusted basis, net income increased to $38.5 million, or $0.48 per diluted share, compared to net income for last year's fourth quarter of $34.0 million, or $0.42 per diluted share. Adjusted results exclude the effect of the extra week in Fiscal 2010 and other items that management believes are not indicative of the Company's underlying operating performance. Reference should be made to the section "Use of Non-GAAP Financial Measures" elsewhere in this release for a discussion of the non-GAAP financial measures used in this release and for the reconciliations of such non-GAAP financial measures to the most directly comparable GAAP financial measures.
Net sales for the thirteen-week fiscal fourth quarter increased 2% to $725.8 million, compared to $710.9 million for last year's fourteen-week fiscal fourth quarter. On an adjusted basis, excluding the effect of the extra week in the prior year's quarter, sales increased 11%. This overall increase was largely due to across-the-board increases in comparable store sales, as well as strong growth in e-commerce sales. Consolidated comparable store sales, which include stores open for at least one year, increased 7% on a thirteen-week comparable basis for the fiscal fourth quarter. By brand, comparable store sales increased 4% at dressbarn, 3% at maurices and 14% at Justice.
On a reported basis, selling, general and administrative ("SG&A") expenses for the fourth quarter were $216.5 million, or 29.8% of sales, compared to $209.9 million, or 29.5% of sales last year. On an adjusted basis, SG&A expenses were $209.4 million, or 28.9% of sales, compared to $192.5 million, or 29.4% of sales last year. This decrease in SG&A as a percentage of sales was primarily due to better leveraging of fixed operating expenses on the higher sales base.
On a reported basis, operating income for the fourth quarter was $54.1 million, or 7.5% of sales, compared to $59.8 million, or 8.4% of sales last year. On an adjusted basis, operating income increased 16% to $62.6 million, or 8.6% of sales, compared to $54.2 million, or 8.3% of sales last year. The increase in adjusted operating income was due to the strong performance of all three brands, most notably Justice.