As other chains try to stabilize amid the slowly recovering economy, Dress Barn Inc. pushes ahead.
The Suffern, N.Y.-based specialty retailer, fueled by moderate prices, selling momentum and recent acquisitions, reported net earnings of $21.1 million, or 28 cents a diluted share, for the second quarter ended Jan. 23, compared with a $1.8 million, or 3 cent loss, in the year-ago period.
Total sales increased 73 percent to $594.1 million from $343.2 million, primarily due to the acquisition of the Justice chain on Nov. 25 and comparable-store sales rising 10 percent.
“Our combination of fashion, attractive pricing and strong customer service is a winning formula that is providing great value to our customers,” said David R. Jaffe, president and chief executive officer. “We are very pleased with the performance of each of our three concepts,” Jaffe added, referring to the Dress Barn, Maurices and Justice chains. “Our sales trends are strong. Our inventory and margins are at good levels and we are seeing improving unit-level productivity.”
Dress Barn benefited from what Jaffe described as a “trade-down effect” with customers shopping cheaper places for apparel and saw a 7 percent increase in average retail price. Maurices also performed well, with a 5 percent increase in average dollar sales. And Justice, Jaffe said, had a strong rebound in comp-store sales and made market share gains.
The company also reported earnings on a non-GAAP [generally accepted accounting principles] basis increased to $28.1 million, or 37 cents a share. During the quarter, the company incurred $10.5 million in pretax charges that were unrelated to operations. Gross margins rate rose to 39.1 percent from 32.8 percent.
The company long had a sleepy reputation, but it’s profile has been rising since the acquisition of the 739-unit Maurices, which caters to twentysomethings in small-town America, and more recently the 899-unit Justice, which caters to tween girls. Dress Barn, with 837 stores, focuses on the misses and large-size markets. The company has also been working to elevate its fashion image while maintaining moderate prices and managing the mergers. Jaffe cited the company’s strong cash position and said he sees “powerful opportunities for continued growth.”
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)