Justice still a struggle for Ascena Retail Group

Justice continues to be a drain on the Ascena Retail Group, as the company reported a drop in same store sales for the second quarter.

The operator of Justice, as well as stores under the Lane Bryant, Cacique, Maurices, Dressbarn, and Catherines brands, said combined same store sales declined 2% during its second quarter of fiscal 2015 ended Jan. 25 due to sluggish sales at Justice.

David Jaffe, president and CEO of Ascena Retail Group Inc., said: “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. 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.”

The company posted net income of 5 cents per share. Earnings, adjusted for costs related to mergers and acquisitions and non-recurring costs, were 7 cents per share. The results did not meet Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 8 cents per share.

Net sales for the second quarter increased 1.7% to $1.289 billion, compared to $1.267 billion in the second quarter of fiscal 2014, as new store growth at Justice and Maurices and positive combined same store sales at Lane Bryant, maurices, dressbarn and Catherines was offset by negative same store sales at Justice. On an adjusted basis, net income for the second quarter was $22.0 million, or 1.7% of sales compared to $59 million, or 4.7% of second quarter sales last year. Adjusted earnings from continuing operations in the second quarter of fiscal 2015 were $0.07 per diluted share, compared to $0.23 per diluted share in the prior year’s second quarter.

Jaffe added: “Overall, our strategy and investments provide us with a strong foundation to generate and capitalize on our future top-line growth. We continue to build and leverage our operating model to deliver better profitability, and to drive sustained value for our shareholders over time."

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