Ascena Retail Q4 Earnings Top Estimates

Ascena Retail Group Inc (NASDAQ: ASNA) reported better-than-expected earnings for its fiscal fourth quarter on Wednesday.

The Mahwah, New Jersey-based company reported a quarterly loss from continuing operations of $323.4 million, or $1.98 per share, compared to earnings from continuing operations of $15.9 million, or $0.10 per share. Excluding items, the company's adjusted earnings from continuing operations slipped to $0.06 per share from $0.13 per share.

Its revenue declined 1.1 percent to $1.17 billion from $1.18 billion. However, analysts were expecting earnings of $0.05 per share on revenue of $1.16 billion.

The average estimate among 11 Estimize users was for earnings of $0.06 per share and revenue of $1.17 billion.

Its gross margin narrowed to 54.5 percent of sales for the fourth quarter, versus 54.7 percent in the year-ago quarter.

Selling, general and administrative expenses for the fourth quarter increased to $399.7 million from $343.5 million.

Ascena Retail ended the quarter with cash and cash equivalents of $240.6 million and total debt of $116.0 million, versus $156.9 million of cash and cash equivalents and $172.0 million of total debt at the end of the year-ago quarter.

David Jaffe, President and Chief Executive Officer of ascena retail group, inc., said, "Results for the quarter were challenged by two large, non-operating expense hits related to a goodwill and trade name impairment at Lane Bryant and litigation activity at Justice. On the operating front, Justice had a difficult quarter as expected, and dressbarn missed expectations due to assortment challenges. With all that said, we were pleased with fourth quarter performance at maurices, Lane Bryant, and Catherines."

For the full year, Ascena Retail projects earnings of $0.75 to $0.80 per share, and revenue of $4.78 to $4.84 billion, excluding the contribution from the Ann acquisition.

Ascena Retail shares gained 2.34 percent to $12.25 in pre-market trading.