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Women’s apparel retailer’s Q4 finishes strong

The parent company of such brands as Ann Taylor, Lane Bryant and Dressbarn ended its fiscal year on a high note, and beat expectations.

Ascena Retail Group reported net income of $$33.2 million, or 17 cents a share, compared with a loss of $15.8 million, or 8 cents a share, in the year-ago period. After adjustments for restructuring costs and other effects, Ascena claimed earnings of 7 cents a share. This was compared to 5 cents a share a year ago.

Net sales totaled $1.77 billion, up from $1.66 billion in the year-ago period. Total same-store sales increased by 4%, which the company attributed to approximately $88 million of sales associated with the additional sales week. Analysts on average expected adjusted earnings of 5 cents a share on net sales of $1.62 billion, according to FactSet.

For full fiscal year of 2018, the company reported a loss of 20 cents per diluted share, a loss that reflects a comparable sales decline of 2%, and costs associated with the company's “Change for Growth” transformation program. The loss was partially offset by the benefit of the additional week.

“Our fourth quarter reflected sequential comp improvement across all our brands, and the first enterprise-level positive comp quarter for Ascena since the second quarter of fiscal 2015,” said David Jaffe, CEO of Ascena Retail Group.

“We continue to make good progress across the three pillars of our Change for Growth transformation program,” he added. “We remain on track to achieve $300 million in annual run rate savings by July 2019, and are currently implementing the two remaining large capability-building components of our transformation program — localized planning and our customer experience management ecosystem.”

Looking ahead to Q1 of fiscal year 2019, the company expects net sales to hit $1.54 billion to $1.56 billion, and comparable sales that will be flat to up 2%.

For the full year, the company expects net sales to range between $6.45 billion and $6.55 billion, and comparable sales will be up in the low single digits. Earnings per share will range from 0 cents to 10 cents.
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