Ascena Retail Group Inc. overcame continuing weakness in its Justice and Lane Bryant brands with tight inventory and expense controls and ended the first quarter with increases in profits and gross margins.

In the three months ended Oct. 25, the Mahwah, N.J.-based specialty store operator’s net income increased 1.7 percent to $53.5 million from $52.6 million. Earnings per share were 32 cents in both periods, but adjusted EPS for the most recent quarter was 28 cents, 2 cents better than the analysts’ consensus estimate.

Adjustments include an 8-cent benefit related to the retirement of Michael Rayden, who will step down as president and chief executive officer of the Justice & Brothers divisions in January. He will be entitled to $37 million in previously accured deferred compensation which became fully deductible in the just completed quarter.

Sales slipped 0.2 percent to $1.19 billion from $1.2 billion in the year-ago quarter, with comparable sales down 2 percent, including a 4 percent decline in same-store sales and a 16 percent increase in e-commerce.

By division, sales at Justice were down 4.2 percent to $357 million, and down 7 percent on a comp basis, while Lane Bryant revenues dropped 0.8 percent to $245.7 million. Maurices was up 4 percent to $251.9 million, Dress Barn up 0.9 pecent to $259.6 million and Catherines up 3.8 percent to $80 million. Comps were flat at Lane Bryant, Maurices and Dress Barn and up 4 percent at Catherines.

Gross margin advanced to 58.2 percent of sales from 57.9 percent in the year-ago quarter, as strength at Maurices, Dress Barn and Catherines offset declines at Lane Bryant and Justice.

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Inventories declined slightly more than sales, pulling back 1.2 percent to $626 million, in part because of port-related delays.

On a late afternoon conference call with analysts, David Jaffe, president and ceo of the firm, said that the flat comps at Lane Bryant, Maurices and Dress Barn came “despite negative mid-single-digit traffic trends.” He said the sales climate has “improved modestly from the prior quarter’s performance, but the first quarter remained challenging.”

Summarizing the performance of various fashion trends, Jaffe said soft pants, leggings, jeggings, skirts and dresses performed well, with size-5 offerings adding more than $6 million in new business.

“Our biggest challenge came from the casual top assortment, particularly wovens and sweaters,” he said.

Jaffe noted a move away from some previous promotions but said the company wouldn’t hesitate to prime the promotional pump if needed to achieve season-end inventory goals.

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“Depending on conditions, this may require a return to the promotional cadence from last year,” he said.

Shares fell 0.7 percent to $12.95 during Tuesday’s trading session and rose 1.2 percent to $13.10 in after-hours trading following the earnings announcement.

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