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Q4FY14 earnings from continuing operation plunge at Ascena
26
Sep '14
Earnings from continuing operations nosedived at NASDAQ-listed and apparel retailer and marketer - Ascena Retail Group, Inc. in the fourth fiscal quarter ended July 26, 2014.

In the fourth fiscal quarter of 2014, earnings from continuing operations plunged to $0.10 per diluted share from $0.23 per diluted share in the fourth fiscal quarter of 2013.

Commenting on its earnings, Ascena said, “Despite mixed results across our portfolio and continuing soft traffic patterns, fourth quarter EPS was in line with our expectations.”

Net sales for the fourth fiscal quarter of 2014 fell 1.3% to $1.182 billion, compared to $1.198 billion from the comparable period of previous fiscal year.

“This decrease was caused by challenging tween market conditions at Justice and inventory-related issues at Lane Bryant”, Ascena explained.

Gross profit for the fourth fiscal quarter of 2014 declined to $647.2 million, or 54.7% of sales against $654.2 million, or 54.6% of fourth quarter sales last fiscal year.

Buying, distribution and occupancy (BD&O) costs for the quarter under review rose to $206.5 million, or 17.5% of sales, compared to $197.1 million, or 16.5% of fourth quarter sales last year.

Ascena attributed the increase to investments in merchandising and design functions, as well as the impact of new store growth at Justice and maurices.

Selling, general and administrative (SG&A) expenses for the fourth fiscal quarter of 2014 amounted to $343.5 million, or 29.1% of sales versus $330.8 million, or 27.6% of fourth quarter sales last year.

“The increase in total expense was primarily related to store payroll growth on a higher unit base, headcount growth at the brands to support our direct channel”, the apparel retailer informed.

Fourth fiscal quarter of 2014 operating income reached $22.5 million, or 1.9% of sales, compared to $58.3 million, or 4.9% of sales in the prior year same quarter.

“We have yet to see sustained evidence of market improvement, and as a result, are maintaining a conservative outlook as we enter the Fall season,”, Ascena said.

CEO David Jaffe said, “We continue to focus on controlling what we can control - refining our merchandising execution, maintaining focus on inventory levels and expense management”.

“Fiscal 2015 will see the continuation of a critical, multi-year investment to build out our omnichannel platform. We continue to create a business model that will drive sustainable long term value for our shareholders.”

Ascena Retail Group, Inc. operates through its subsidiaries approximately 3,900 stores throughout the United States and Canada. (AR)

Fibre2fashion News Desk - India

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