– Fourth Quarter GAAP EPS $0.10; Adjusted
EPS $0.13 –
– Fourth Quarter Total Comparable Sales (2%)
–
– Fiscal 2015 Full Year EPS Guidance Range
$0.90 - $1.00 –
Ascena Retail Group, Inc. (NASDAQ – ASNA) (the “Company”)
today reported financial results for its fiscal fourth quarter and
full year ended July 26, 2014.
For the fourth quarter of Fiscal 2014, earnings from continuing
operations were $0.10 per diluted share. This compares to earnings
from continuing operations of $0.23 per diluted share in the same
period of Fiscal 2013. Adjusted earnings from continuing operations
in the fourth quarter of Fiscal 2014 were $0.13 per diluted share,
compared to $0.34 per diluted share in the prior year’s fourth
quarter. Reference should be made to Note 2 in the accompanying
unaudited consolidated financial information for a discussion of
the use of “Non-GAAP Financial Measures.”
For the full year Fiscal 2014, earnings from continuing
operations were $0.84 per diluted share. This compares to earnings
from continuing operations of $0.95 per diluted share in the same
period of Fiscal 2013. Adjusted earnings from continuing operations
for the full year Fiscal 2014 were $1.00 per diluted share,
compared to $1.25 per diluted share in the prior year.
David Jaffe, President and Chief Executive Officer of Ascena
Retail Group, Inc., commented, “Despite mixed results across our
portfolio and continuing soft traffic patterns, fourth quarter EPS
was in line with our expectations. We have yet to see sustained
evidence of market improvement, and as a result, are maintaining a
conservative outlook as we enter the Fall season."
Jaffe further commented, “We continue to focus on controlling
what we can control - refining our merchandising execution,
maintaining focus on inventory levels and expense management,
developing an integrated ecommerce platform for our customers, and
driving efficiency improvements through our strategic investments.
Our final brand is in the process of moving into our retail
distribution center in Ohio, and we remain on track to have all our
brands operating out of our new ecommerce fulfillment center by
Spring of calendar 2015. Fiscal 2015 will see the continuation of a
critical, multi-year investment to build out our omnichannel
platform. We continue to create a business model that will drive
sustainable long term value for our shareholders.”
About Ascena Retail Group,
Inc.
Ascena Retail Group, Inc. (NASDAQ:ASNA) is a leading specialty
retailer offering clothing, shoes, and accessories for missy and
plus-size women under the Lane Bryant, Cacique,
maurices, dressbarn and Catherines brands; and
for tween girls and boys, under the Justice and
Brothers brands. Ascena Retail Group, Inc. operates through
its subsidiaries approximately 3,900 stores throughout the United
States and Canada.
For more information about Ascena Retail Group, Inc. and its
brands, visit www.ascenaretail.com,
www.lanebryant.com, www.cacique.com,
www.maurices.com, www.dressbarn.com, www.catherines.com, www.shopjustice.com, and www.shopbrothers.com.
Fiscal Fourth Quarter
Results
Net sales for the fourth quarter of Fiscal 2014 decreased 1.3%
to $1.182 billion, compared to $1.198 billion in the fourth quarter
of Fiscal 2013. This decrease was caused by challenging tween
market conditions at Justice and inventory-related issues at
Lane Bryant, partially offset by positive comp growth at
maurices and Catherines and new store growth at
maurices.
The Company’s comparable sales data for the fiscal fourth
quarter is summarized below:
ascena store comparable sales
(4 )%
ascena ecommerce comparable sales 13 %
Total
combined comparable sales (2 )%
Total
Combined
Comparable
Sales
Net Sales (millions) July 26,
2014
July 27,
2013
Justice (10 )% $ 286.1 $ 309.2
Lane Bryant (2 )%
284.3 293.7
maurices 1 % 227.1 216.6
dressbarn — %
293.8 290.0
Catherines 7 % 91.1 88.2
Gross margin for the fourth quarter of Fiscal 2014 decreased to
$647.2 million, or 54.7% of sales, compared to $654.2 million, or
54.6% of fourth quarter sales last year. Strong rate improvement at
maurices and dressbarn was offset by an increased
level of clearance activity at Justice and Lane
Bryant to achieve targeted inventory levels.
Buying, distribution and occupancy (“BD&O”) costs for the
fourth quarter of Fiscal 2014 were $206.5 million, or 17.5% of
sales, compared to $197.1 million, or 16.5% of fourth quarter sales
last year. The expense increase compared to last year reflects
investments in merchandising and design functions, as well as the
impact of new store growth at Justice and
maurices.
