Ann Taylor parent Ascena posts wider fiscal Q2 loss, points to bleaker Q3
Ascena Retail Group Inc. ASNA, -5.03% late Thursday reported a wider-than-expected fiscal second-quarter loss, missed on sales, and said it was ready to fast-forward plans to rein in its cost structure on a bleaker third-quarter outlook. Shares were halted in the extended session ahead of the quarterly report, and fell more than 20% when trading resumed. The parent company of Ann Taylor, Dressbarn and other apparel brands said it lost $71.5 million, or 36 cents a share, in the quarter, compared with a loss of $39.3 million, or 20 cents a share, in the year-ago period. An increase in comparable sales "was more than offset by the impact of a lower gross margin rate and a lower benefit related to income taxes," Ascena said. Adjusted for one-time items, Ascena lost 26 cents a share in the quarter, compared with an adjusted loss of 12 cents a share a year ago. Sales fell to $1.69 billion, compared with $1.72 billion a year ago. Analysts polled by FactSet had expected Ascena to report an adjusted loss of 25 cents a share on sales of $1.71 billion. Chief Executive David Jaffe pinned the results in part to "macro headwinds" in retail, but faulted the company’s third-quarter outlook as "an unacceptable profit shortfall to the expectations we shared at the beginning of our fiscal year. As a result, we are working to accelerate plans that were already in development to take much more fundamental action to address our cost structure," he said in a statement. For the third quarter, the company said it expects a non-GAAP loss between 45 cents and 35 cents a share and net sales between $1.43 billion and $1.46 billion on a retreat in comparable-store sales between 4% and 2%. The analysts surveyed by FactSet had expected a break-even third quarter for Ascena on sales of $1.5 billion.
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