Ascena Retail Group Inc., despite reporting a tough Christmas quarter on Monday and expressing concerns about consumers under pressure this spring, stuck to its earnings forecast for its fiscal year ending in July, pushing the stock up 13.6 percent.
The stock rose $2.25 to $18.78 in after-hours trading after Ascena reiterated that it expects adjusted earnings per diluted share from continuing operations of $1.20 to $1.30, excluding onetime costs from the Charming Shoppes acquisition. The forecast is based on the spring season comp-store sales ranging from flat to up 3 percent and e-commerce up 25 percent.
Ascena’s second-quarter net income fell 30 percent to $47.2 million from $63.7 million. Acquisition costs, some debt extinguishment, Hurricane Sandy and a challenging holiday season pulled down the results. For the quarter ended Jan. 26, earnings per diluted share from continuing operations decreased to 23 cents a share, compared with 40 cents a share in fiscal 2012.
Total comparable-store sales increased 2 percent in the quarter versus the prior year, with store comps down 1 percent and e-commerce comps ahead 27 percent. Net sales for the quarter increased 44 percent to $1.24 billion, compared with $862 million in the prior year’s second quarter, due to the acquisition.
“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,” said David Jaffe, president and chief executive officer. “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.”
Dress Barn was the most challenged division last quarter, down 6 percent, and was heavily impacted by Hurricane Sandy due to its East Coast concentration. Jaffe expects a more normal spring for Dress Barn. “Looking at the tea leaves of early selling, I don’t see any warning signs,” he said. Easter selling is big at Dress Barn, particularly with dresses. Lane Bryant was the second-weakest division, down 5 percent.
For the quarter to date, the company overall is running slightly ahead, with January better than expected with clearances, Jaffe said. “We know we have opportunities to improve merchandising and marketing to improve the top line,” Jaffe added. “We did transition well to spring assortments.” He also cited tightened expense management, accelerating productivity programs and three “major” strategies that will get the company to eventually achieve an operating income rate of 12 percent — overhead reductions from the Charming acquisition, synergies across the brands and creation of a global sourcing operation for all brands.
Jaffe also cited a strengthened leadership team, including recently naming Linda Heasley president of Lane Bryant, Dirk Montgomery executive vice president and chief financial officer, Ronnie Robinson president of Ascena Global Sourcing and David Johns senior vice president and chief information officer, as well as a new vice president of accessories at Maurices, though Maurices has an interim chief merchandising officer and needs a permanent one.
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)