Selling, general and administrative (“SG&A”) expenses for
the fourth quarter of Fiscal 2014 were $343.5 million, or 29.1% of
sales, compared to $330.8 million, or 27.6% of fourth quarter sales
last year. The increase in total expense was primarily related to
store payroll growth on a higher unit base, headcount growth at the
brands to support our direct channel, and growth at our Shared
Services Group to support synergy initiatives.
Operating income for the fourth quarter of Fiscal 2014 was $22.5
million, or 1.9% of sales, compared to $58.3 million, or 4.9% of
sales last year. On an adjusted basis, operating income for the
fourth quarter of Fiscal 2014 was $32.5 million, or 2.7% of sales
compared to $87.0 million, or 7.3% of sales last year.
The effective tax rate for the fourth quarter of Fiscal 2014 was
25.0%, which was lower than the Company’s expectations due to the
combined effect of permanent investments in our Asian and Canadian
businesses, along with lower than expected pre-tax earnings for the
quarter.
Income from continuing operations for the fourth quarter of
Fiscal 2014 was $15.9 million as compared to $38.3 million in the
prior year’s fourth quarter. On an adjusted basis, income from
continuing operations for the fourth quarter of Fiscal 2014 was
$22.1 million, as compared to $56.3 million in the prior year’s
fourth quarter.
The Company reported earnings from continuing operations and net
income of $0.10 per diluted share. For the prior year fourth
quarter, the Company reported earnings from continuing operations
of $0.23 per diluted share, a loss from discontinued operations of
$0.05 and net income of $0.18 per diluted share.
Fiscal Fourth Quarter Balance Sheet
Highlights
The Company ended the fourth quarter of Fiscal 2014 with cash
and investments of $187.3 million and total debt of $172.0 million,
compared to $189.4 million of cash and investments and $135.6
million of debt at the end of Fiscal 2013.
Fiscal Year 2015
Guidance
The Company’s guidance for adjusted earnings per diluted share
from continuing operations for the fiscal year ending July 2015 is
in the range of $0.90 to $1.00. This guidance excludes any
acquisition-related, integration and restructuring costs that may
be incurred during the fiscal year. The Company noted that its
guidance is based upon an ongoing challenging retail environment
and is based on the following key assumptions:
- Flat to modest positive total comp
growth for the year, with Fall flat to down low-single digits and
Spring up low-single digits
- Net new store increase of 30-40
units
- Double digit growth in depreciation,
with projected expense between $210 and $215 million
- Capital expenditures in the range of
$350 to $375 million
- Effective tax rate of 37% vs. 32% for
Fiscal 2014
- Earnings per share down to last year in
the first half, with growth in the second half
- Mid-to-high single digit EBITDA
growth
- EBITDA rate flat to up 20bp, with
80-100bp improvement in gross margin rate mostly offset by
operating expense rate de-leverage
The Company plans to increasingly focus on Adjusted EBITDA as an
important indicator of its underlying financial performance as it
normalizes for major changes in non-cash depreciation and the
Company’s effective tax rate. As referenced above, Fiscal 2015
guidance anticipates significant depreciation growth and an
increase in effective tax rate to historic levels.
Conference Call
Information
The Company will conduct a conference call today, September 22,
2014, at 4:30 PM Eastern Time to review its fourth quarter Fiscal
2014 results, followed by a question and answer session. Parties
interested in participating in this call should dial in at (617)
399-3484 prior to the start time, the passcode is 96792625. The
call will also be simultaneously broadcast at www.ascenaretail.com. A recording of the call will
be available shortly after its conclusion and until October 22,
2014 by dialing (617) 801-6888, the passcode is 77849344.
Non-GAAP Financial
Results
Ascena’s financial results for its fiscal fourth quarter and
full year ended July 26, 2014 reflect certain acquisition-related
integration and restructuring costs. Additionally, the Company also
incurred in Fiscal 2014 charges related to accelerated depreciation
of certain assets that were displaced by the Company’s supply chain
and technology integration efforts. Finally, the Company also
incurred certain charges in Fiscal 2013 related to the
extinguishment of debt and non-cash inventory expense associated
with the purchase accounting write-up of inventory to fair market
value. Management believes that all such costs are not indicative
of the Company’s underlying operating performance. As such,
adjusted results for Fiscal 2014 and Fiscal 2013, which exclude the
effect of such costs, have been presented to supplement the
reported results. Reference should be made to Note 2 of the
unaudited consolidated financial information included herein for a
reconciliation of adjusted, non-GAAP financial measures to the most
directly comparable GAAP financial measures.
