MAHWAH, N.J., 2016-Sep-20 — /EPR Retail News/ — ascena retail group, inc. (NASDAQ – ASNA) (the “Company”) today (Sep. 19, 2016) reported financial results for its fiscal fourth quarter and full year ended July 30, 2016. Fiscal 2016 reflected a 53-week fiscal year for the Company, and as a result, the Company’s fourth quarter GAAP results for Fiscal 2016 reflect a 14-week period, while non-GAAP adjusted results reflect a 13-week period comparable to the prior year 13-week period. Additionally, the Company’s non-GAAP adjusted financial results for its fiscal fourth quarter ended July 30, 2016 exclude acquisition and integration expenses, and non-cash expenses associated with the purchase accounting adjustments of ANN’s assets and liabilities to fair market value. The Company’s non-GAAP adjusted financial results for its fiscal fourth quarter ended July 25, 2015 exclude a $306 million impairment of goodwill and an intangible asset related to Lane Bryant, and an expense of $51 million related to Justice pricing lawsuits.
For the fourth quarter of Fiscal 2016, the Company reported GAAP earnings of $0.07 per diluted share compared to a loss of $1.98 per diluted share in the same period of Fiscal 2015. The increase was driven by the acquisition of ANN, which closed during the first quarter of Fiscal 2016, along with prior year items including the impairment of goodwill and an intangible asset at Lane Bryant and the expense related to the Justice pricing lawsuits. For the fourth quarter of Fiscal 2016, the Company reported non-GAAP adjusted earnings of $0.08 per diluted share which excludes the purchase accounting expenses and acquisition and integration costs associated with the acquisition of ANN, as well as the estimated impact of the 53rd week.
For full year Fiscal 2016, the Company reported a GAAP loss of $0.06 per diluted share as a result of acquisition and integration costs, and the effect of non-cash purchase accounting adjustments, all of which were related to the acquisition of ANN. The Company reported a loss of $1.46 per diluted share in the same period of Fiscal 2015 primarily due to the previously discussed charges for the Lane Bryant impairments and Justice pricing lawsuits. Non-GAAP adjusted earnings for the 52-week period ending July 23, 2016 were$0.60 per diluted share, which excludes the aforementioned ANN items and the estimated impact of the 53rdweek.
David Jaffe, President and Chief Executive Officer of ascena retail group, inc., commented, “Fiscal 2016 was a challenging year for ascena, characterized by a highly competitive selling environment and significant store traffic headwinds. While we are seeing good customer demand during peak periods, off-peak demand has been inconsistent, and fourth quarter financial performance fell well below our expectations.”
Jaffe concluded, “Aside from the challenging business trend we’ve seen, I’d like to highlight progress in four key areas of our business that I believe lay the foundation for stronger future performance. First, we were pleased by the Justice turnaround. The Justice team delivered full-year operating margin in the middle of the guidance range we provided last September. Second, our integration of ANN continues to progress well, and we remain ahead of plan with our synergy and cost savings workstreams. Third, the new ascena omni-channel platform went live at Justice in the fourth quarter, and the early reads on demand growth have significantly exceeded our expectations. And finally, we continue to make progress with our enterprise transformation work, and we are currently moving forward to address identified opportunities.”
Fiscal Fourth Quarter 2016 Results
Net Sales and Comparable Sales
On a GAAP basis, Net sales for the fourth quarter of Fiscal 2016 were $1.812 billion compared to $1.170 billion last year, with the increase driven by the acquisition of ANN, which was not included in the prior year. Fiscal 2016 also includes Net sales of approximately $82 million associated with the 53rd week. Comparable sales at the legacy ascena brands (excluding ANN) were down 4% for the quarter based on the comparable 13-week period. On a non-GAAP adjusted basis, Net sales were $1.731 billion.
ascena retail group, inc.
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ascena retail group, inc.
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