Ascena misses Street with Q3 profit, revenue

Mahwah, N.J. – Ascena Retail Group Inc. fell short of Wall Street expectations for profit and revenue in a difficult third quarter of fiscal 2015. Net income fell 23% to $24.4 million, from $33.2 million in the same quarter a year earlier.

Higher selling, general and administrative (SG&A) expenses were a major cause of reduced profits. These expenses included growth in store payroll; marketing campaigns; major IT initiatives including ongoing support for a new merchandising system, POS system, and ecommerce platform; and incremental incentive compensation.



Net sales slightly climbed to $1.15 billion, from $1.14 billion. Same-store sales fell 1%.



“We remain optimistic about the potential for all of our brands, and they each have distinct initiatives in place to drive higher levels of performance,” said David Jaffe, president and CEO of Ascena Retail Group. “We are also very excited about our announced acquisition of Ann Inc., and are looking forward to closing the deal in the second half of calendar 2015. The synergies we expect to unlock as a result of the deal will allow us to leverage the power of our shared services platform, and will deliver significant accretion to our shareholders."