Holiday sales soft for some parts of Ascena
SUFFERN, N.Y. — Ascena Retail Group reported a lower than expected 2% decline in same store sales at physical stores for the November and December holiday period, but managed a 30% increase in online sales.
Combined comparable store and e-commerce sales for the holiday period ended December 29, 2012 increased 1%, prompting Ascena to lower earnings per share guidance for its current fiscal year ending July 27.
“The holiday selling season proved to be challenging and we increased promotional activity in order to ensure appropriate inventory levels going forward. We are taking the necessary markdowns in the second quarter to effectively transition into the spring season,” said David Jaffe, Ascena’s president and CEO. “As a result, we now believe full year adjusted diluted earnings per share guidance in the range of $1.20 to $1.30 is more appropriate, versus our previous guidance of $1.45 to $1.55.
Ascena offers clothing, shoes and accessories for missy and plus-size women and tween girls, under the Justice, Lane Bryant, Maurices, Dressbarn and Catherines brands. While Justice and Catherines had in-store sales increases of 5% and 4%, respectively, Lane Byant experienced a 9% decline, Maurices a 2% decline and Dressbarn an 8% decline.
The specialty retailer plans to open 200 stores and close 125 stores by the end of its fiscal year, giving it a total of roughly 3,900 units across all formats.
The update on the company’s financial performance during the holidays follows the recent appointment of Dirk Montgomery as its new EVP and CFO, following current EVP and CFO Armand Correia’s announcement that he is retiring after 21 years with the company.
“I am very excited to be joining Ascena and share the strong vision the Ascena team has to continue to grow the business and to further extend the company’s leadership position in the specialty retailing industry. I look forward to the work ahead, including completing the integration projects already underway and, more broadly, to sharing my experience and expertise in developing and implementing a thoughtful and strategic approach to growth and value creation in the years ahead,” said Montgomery at the time.
Prior to coming over to Ascena, Montgomery was EVP and chief value chain officer of Bloomin’ Brands, which operates global restaurant brands Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse, and generated approximately $4 billion in annual revenues. Prior to that position, he served as CFO of Bloomin’ Brands for six years, and was CFO of the $9 billion Con Agra Foods Retail Group, CFO of Express (previously a division of Limited Brands) and served in several senior management positions with the Sara Lee Corporation.