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Net earnings increase 96% at Ascena Retail
04
Mar '11
Ascena Retail Group Inc reports record sales and earnings results for its fiscal second quarter and six months ended January 29, 2011. Net earnings for the fiscal second quarter nearly doubled to $42.5 million, or $0.52 per diluted share, compared to net earnings of $21.7 million, or $0.28 per diluted share for the second quarter of fiscal 2010.

Net earnings on a non-GAAP basis increased to $46.0 million, or $0.57 per diluted share, compared to net earnings for last year's second quarter of $28.1 million, or $0.37 per share. During the second quarter, the Company incurred a total of $5.5 million of pre-tax charges for certain items that management believes are not indicative of on-going operations compared to pre-tax charges of $10.5 million last year.

Net sales for the second quarter increased 27% to $752.2 million compared to $594.1 million last year. The overall increase was primarily due to an increase of Justice sales to $337.8 million in the thirteen week quarter this year versus $221.1 million in the nine week period last year that began with the merger date of November 25, 2009. The sales increase included a consolidated comparable store sales increase of 9% for the quarter compared to last year.

By division, net sales for dressbarn increased 1% to $211.6 million, compared to $209.3 million last year, with a comparable store sales increase of 1%. Net sales for maurices increased 24% to $202.8 million, compared to $163.7 million last year, with a comparable store sales increase of 17%. Net sales during the second quarter for Justice were $337.8 million, with a comparable store sales increase of 11%.

Operating income for the second quarter was $71.6 million, or 9.5% of sales compared to $43.1 million, or 7.3% of sales last year. On a non-GAAP basis operating income increased to $77.1 million, or 10.2% of sales compared to $47.8 million, or 8.0% of sales last year. The increase in operating income as a percent of sales was due to increases associated with the strong performance of maurices and Justice.

Net earnings for the six month period more than doubled to $90.5 million, or $1.12 per diluted share, compared to net earnings of $43.4 million, or $0.61 per diluted share for the first six months of 2010.

Net earnings on a non-GAAP basis increased to $96.5 million, or $1.19 per diluted share for the six month period of 2011, compared to net earnings for the six month period of 2010 of $53.1 million, or $0.74 per diluted share. During the first six months of fiscal 2011, the Company incurred $9.6 million of pretax charges for certain items that management believes are not indicative of ongoing operations compared to pretax charges of $15.1 million last year. A GAAP to non-GAAP reconciliation of these results is provided later in this release.

Net sales for the six month period ended January 29, 2011 increased 47% to $1.465 billion compared to $998.2 million for last year's six month period ended January 23, 2010. The increase was primarily due to the increase of Justice sales since the merger date of November 25, 2009 to January 23, 2010 last year, which accounted for $407.3 million of the total increase of $467.2 million. Comparable store sales increased 6%.

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