Ascena Retail Q1 Profit Rises - Update

(RTTNews) - Clothing retailer Ascena Retail Group Inc (ASNA), Tuesday reported an increase in profit for the first quarter despite lower revenues and higher operating costs, as last year's bottom line was weighed down by a loss from discontinued operations. Earnings for the quarter trumped Wall Street estimates, while revenues were in line with expectations.

Suffern, New York-based Ascena's first-quarter profit rose to $53.5 million or $0.32 per share from $52.6 million or $0.32 per share last year. Last year's results included a loss from discontinued operations of $1.7 million.

Excluding items, adjusted earnings for the quarter were $0.28 per share compared to $0.36 per share last year. On average, analysts polled by Thomson Reuters expected earnings of $0.26 per share for the quarter. Analysts' estimates typically exclude special items.

Ascena's revenues for the first quarter declined to $1.19 billion from $1.20 billion last year. Analysts had a consensus revenue estimate of $1.19 billion for the quarter.

Total combined comparable sales for the quarter declined 2 percent, while gross margin increased to 58.2 to 57.9 percent last year. Ascena's apparel targets women, and tween girls and boys. The company operates under segments such as Justice, Lane Bryant, maurices and Catherines.

Chief Executive David Jaffe said, "We are pleased that we delivered the first quarter in line with our expectations. Conditions remain challenging as we transition into Holiday, and we will react appropriately to drive sales to ensure we end the season at targeted inventory levels."

Buying, distribution and occupancy costs rose to $214.4 million from $207.6 million last year, while selling, general and administrative expenses increased to $354.5 million from $348.1 million a year ago.

Looking forward to the full year 2015, the company reaffirmed its adjusted earnings from continuing operations forecast of $0.90 to $1.00 per share. Analyst currently expect earnings of $0.91 per share for 2015.

ASNA closed Tuesday's trading at $12.95, down $0.09 or 0.69%, on the Nasdaq. The stock, however, gained $0.55 or 4.25%, in the after-hours trade.