Ascena Retail Group Inc. registered a 7.9 percent increase in third-quarter profits but noted that it experienced markdown pressures and high inventories after a “tough April.”


For the three months ended April 30, the operator of Dress Barn, Maurices and Justice said net income totaled $51.8 million, or 64 cents a diluted share. This compared with income of $48 million, or 59 cents, a year earlier. Adjusted EPS came to 66 cents a share, 1 cent better than analysts, on average, had expected.


Net sales for the quarter increased 8.6 percent to $722.8 million, from $665.5 million in 2010. The consensus estimate for revenues as $709.6 million.


Quarterly comparable-store sales rose 6 percent, helped by a 4 percent increase at Dress Barn, an 11 percent gain at Maurices and a 3 percent rise at Justice.


Gross margin improved to 44.4 percent of sales versus year-ago margin of 43.8 percent, but the company said it experienced an increase in markdowns from a “slightly higher level of promotional activity during the quarter.”


“As we go forward, we are mindful that today’s consumer is under increasing pressure, and we are working hard to ensure that we retain our leadership position for both fashion and value within each of our brands,” said president and chief executive officer David Jaffe. “We are confident that we have struck the right balance of merchandise and pricing and will continue to do so.”


The Suffern, N.Y.-based company said net income for the nine months equaled $142.3 million, or $1.75 a diluted share, compared with $91.4 million, or $1.19 a share, a year earlier. Net sales jumped 31.5 percent to $2.19 billion from $1.66 billion in 2010. Dress Barn completed its acquisition of Tween Brands Inc., operates of the Justice chain, in November 2009, during the second quarter of Dress Barn’s fiscal year.


The company reaffirmed its annual EPS guidance of between $2.28 and $2.33 a share. Wall Street estimates average $2.33 a share.

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