Ascena Retail Group Inc., impacted by costs associated with purchasing Ann Inc. last year and a soft performance at its Dressbarn division, reported a net loss of $22.6 million for the quarter ended Jan. 23, versus a profit of $8.7 million in the year-ago period.
Sales for the quarter rose to $1.84 billion from $1.29 billion a year ago. Comparable sales were down 6 percent.
The company lost $0.12 a diluted share, versus a gain of $0.05 a year ago. Adjusted earnings for the second quarter of fiscal 2016 were $0.01 per diluted share compared to a loss of $0.02 in the same period of fiscal 2015.
David Jaffe, president and chief executive officer, commented, “Our second-quarter earnings performance came in just above the pre-announced range we shared in mid-January, due mainly to strengthening performance at Loft and margin rate favorability at Justice. Adjusted operating income growth for the quarter was driven primarily by Ann Inc., and integration activity continues to progress well. We are pleased with the progression of the Justice turnaround, and remain confident in our full-year plan. Maurices delivered another solid quarter, and we continue to see improvement at Lane Bryant.”
Jaffe concluded, “Our focus on tight inventory management allowed us to deliver strong gross margin rate improvement for the quarter despite changing customer behavior around Black Friday, and continued traffic headwinds that weighed on sales performance. We exited the second quarter with inventory well-managed and will remain disciplined in this area as we continue to navigate the dynamic consumer landscape.”
Ascena, under the stewardship of Jaffe, has become aggressively acquisition-prone, having made four major deals over the last decade — Maurices in January 2005; Tween Brands in November 2009; Charming Shoppes in June 2012, and Ann Inc. last August.
The company, at about $7.4 billion in annual revenues, is the largest U.S. specialty apparel retailer focused exclusively on females through its eight retail brands — Ann Taylor, Loft, Catherines, Dressbarn, Justice, Lane Bryant, Maurices and Lou & Grey.
Through the Ann Inc. acquisition, Ascena expects to realize $150 million in savings in three years.