Acquisition weighs on Ascena comps

Strong sales at Maurices and Lane Bryant weren’t enough to lift Ascena in the first quarter, as the company reported a decrease in comps.



For the period ended Oct. 24, the company reported a net loss of 10 cents per diluted share compared to net income of 32 cents per diluted share in the same period of fiscal 2015. The company blamed the decrease on transaction costs related to the acquisition of Ann Inc., which closed during the first quarter fof fiscal 2016. Comps dropped 3% in the first quarter.



“On the operating front, we were pleased with first quarter earnings, which exceeded our expectations,” said David Jaffe, president and CEO. “We saw strong sales performance at maurices and Lane Bryant, and significant gross margin rate recovery at Justice, Ann Taylor and Loft. We continue to execute well against controllable factors, and believe we have compelling product and the appropriate level and mix of inventory to maximize our holiday opportunity.



“Specific to the Black Friday/Cyber Monday period, we saw mixed performance across our portfolio. Importantly, we were very pleased with performance at Justice, which significantly exceeded our expectations during this critical peak period, delivering strong positive comp performance despite a reduced level of promotional activity."



Net sales at Ascena increased 40% to $1.672 billion, compared to $1.194 billion for the first quarter of last year.



Jaffe concluded: "As we discussed in detail at our investor day last month, the initial phase of our integration of Ann Inc. is progressing well, along with each of the synergy work-streams. We are increasingly confident that the Justice turnaround is gaining traction, and we're excited about the continuing improvement of Lane Bryant fundamentals, along with the sustained strength of Maurices performance. While Dressbarn had another challenging quarter, we continue to work to build the foundation for future growth."