By  on September 17, 2009

Higher sales and a leaner cost structure helped Dress Barn Inc. lift its fourth-quarter profits 19.5 percent.

For the three months ended July 25, net income was $26.4 million, or 41 cents a diluted share, compared with $22.1 million, or 34 cents, in the year-ago quarter. Adjusted earnings per share was 39 cents, versus Wall Street estimates of 37 cents.

Sales rose 4.3 percent to $398.9 million from $382.3 million. By division, sales at the Dress Barn nameplate increased 6 percent, to $253.7 million, with comparable-store sales up 4 percent. Sales at the Maurices division inched up 1 percent, to $145.2 million, as comps declined 5 percent.

David R. Jaffe, president and chief executive officer, said results were because of effective merchandising and careful control of costs and inventory levels. “This year, we generated $115 million of free cash flow,” he said. “Our long-held belief continues to be that a highly liquid balance sheet positions us well to continue to grow our business.”

Completion of Dress Barn’s merger with Tween Brands Inc., agreed upon in June, is expected during the final three months of the calendar year. Jaffe said the waiting period under the federal antitrust requirements has passed without comment. The company plans to issue 11.8 million shares and after the transaction expects to have “well over $200 million remaining in cash and investments,” he said.

Dress Barn also has a $150 million in convertible debt due in December 2011.

For the 2010 fiscal year ending next July, the company’s guidance for diluted EPS is in the range of $1.10 and $1.20, compared with analysts’ average expectations of $1.23. The company said it anticipates updating guidance once the Tween Brands merger is completed.

Results were announced after the markets closed, but shares gained 43 cents, or 2.4 percent, to close at $18.19. They fell 3.4 percent in the first hours of after-hours trading.

For the year, income fell 5.9 percent to $69.7 million, or $1.11 a diluted share, from $74.1 million, or $1.15, a year ago. Sales gained 3.5 percent to $1.49 billion from $1.44 billion.

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