Ascena Retail misses Street in Q2

Mahwah, N.J. – Higher selling, general and administrative (SG&A) expenses, including asset impairment charges primarily related to lower-than-expected operating performance at the struggling Justice banner, cut into profits at Ascena Retail Group Inc. during the second quarter of fiscal 2015.



Ascena, the operator of Justice, as well as stores under the Lane Bryant, Cacique, Maurices, Dressbarn, and Catherines banners, said combined same store sales declined 2% during the quarter, ended Jan. 25, due to sluggish sales at Justice.

“Looking back on the second quarter, while conditions remained very challenging at Justice, we saw performance improve across our other brands as we moved through holiday into January,” said David Jaffe, president and CEO. “We are excited about several of our major brand initiatives, including the continued rollout of our active/athleisure lines at multiple brands, our upcoming Cacique campaign, and our Dressbar launch."



A higher effective tax rate also helped reduce net income in the second quarter of fiscal 2015 to $8.7 million, down 72% from $31.9 million the same quarter a year earlier and missing Wall Street expectations. Net sales slightly rose to $1.28 billion from $1.27 billion, also missing Street projections. Combined same-store sales rose 1%, brought down by negative same-store sales at Justice.



Ascena Retail Group has approximately 3,900 stores throughout the United States and Canada.