Ascena downgrades 2015 outlook

Mahwah, N.J. - Ascena Retail Group Inc. has downgraded several aspects of its outlook for fiscal 2015, which ends July 25. Ascena now expects full-year adjusted EBITDA from continuing operations in the range of $365 million to $375 million, and full-year adjusted earnings per diluted share from continuing operations in the range of $0.57 to $0.60, as compared to its prior expectation of $0.70 to $0.75 per share



Factors dampening Ascena’s expected performance include a non-cash, pre-tax goodwill and intangible asset impairment charge in the range of $275 million to $325 million related to Lane Bryant, as well as a pre-tax charge of approximately $50 million to establish a reserve for the future settlement of Justice class action litigation.



In addition, Ascena is updating its outlook to reflect its recent decision to accelerate its planned merchandise transition at Justice and to incorporate lower than expected top-line performance at Justice and Dressbarn.



“While we expected a challenging quarter at Justice due to the sell-down of Spring/Summer merchandise coupled with a significant reduction in promotional activity, our revised fourth quarter expectation incorporates a more complete exit from the existing season’s merchandise mix,” David Jaffe, president and CEO. “After careful consideration, we have determined that an even more aggressive sell-down of spring/summer goods at Justice is prudent, and will result in a cleaner selling floor and a well-communicated value proposition for the fall season.”