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Ascena's net income up 50%; raises 2012 earnings guidance

02
Mar '12
Ascena Retail Group Inc. reported record financial results for its fiscal second quarter and six months ended January 28, 2012.

Net income for the second quarter of Fiscal 2012 increased by 50% to $63.7 million, compared to net income of $42.5 million for the second quarter of Fiscal 2011. Earnings per share for the second quarter of Fiscal 2012 increased by 56% to $0.81 per diluted share, compared to $0.52 of earnings per diluted share for the second quarter of Fiscal 2011.

Net sales for the second quarter of Fiscal 2012 increased 15% to $862.0 million, compared to $752.1 million for last year's second quarter. This was primarily due to an 8% increase in comparable store sales, strong growth in sales from new stores and e-commerce, and a $6 million increase in revenues relating to gift card breakage. Consolidated comparable store sales include stores open for at least one year and do not include e-commerce sales results. E-commerce sales increased 61% to $52 million versus last year's comparable period.

Selling, general and administrative (“SG&A”) expenses for the second quarter of Fiscal 2012 were $232.3 million, or 26.9% of sales, compared to $211.1 million, or 28.1% of sales last year. The 120 basis point improvement in SG&A expenses as a percent of sales was primarily due to leverage on higher sales.

Operating income for the second quarter of Fiscal 2012 increased 40% to $100.0 million, or 11.6% of sales, compared to $71.5 million, or 9.5% of sales last year. The 210 basis point increase in operating income as a percent of sales was due to higher sales and the ability to leverage both buying and occupancy costs and SG&A expenses.

Net income for the first six-month period of Fiscal 2012 increased by 23% to $111.2 million, compared to net income of $90.5 million for the first six months of Fiscal 2011. Earnings per share for the first six-month period of Fiscal 2012 increased by 26% to $1.41 per diluted share, compared to $1.12 of earnings per diluted share for the first six months of Fiscal 2011.

Net sales for the first six-month period of Fiscal 2012 increased 11% to $1.630 billion, compared to $1.465 billion for last year's first six months. The overall increase was primarily due to a 6% comparable store sales increase, and strong growth in sales from new stores and e-commerce.E-commerce sales increased 56% to $84 million versus last year.

SG&A expenses for the first six-month period of Fiscal 2012 were $456.5 million, or 28.0% of sales, compared to $415.2 million, or 28.3% of sales last year. The decrease in SG&A expenses as a percent of sales was due to leverage on higher sales.

Operating income for the first six-month period of Fiscal 2012 increased 18% to $176.5 million, or 10.8% of sales, compared to $149.3 million, or 10.2% of sales last year. The 60 basis point increase in operating income as a percent of sales was largely due to higher sales and the ability to leverage both buying and occupancy costs and SG&A expenses.


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