Shares of Ascena Retail Group Inc. jumped in after-hours trading Monday following the company’s disclosure of increased first-quarter sales and profits that exceeded analysts’ expectations.
The Suffern, N.Y.-based specialty retailer reported that sales rose on both a net and comparable basis at all five of its nameplates, with Lane Bryant excelling with its 7 percent increase in comps and a 7.8 percent increase in net sales.
For the three months ended Oct. 26, net income grew 22 percent to $52.6 million, or 32 cents a diluted share, from $43.1 million, or 27 cents. Excluding costs associated with discontinued operations such as Fashion Bug and Figi’s, adjusted earnings per share were 33 cents, 1 cent more than the consensus estimate of analysts.
Revenues picked up 5.2 percent to $1.2 billion from $1.14 billion a year ago, versus the consensus estimate of $1.18 billion. Overall comps were up 4 percent, with a 2 percent increase in same-store sales and a 27 percent rise in e-commerce, to $106 million.
“We expect the retail environment to be challenging for the foreseeable future, with a highly promotional holiday season,” said David Jaffe, president and chief executive officer. “We have taken a conservative approach to planning inventory and have developed promotional contingencies to ensure we end the season clean.
“Regardless of the environment, our teams are focused on driving profitable growth, and we feel that our brands are well positioned for success,” he added.
At the Justice tween brand, the company’s largest division, sales were up 4 percent to $372.5 million and rose 3 percent on a comp basis. Lane Bryant’s 7.8 percent increase lifted it to $247.7 million in revenue, while Maurices was also up 7.8 percent, to $242.1 million, with a 2 percent rise in comps. Dressbarn sales added 2.1 percent, to hit $257.2 million, with a 1 percent comp gain. The greatest comp growth — 11 percent — came from Ascena’s smallest division, Catherines, where sales were up 5.9 percent to $77.1 million.
Shares fell 2 percent to $20.88 in Monday’s trading session but picked up 4.7 percent, to $21.87, in the early stages of after-hours trading.