Ascena Retail Group’s profit rose in its first quarter as the retailer said it is encouraged by “winds” in the business.
The parent company of Ann Taylor, Loft, Lane Bryant, Catherines, Cacique, Dressbarn, Justice and Lou & Grey, reported that its net income totaled $31.7 million, or $0.16 per share, in the quarter ended Nov. 2, compared to $5.9 million, or $0.03 per share, in the year-ago period.
Sales totaled $1.297 billion, down from $1.339 billion last year. Total same-store sales were flat.
By division, same-store sales fell 1% at Ann Taylor, 2% at Loft and 6% at Justice. Same-store sales rose 2% at Lane Bryant. Dressbarn, whose liquidation is expected to be completed by year end, had 10% same-store sales growth. (At the end of the quarter, there were still 544 Dressbarn stores open.)
Inventory levels were down 5% from a year ago.
“We were pleased to have exceeded our adjusted operating income expectations for the first quarter through better than expected improvement in operating expenses,” said CEO Gary Muto. “We continue to make advances on right-sizing our cost structure, while focusing on driving sustainable growth and improved operating margin for each of our segments.”
“While we are encouraged by the progress we are making, we know there is more work to be done,” Muto added. “We are moving our brands in the right direction by capitalizing on their distinct market leadership positions while maintaining our focus on optimizing our capital structure.”
Ascena has been working to turnaround its business amid uneven performance across its different divisions and a challenging environment for mall-based apparel retailers.
On the company’s quarterly call with analysts, Muto said the company is “seeing winds in the business.” He cited three key objectives: sustainable growth, improved operating margins and optimizing capital structure.
Ascena operates ecommerce websites and approximately 3,400 stores throughout the United States, Canada and Puerto Rico offering apparel, shoes, and accessories for women under the premium fashion (Ann Taylor, Loft, and Lou & Grey), plus fashion (Lane Bryant, Catherines and Cacique), and value fashion (Dressbarn) segments, and for tween girls under value-fashion (Justice).