Boosted by its acquisition of the Justice tween operation, Dress Barn Inc. Wednesday reported substantial gains in sales and profits for the fourth quarter and full year.
For the three months ended July 31, net income rose 64 percent to $42 million, or 52 cents a diluted share, from $25.6 million, or 40 cents, a year ago. Sales jumped 78.2 percent to $710.9 million from $398.9 million. Justice contributed $245.7 million in sales in the quarter. Dress Barn completed its merger with Tween Brands, which operated the Justice nameplate, in November.
Comparable-store sales in the quarter rose 7 percent. By division, sales at the Dress Barn nameplate rose 11 percent to $282.3 million as comps gained 5 percent. Maurices saw sales rise 26 percent to $183 million as comps increased 8 percent. Comps at Justice rose 10 percent. Separately on Wednesday, the company launched dressbarn.com as an e-commerce site, offering petite, misses’ and women’s collections as well as shoes and accessories. The company is offering free shipping for all purchases made on the site over $50 until Oct. 31.
David Jaffe, president and chief executive officer, said, “Our financial results demonstrate that we have built a powerful platform of diversified retail concepts whose value-oriented merchandise assortments are resonating with today’s demanding consumers.”
Jaffe emphasized that the company’s balance sheet remains strong, as is its ability to generate cash flow. “We are confident that we can pursue a wide range of strategies to reinforce our growth and leadership position in the retail industry,” he noted.
In a recent research note, Mark Montagna, senior analyst at Avondale Partners LLC, which just initiated coverage of DBI, said the company plans to consolidate its data centers to two from their current five, and that certain payroll and human resource functions will be outsourced. The distribution center used for Dress Barn in its headquarter city of Suffern, N.Y., will be closed and its operations moved to the more modern Justice facility in Columbus, Ohio.Montagna in a research report rated the retailer’s stock as “market outperform” with a $29 price target, as compared with Wednesday’s closing price of $24.44.
“Dress Barn deserves to trade at a valuation in line with best-in-class retailers rather than the 20 percent discount it trades currently,” Montagna wrote. He said he expects 15 percent growth in earnings per share in the current fiscal year, 2011, and in 2012. The consolidations are expected to lead to margin growth mostly in 2012, he wrote.
Dress Barn, which is scheduled to hold its annual meeting Dec. 8, is seeking shareholder approval to become a holding company based in Delaware and change the firm’s name to Ascena Retail Group.
For the year, income more than doubled to $133.4 million, or $1.73 a diluted share, from $66.6 million, or $1.06, a year ago. Sales climbed 58.9 percent to $2.37 billion from $1.49 billion.
"'Dynasty' is all about gowns, the diamonds and the scandal, so it's a bit like the fashion industry. When we come to Cannes it's all about the red carpet dresses too, so it all fit really well," said designer @philippplein78 on the theme of his high-glamour resort 2019 show at his mansion in Cannes. #wwdfashion #cannes (📷: @zefashioninsider)
"I think Spike is such a brilliant director because he holds up a mirror to society and reflects these issues, yet he doesn't shove it down your throat, he doesn't tell you what to think," says @lauraharrier on her latest film @Blackkklansman. Harrier was at the Cannes Film Festival – for the very first time – with @officialspikelee. #wwdeye #cannes (📷: @zefashioninsider)
“I would think to myself, Are you happy? Yes, I’m wildly happy. I go to this studio every day and, in my inside voices, I’m giggling; I’m singing. Yes, it’s a lot of work, it’s a [huge] volume of material. It wouldn’t be for everybody. But I was very happy,” said soap opera star @therealsusanlucci of checking in throughout the years with her career trajectory. Lucci spoke to WWD about her decades-long career, love for pilates, motherhood and her QVC activewear line. Read Bridget Foley’s full piece on Lucci on WWD.com #wwdfashion (📷: @celestesloman)
@balmain has taken a stand at the #cannes Film Festival, dressing 16 actresses at a press call for the project “Noire N’est Pas Mon Metier,” or “Black Is Not My Profession.” The multimedia project includes a book, photo exhibit and documentary, which aims to expose discrimination in the French and American entertainment industries. “The moment I was asked to participate, I knew it was right for me, and for this brand, to form a part of this moment,” Balmain creative director @olivier_rousteing told WWD. #wwdnews #wwdfashion
"I always feel curious and I feel like there's more to learn. But I think being relevant, feeling relevant, I personally always feel that there's just so much more to know. And maybe that's the key.” — @themarcjacobs #wwdsummits #wwdbeauty (📷: @patrickmacleodphoto )
“The most amazing thing about her is that, regardless of all the things that have happened to her, her spirit is so undaunted by all of it. She is the most cheerful person you will ever meet. She doesn’t see problems, she only sees solutions,” said @ajanaomi_king of activist Ifrah Ahmed, who she plays in a new film “A Girl from Mogadishu.” WWD caught up with King at Cannes — Head to WWD.com to read more about her new role, personal style and how she uses social media for causes like Time’s Up and Black Lives Matter #wwdeye
WWD asked a number designers to share their thoughts on what Meghan Markle’s wedding gown will look like this Saturday. Here, Valentino’s Pierpaolo Piccioli sketches his look. #wwdfashion #royalwedding #meghanmarkle