Ascena Retail Group, Inc. (ASNA) swung to a net loss for the quarter ended Apr. 29, 2017. The company has made a net loss of $1,030.70 million, or $ 5.29 a share in the quarter, against a net profit of $15 million, or $0.08 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $9.60 million, or $0.05 a share compared with $30 million or $0.15 a share, a year ago. Revenue during the quarter dropped 6.24 percent to $1,565.10 million from $1,669.30 million in the previous year period. Gross margin for the quarter contracted 31 basis points over the previous year period to 60.60 percent. Operating margin for the quarter stood at negative 83.82 percent as compared to a positive 3.44 percent for the previous year period.
Operating loss for the quarter was $1,311.80 million, compared with an operating income of $57.40 million in the previous year period.
However, the adjusted operating income for the quarter stood at $43.10 million compared to $78 million in the prior year period. At the same time, adjusted operating margin contracted 192 basis points in the quarter to 2.75 percent from 4.67 percent in the last year period.
David Jaffe, president and chief executive officer of ascena retail group, inc., commented, "We continue to move aggressively to navigate our current environment. As a result of a $300 million, multi-year technology and infrastructure investment cycle, we have developed a highly efficient supply chain and foundational omni-channel platform that will enable us to respond to the fundamental changes in consumer behavior that are disrupting our industry. We have amplified our development of cost efficiencies, and recently increased the cost takeout target of our Change for Growth transformation program to a range of $250 to $300 million by Fiscal 2019. This new target is as much as double our previously announced $150 million target, and we remain determined to further increase the intensity and the scope of our program activity."
For financial year 2017, Ascena Retail Group, Inc. forecasts diluted earnings per share to be in the range of $0.10 to $0.15 on adjusted basis.
For the fourth-quarter, Ascena Retail Group, Inc. forecasts diluted loss per share to be in the range of $0.06 to $0.01 on an adjusted basis.
Working capital declines
Ascena Retail Group, Inc. has witnessed a decline in the working capital over the last year. It stood at $283.40 million as at Apr. 29, 2017, down 8.52 percent or $26.40 million from $309.80 million on Apr. 23, 2016. Current ratio was at 1.32 as on Apr. 29, 2017, down from 1.33 on Apr. 23, 2016. Cash conversion cycle (CCC) has decreased to 26 days for the quarter from 30 days for the last year period. Days sales outstanding were almost stable at 5 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 53 days for the quarter compared with 52 days for the previous year period. At the same time, days payable outstanding went up to 32 days for the quarter from 26 for the same period last year.
Debt comes down
Ascena Retail Group, Inc. has recorded a decline in total debt over the last one year. It stood at $1,607.60 million as on Apr. 29, 2017, down 5.81 percent or $99.20 million from $1,706.80 million on Apr. 23, 2016. Total debt was 40.25 percent of total assets as on Apr. 29, 2017, compared with 31.12 percent on Apr. 23, 2016. Debt to equity ratio was at 1.93 as on Apr. 29, 2017, up from 0.92 as on Apr. 23, 2016.
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