Ascena Retail Slips To Loss In Q4 - Quick Facts

(RTTNews) - ascena retail group Inc. (ASNA) reported that its net loss for fourth quarter ended July 25, 2015 was $323.4 million, compared to net income of $15.7 million in the year ago quarter. Loss was $1.98 per share compared to earnings of $0.10 per share last year. The Fiscal 2015 loss primarily reflected a $306 million impairment of goodwill and an intangible asset at Lane Bryant and an approximately $50 million accrual for costs related to the Justice pricing lawsuits.

The Company realized a loss from continuing operations for the fourth quarter of Fiscal 2015 of $323.4 million compared to income from continuing operations of $15.9 million last year.

On an adjusted basis, income from continuing operations for the fourth quarter of Fiscal 2015 was $9.8 million, as compared to $22.1 million last year.

Adjusted earnings from continuing operations for the fourth quarter of Fiscal 2015 were $0.06 per share, compared to $0.13 per share for the fourth quarter of Fiscal 2014. Analysts polled by Thomson Reuters expected the company to report earnings of $0.05 per share. Analysts' estimates typically exclude special items.

Net sales for the fourth quarter of Fiscal 2015 decreased 1.1% to $1.170 billion, from $1.182 billion for the fourth quarter of last year, as new store growth at maurices and positive combined comparable sales at Lane Bryant, maurices, and Catherines was offset by negative combined comparable sales at Justice and dressbarn. Wall Street expected revenues of $1.16 billion.

The Company's guidance for adjusted earnings per share from continuing operations for the fiscal year ending July 2016 is in the range of $0.75 to $0.80. This guidance includes the impact of the acquisition of ANN INC. on a pro forma basis for the entire fiscal year, and the impact of the incremental shares issued as a result of the acquisition, but excludes any acquisition and integration expenses that may be incurred during the fiscal year. Top-line sales is expected to be the range of $7.3 billion to $7.4 billion.

The Company's guidance reflects a contribution of $0.05 to $0.10 from the ANN INC. acquisition, inclusive of the impact of debt financing.

Excluding the contribution from the ANN INC. acquisition, the Company's guidance reflects the contribution from the legacy ascena brands. Top-line sales is expected to in the range of $4.78 billion to $4.84 billion.

Wall Street currently is looking for fiscal year 2016 earnings of $0.78 per share on annual revenues of $4.84 billion.

In addition to the $10 million in deal synergies included in its fiscal 2016 guidance, the Company continues to expect full run rate realization of $150 million in ANN-related synergies three years post deal close. The Company also continues to expect EPS accretion from the acquisition to accelerate to greater than 20% in fiscal 2017 and beyond as synergy capture progresses.