Free Post Earnings Research Report: Ascena Reported Better Than Expected Results

LONDON, UK / ACCESSWIRE / July 5, 2018 / If you want access to our free earnings report on Ascena Retail Group, Inc. (NASDAQ: ASNA) (“Ascena”), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=ASNA. Ascena reported its third quarter fiscal 2018 operating and financial results on June 05, 2018. The parent Company of Ann Taylor and Lane Bryant provided guidance for the upcoming quarter. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Ascena Retail Group most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=ASNA

Earnings Highlights and Summary

Ascena’s net sales for the third quarter of fiscal 2018 were $1.50 billion compared to $1.57 billion in Q3 FY17, with the decline caused primarily by a 3% decline in comparable sales. The Company’s reported numbers beat analysts’ estimates of $1.47 billion

During Q3 FY18, Ascena’s gross margin declined to $883 million, or 58.7% of sales, compared to $948 million, or 60.6% of sales, in Q3 FY17. The decline in gross margin was primarily due to drop in comparable sales, while gross margin rate declined 190 basis points (bps) primarily due to performance at Ascena’s Value Fashion segment, where both maurices and dressbarn experienced significant declines.

For Q3 FY18, Ascena’ buying, distribution, and occupancy (BD&O) expenses were essentially flat at $313 million, which represented 20.8% of sales compared to 20.0% of sales in Q3 FY17. BD&O expenses as a percentage of net sales increased by 80 bps primarily due to the de-leveraging effect of lower comparable sales.

Ascena’s operating loss improved to $23 million in Q3 FY18 compared to $1.31 billion in Q3 FY17. The operating loss in the reported quarter primarily reflected the impact of the comparable sales decline, while the loss in the year ago corresponding period primarily represented non-cash impairments of goodwill and other intangible assets.

On a non-GAAP adjusted basis, Ascena reported operating income of $12 million in Q3 FY18 compared to $43 million of operating income in Q3 FY17, with the decline caused primarily by the impact of negative comparable sales, partially offset by operating expense reductions discussed above.

Ascena reported net loss of $40 million, or $0.20 per diluted share, in Q3 FY18 compared to net loss of $1.03 billion, or $5.29 per diluted share, in Q3 FY17. The Company’s non-GAAP adjusted loss came in at $0.08 per diluted share in the reported quarter compared to non-GAAP adjusted income of $0.05 per diluted share in the year ago same period. Ascena’s results came in ahead of Wall Street’s estimates for a loss of $0.09 per share.

Cash Matters

Ascena ended Q3 FY18 with cash and cash equivalents of $363 million. Of this amount, approximately $279 million was held outside of the US. Subsequent to the end of the reported quarter, the Company repatriated approximately $225 million of its foreign cash back to the US, of which $112.5 million was used to prepay required term loan payments through October of 2019.

Ascena ended Q3 FY18 with inventory of $668 million, down 6% from $714 million at the end of Q3 FY17. The Company’s reported quarter capital expenditures totaled $41 million, primarily to support new capabilities and strategic initiatives. Ascena is estimating FY18 capital expenditures in the range of $190 million to $220 million.

Ascena’ ended Q3 FY18 with total debt of $1.574 billion, which represents the balance remaining on the term loan. In addition, the Company had $471 million of borrowing availability under its revolving credit facility.

Fleet Optimization

As part of its continuing fleet optimization program, Ascena closed 261 stores from January 2017 through April 28, 2018, and realized approximately $40 million in annualized rent reductions through landlord negotiations. The Company continues to expect to end FY18 with a store count between 4,600 and 4,650 stores.

Outlook

For the fourth quarter fiscal 2018, Ascena is projecting non-GAAP earnings to be in the range of $(0.05) to $0.05 per share. The Company is expecting net sales in the range of $1.62 billion to $1.66 billion, and comparable sales in the band of flat to up 2%.

For Q4 FY18, Ascena is forecasting gross margin rate in the range of 56.5% to 57.0%, and operating income in the range of $22 to $42 million.

Stock Performance Snapshot

July 02, 2018 – At Monday’s closing bell, Ascena Retail Group’s stock fell 6.65%, ending the trading session at $3.79.

Volume traded for the day: 1.78 million shares.

Stock performance in the last month – up 3.55%; previous three-month period – up 67.70%; past twelve-month period – up 65.50%; and year-to-date – up 61.28%

After last Monday’s close, Ascena Retail Group’s market cap was at $779.98 million.

The stock is part of the Services sector, categorized under the Apparel Stores industry.

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