Ascena Retail Group (ASNA), a specialty retailer offering clothing, shoes, and accessories, has reported a 47.32 percent plunge in profit for the financial year ended Jul. 26, 2014. A steep fall in margin on increased operating expenses coupled with sluggish sales pulled down earnings sharply during the quarter.
The company earned $15.70 million or $0.10 a share in the quarter compared with $29.80 million or $0.18 a share a year ago. Adjusted earnings per share came in at $0.13, when analysts expected $0.18. Revenue during the quarter went down marginally 1.28 percent to $1182.40 million from $1197.70 million in the last year period.
Gross margin expanded by 11 basis points over the last year period to 54.74 percent. However, operating margin has contracted 296 basis points to 1.90 percent as operating income dropped to $22.50 million from $58.30 million in the previous year period.
As on Jul. 26, 2014, the company's cash balance stood at $156.90 million, down 15.83 percent or $29.50 million from Jul. 27, 2013.
David Jaffe, president and chief executive officer of Ascena Retail Group, commented, ''Despite mixed results across our portfolio and continuing soft traffic patterns, fourth quarter EPS was in line with our expectations. We have yet to see sustained evidence of market improvement, and as a result, are maintaining a conservative outlook as we enter the Fall season.''
Jaffe further commented, ''We continue to focus on controlling what we can control - refining our merchandising execution, maintaining focus on inventory levels and expense management, developing an integrated ecommerce platform for our customers, and driving efficiency improvements through our strategic investments. Our final brand is in the process of moving into our retail distribution center in Ohio, and we remain on track to have all our brands operating out of our new ecommerce fulfillment center by Spring of calendar 2015. Fiscal 2015 will see the continuation of a critical, multi-year investment to build out our omnichannel platform. We continue to create a business model that will drive sustainable long term value for our shareholders.''
The company expects adjusted earnings per diluted share for the fiscal year ending July 2015 to be in the range of $0.90 to $1.00.
