SG&A expenses for the first nine-month period of Fiscal 2012 were $685.5 million, or 28.4% of sales, compared to $625.7 million, or 28.6% of sales last year. The 20 basis point improvement in SG&A expenses was primarily due to leverage on higher sales.
Operating income for the first nine-month period of Fiscal 2012 increased 11.1% to $261.8 million, or 10.8% of sales, compared to $235.7 million, or 10.8% of sales last year. The $26.1 million increase is attributable to increased margin on higher sales, partially offset by an increase in SG&A expenses.
Fiscal Third Quarter Balance Sheet Highlights
The Company ended the third quarter of Fiscal 2012 with $616.5 million in cash and investments, compared to $436.1 million in cash and investments at the end of Fiscal 2011. The Company expects to use a significant portion of its cash and investments balance to partially fund the Charming Shoppes acquisition, which is expected to close in mid-June 2012.
The Company repurchased approximately 2.7 million shares at an aggregate cost of $37.2 million during the first nine months of Fiscal 2012.
Commentary
David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., commented, “Our overall financial performance in the quarter was in-line with expectations and reflects the continued challenging marketplace for retailers and consumers.
“Our ability to perform well despite these pressures validates the strength of our product, the loyalty of our customers and our strategy to build a compelling, diversified business. We are gratified and excited to powerfully move this strategy forward with the anticipated addition of Charming Shoppes to the Ascena portfolio of brands.”
Reaffirms Fiscal July 2012 Earnings Guidance
The Company today reaffirmed guidance for earnings per diluted share for the fiscal year ending July 2012 in the range of $1.37 to $1.40, excluding the impact on earnings of the pending Charming Shoppes acquisition, which is currently scheduled for a mid-June closing.
Items excluded include the impact on earnings from acquisition-related costs during the fiscal third quarter and those anticipated in the fourth quarter, as well as any impact of the acquisition on the combined operating results of the Company. This estimate is based upon various assumptions for the remainder of the year, including a mid-single digit increase in consolidated comparable store sales. The Company plans to end the fiscal year with approximately 2,600 dressbarn, maurices and Justice stores in operation.
Ascena Retail Group, Inc. is a leading national specialty retailer of apparel for women and tween girls, operating through its wholly-owned subsidiaries, the dressbarn, maurices and Justice brands. The Company operates through its subsidiaries approximately 2,600 stores throughout the United States, Puerto Rico and Canada.
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