Dress Barn Inc. missed Wall Street’s second-quarter earnings projections and fell to a loss as the women’s apparel retailer said heavily marked-down merchandise during the holiday season weakened its margins.
This story first appeared in the February 19, 2009 issue of WWD. Subscribe Today.
For the three months ended Jan. 24, the Suffern, N.Y.-based company on Wednesday reported a net loss of $1.1 million, or 2 cents a diluted share, compared with net income of $7.4 million, or 12 cents a share, for the period a year earlier. Net sales shrank 0.7 percent to $343.2 million from $345.6 million. Analysts surveyed by Yahoo Finance were looking for earnings per share of 1 cent on sales of $341.5 million.
Quarterly comparable-store sales fell 4 percent, with comps at Dress Barn and Maurices, dipping 6 and 4 percent, respectively.
Nonetheless, the retailer said comps for February and January were up in the low-single digits.
Dress Barn president and chief executive officer David Jaffe said during the company earnings call that “business seems to show signs of stabilizing.” He also noted the retailer is “very well positioned for this recession.
“We believe we are attracting new customers who are searching for better value as well as current fashion,” he said.
Jaffe added that Dress Barn, which has more than $300 million in cash and marketable securities, will continue to “aggressively manage” its inventories in light of the economic environment.
Net earnings for the first half decreased 28.2 percent to $19.4 million, or 31 cents a share, versus profit of more than $27 million, or 42 cents, a year ago. Revenue rose 1.5 percent to $719.6 million from $709.3 million.