Stock Monitor: Destination Maternity Post Earnings Reporting

LONDON, UK / ACCESSWIRE / January 04, 2018 / Active-Investors.com has just released a free earnings report on Ascena Retail Group, Inc. (NASDAQ: ASNA) ("Ascena"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=ASNA. Ascena reported its first-quarter fiscal 2018 operating results on December 04, 2017. The owner of clothing retail chains provided guidance for the upcoming quarter. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is currently working on the research report for Destination Maternity Corporation (NASDAQ: DEST), which also belongs to the Services sector as the Company Ascena Retail Group. Do not miss out and become a member today for free to access this upcoming report at:

www.active-investors.com/registration-sg/?symbol=DEST

Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Ascena Retail Group most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=ASNA

Earnings Highlights and Summary

For its fiscal first quarter ended October 28, 2017, Ascena's net sales were $1.59 billion compared to $1.68 billion in Q1 FY17. The decrease in sales reflected the impact of a 5% comparable sales decline, which was caused primarily by a mid-single digit decline in average selling price, offset in part by double digit transaction growth in the Company's direct channel. The three hurricanes which impacted the southern United States and Puerto Rico during Q1 FY18 negatively impacted Ascena's sales by approximately $11 million. Ascena's sales met analysts' expectations of $1.59 billion.

During Q1 FY18, Ascena's gross margin decreased to $965 million, or 60.7% of sales, compared to $1,014 million, or 60.4% of sales, in Q1 FY17. The Company's gross margin dollars decreased on a y-o-y basis as a result of the decline in comparable sales.

Ascena's buying, distribution, and occupancy (BD&O) expenses for Q1 FY18 declined 1% to $318 million, or 20.0% of sales, compared to $321 million, or 19.1% of sales, in Q1 FY17. The decrease in BD&O expenses was primarily due to lower occupancy expenses on a reduced store count, mainly as a result of the previously announced fleet optimization program. BD&O expenses as a percentage of net sales increased by 90 basis points primarily due to the de-leveraging effect of lower comparable sales.

For Q1 FY18, Ascena's selling, general, and administrative (SG&A) expenses declined 6% to $493 million, or 31.0% of sales, compared to $524 million, or 31.2% of sales, in Q1 FY17. The decrease in SG&A expenses was primarily due to approximately $35 million in synergies and cost reduction initiatives, mainly due to reductions in headcount and non-merchandise procurement savings.

Ascena's operating income for Q1 FY18 was $40 million compared to operating income of $51 million in the year-ago same period.

Ascena reported net income of $7 million, or $0.03 per diluted share, in Q1 FY18 compared to net income of $14 million, or $0.07 per diluted share, in Q1 FY17. The decrease was primarily driven by the comparable sales decline of 5%. For the reported quarter, the Company reported non-GAAP adjusted earnings of $0.11 per diluted share compared to non-GAAP adjusted earnings of $0.18 per diluted share in the year-ago corresponding period. Ascena's earnings met Wall Street's estimates of $0.11 per share.

Balance Sheet Highlights

Ascena ended Q1 FY18 with cash and cash equivalents of $303 million. Of this amount, approximately $240 million was held outside of the US. The Company ended the reported quarter with inventory of $744 million, down 8% from $808 million at the end of the year-ago same period.

Ascena's capital expenditures totaled $51 million in Q1 FY18, primarily to support new capabilities and strategic initiatives. The Company ended the reported quarter with total debt of $1.602 billion, which included $1.574 billion remaining on the term loan and $28 million of borrowings outstanding under the Company's revolving credit facility.

Outlook

For Q2 FY18, Ascena is forecasting non-GAAP loss per share in the range of $0.12 to $0.07. The Company is estimating net sales in the range of $1.62 billion to $1.66 billion; comparable sales in the band of down 4% to down 6%; and gross margin rate in the range of 55.0% to 55.5%;

During Q2 FY18, Ascena is forecasting operating income in the range of negative $15 million to $0 million and interest expense of approximately $26 million.

Stock Performance Snapshot

January 03, 2018 - At Wednesday's closing bell, Ascena's stock fell 3.38%, ending the trading session at $2.29.

Volume traded for the day: 1.03 million shares.

Stock performance in the last six-month ? up 7.01%

After yesterday's close, Ascena's market cap was at $454.68 million.

The stock is part of the Services sector, categorized under the Apparel Stores industry. This sector was up 0.5% at the end of the session.

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