Apparel marketer Ascena reports Q1FY15 flat sales growth
For the first fiscal quarter ended October 25, 2014, NASDAQ listed and marketer of apparels, Ascena Retail Group, delivered flat sales growth from the comparable quarter of previous fiscal year.
Net sales of $1.2 billion for the first quarter of fiscal 2015 were flat compared to the first quarter of fiscal 2014.
According to Ascena, new store growth at Justice and Maurices was offset by negative total combined comparable sales at Justice.
Gross profit for the reporting quarter rose marginally to $694.5 million, or 58.2 per cent of sales, compared to $693.2 million, or 57.9 per cent of first quarter sales last year.
“The 30 basis points gross margin rate improvement was driven by performance at Maurices, Dressbarn and Catherines, offset in part by lower gross margins at Lane Bryant and Justice,” the retailer explained.
Buying, distribution and occupancy costs for the first quarter of fiscal 2015 were $214.4 million, or 18.0 per cent of sales as against $207.6 million or 17.3 per cent in the prior year quarter.
In the quarter under review, operating income fell steeply to $66.1 million or 5.5 per cent of sales, from $85.6 million, or 7.2 per cent of sales last year.
On an adjusted basis, operating income for the first quarter of fiscal 2015 was $75.6 million, or 6.3 per cent of sales compared to $93.8 million, or 7.8 per cent of first quarter sales last year.
The effective tax rate in the reporting quarter stood at 17.1 per cent, which includes a one-time, discrete tax benefit related to Mike Rayden’s announced retirement.
Excluding this one-time benefit, the effective tax rate for the first quarter of fiscal 2015 would have been 37.8 per cent, Ascena said.
Income from continuing operations totalled $53.5 million as compared to $54.3 million in the prior year’s first quarter.
Ascena reported earnings from continuing operations of $0.32 per diluted share as against earnings from continuing operations of $0.33 per diluted share in the first quarter of previous fiscal year.
The retailer ended the first quarter of fiscal 2015 with cash and investments of $169.1 million and total debt of $236.0 million, down from $187.3 million of cash and investments and $172.0 million of debt.
Ascena Group reaffirmed guidance for adjusted earnings per diluted share from continuing operations in the range of $0.90 to $1.00 for the fiscal year ending July 2015.
The Company continues to assume flat to modest positive total comp growth for the year, and it now sees total capex at the lower end of the $350-375 million range, provided with its full year guidance.
CEO David Jaffe said, “We continue to make progress on the key strategic projects that are forming our new operating platform.”
“We remain excited about the power of this model, and we are now on the back side of the capital investment cycle that was required to achieve our vision for a centralized and efficient infrastructure base," he added.
Ascena Retail Group through its subsidiaries operates approximately 3,900 stores throughout the US and Canada. (AR)
Fibre2fashion News Desk - India