For the third quarter of Fiscal 2013, earnings from continuing operations were $0.20 per diluted share, while losses from discontinued operations were $0.01 per diluted share.
This compares to earnings from continuing operations of $0.31 per diluted share in the same period of Fiscal 2012. Adjusted earnings from continuing operations in the third quarter of Fiscal 2013 were $0.26 per diluted share, compared to $0.34 per diluted share in the prior year’s third quarter.
In both periods, the Company incurred certain acquisition-related integration, restructuring and transaction costs in connection with its acquisition of Charming Shoppes, Inc. (“Charming” and the “Charming Acquisition”). Additionally, in the third quarter of 2013, the Company also incurred a charge on the extinguishment of debt. Management believes that such costs are not indicative of the Company’s underlying operating performance and has, therefore, reported adjusted results to exclude their effect.
Net sales for the third quarter of Fiscal 2013 increased 46% to $1.142 billion, compared to $783 million in the prior year’s third quarter. This growth was driven by the inclusion of the recently acquired Lane Bryant and Catherines businesses, slightly offset by a total comparable sales decrease of 1% for the quarter versus the prior year. Store comp sales for the quarter declined 4% and e-commerce comp sales increased 37%.
David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., commented, “Our soft third quarter top line performance reflects lower than expected traffic driven by continued economic challenges for our customers and unseasonably cold weather as well as merchandising misses at Lane Bryant and dressbarn. Sales trends improved somewhat across all brands in Q4 to date compared to Q3, and we are adjusting our promotional plans to ensure that spring inventory balances are at appropriate levels by the end of our Fiscal 2013 fourth quarter.”
Mr. Jaffe concluded: “As we look toward 2014, we continue to make solid progress positioning the business for long term growth by building talent and infrastructure, implementing long range synergy initiatives and improving our merchandising strategies to better match our customer’s needs.”
Fiscal Third Quarter Results
Consolidated comparable store sales (excluding e-commerce) decreased by 4% for the period. Ecommerce sales increased by 171% to $98 million on a consolidated basis, and 37% on a comparable basis. Combined, comparable store and e-commerce sales decreased by 1%.
Unseasonably cold weather and economic pressure on middle-income consumers drove decreased traffic and spending, which contributed to negative comparable store sales at Justice, Lane Bryant, maurices and dressbarn, whereas Catherines realized an 8% increase in comparable store sales.
Net sales for the third quarter of Fiscal 2013 increased 46% to $1.142 billion, compared to $783 million for last year’s third quarter, largely driven by the inclusion of sales from the newly acquired Lane Bryant and Catherines businesses, along with a 1% increase in sales from the Company’s legacy family of brands.
Ascena Retail Group
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