For the second quarter of 2013, earnings per diluted share from continuing operations decreased to $0.23 per share, while earnings from discontinued operations were $0.06 per share. This compares to diluted earnings per share from continuing operations of $0.40 per share in Fiscal 2012.
In connection with the acquisition of Charming Shoppes, Inc. (“Charming” and the “Charming Acquisition”), the Company incurred in Fiscal 2013 certain non-recurring purchase accounting costs, other acquisition-related integration and restructuring costs, and also incurred certain losses on the extinguishment of debt.
Management believes that such costs are not indicative of the Company’s underlying operating performance and have adjusted Fiscal 2013 results to exclude the effect of such costs. Adjusted earnings per share from continuing operations on this basis was $0.26 per diluted share for the second quarter.
The Company’s combined total comparable sales increased 2% for the quarter versus the prior year, with store comp. sales of -1% and e-commerce comp. sales of 27%. Net sales for the second quarter of Fiscal 2013 increased 44% to $1.238 billion, compared to $862 million in the prior year’s second quarter, driven by the inclusion of the recently acquired Lane Bryant and Catherines businesses.
David Jaffe, President and Chief Executive Officer of Ascena Retail Group, Inc., commented, “Our second quarter performance reflects a difficult holiday season during which we utilized promotion and markdown strategies to manage inventory for an effective transition to Spring assortments. We expect the challenging environment to continue and have adjusted our sales, promotion, and inventory plans accordingly. These actions, combined with strong expense controls and our acceleration of productivity programs, give us confidence in our ability to achieve our full-year 2013 earnings expectations despite the market condition.”
Mr. Jaffe concluded, “We made solid progress positioning the business for long term growth during the first half of the year by continuing to build our talent base and investing in infrastructure to drive ongoing margin improvement and new store growth. We continue to be excited by the growth and efficiency opportunities created by the integration of our acquisition and strategies to fully leverage our portfolio.”
Fiscal Second Quarter Results
Consolidated comparable store sales excluding e-commerce decreased by 1% for the period, with continued positive comps at Justice and Catherines, up 4% and 6%, respectively. E-commerce sales increased by 123% to $115 million on a consolidated basis, and 27% on a comparable basis. Combined, comparable store and e-commerce sales increased by 2%.
Soft holiday sales and a challenging external environment drove negative comparable store sales at Lane Bryant, maurices and dressbarn. Second quarter sales also were negatively impacted by Hurricane Sandy in the Northeast and the Company believes that middle income consumers were impacted by a weak economic outlook driven, in part, by tax increases.
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Letter to Editor
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