Forward-Looking
Statements
Certain statements made within this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially. The Company does
not undertake to publicly update or review its forward-looking
statements even if experience or future changes make it clear that
our projected results expressed or implied will not be achieved.
Detailed information concerning a number of factors that could
cause actual results to differ materially from the information
contained herein is readily available in the Company’s most recent
Annual Report on Form 10-K.
Ascena Retail Group, Inc.
Consolidated Statements of Operations
(unaudited)
(millions, except per share
data)
Fourth Quarter Ended
July 26,
2014
% of Net
Sales
July 27,
2013
% of Net
Sales
Net sales $ 1,182.4 100.0 % $ 1,197.7 100.0 % Cost of goods
sold (535.2 ) (45.3 )% (543.5 ) (45.4 )%
Gross margin 647.2
54.7 % 654.2 54.6 %
Other costs and expenses: Buying,
distribution and occupancy costs (206.5 ) (17.5 )% (197.1 ) (16.5
)% Selling, general and administrative expenses (343.5 ) (29.1 )%
(330.8 ) (27.6 )% Acquisition-related, integration and
restructuring costs (9.1 ) (0.8 )% (14.5 ) (1.2 )% Impairment of
intangible assets (13.0 ) (1.1 )% — — % Depreciation and
amortization expense (52.6 ) (4.4 )% (53.5 ) (4.5 )%
Operating
income 22.5 1.9 % 58.3 4.9 % Interest expense (1.7 ) (0.1 )%
(1.3 ) (0.1 )% Interest and other income (expense), net 0.4
— % (0.2 ) — %
Income from continuing operations before
provision for income taxes 21.2 1.8 % 56.8 4.7 % Provision for
income taxes from continuing operations (5.3 ) (0.4 )% (18.5 ) (1.5
)%
Income from continuing operations 15.9 1.3 % 38.3 3.2 %
Loss from discontinued operations, net of taxes (0.2 ) — % (8.5 )
(0.7 )%
Net income $ 15.7 1.3 % $ 29.8 2.5 %
Net income per common share - basic: Continuing
operations $ 0.10 $ 0.24 Discontinued operations — (0.05 )
Total net income per basic common share $ 0.10 $ 0.19
Net income per common share - diluted:
Continuing operations $ 0.10 $ 0.23 Discontinued operations —
(0.05 )
Total net income per diluted common share $
0.10 $ 0.18
Weighted average common shares
outstanding: Basic 161.6 158.5 Diluted 164.8
163.8
See accompanying notes.
Ascena Retail Group, Inc.
Consolidated Statements of Operations
(Unaudited)
(millions, except per share
data)
Fiscal Year Ended
July 26,
2014
% of Net
Sales
July 27,
2013
% of Net
Sales
Net sales $ 4,790.6 100.0 % $ 4,714.9 100.0 % Cost of goods
sold (2,130.6 ) (44.5 )% (2,137.7 ) (45.3 )%
Gross margin
2,660.0 55.5 % 2,577.2 54.7 %
Other costs and expenses:
Buying, distribution and occupancy costs (832.3 ) (17.4 )% (770.5 )
(16.3 )% Selling, general and administrative expenses (1,376.3 )
(28.7 )% (1,330.8 ) (28.2 )% Acquisition-related, integration and
restructuring costs (34.0 ) (0.7 )% (34.6 ) (0.7 )% Impairment of
intangible assets (13.0 ) (0.3 )% — — % Depreciation and
amortization expense (193.6 ) (4.0 )% (176.0 ) (3.7 )%
Operating
income 210.8 4.4 % 265.3 5.6 % Interest expense (6.5 ) (0.1 )%
(13.8 ) (0.3 )% Interest and other (expense) income, net (0.8 ) — %
0.4 — % Loss on extinguishment of debt — — % (9.3 ) (0.2 )%
Income from continuing operations before provision for income
taxes 203.5 4.2 % 242.6 5.1 % Provision for income taxes from
continuing operations (65.3 ) (1.4 )% (87.4 ) (1.9 )%
Income
from continuing operations 138.2 2.9 % 155.2 3.3 % Loss from
discontinued operations, net of taxes (4.8 ) (0.1 )% (3.9 ) (0.1 )%
Net income $ 133.4 2.8 % $ 151.3 3.2 %
Net income per common share - basic: Continuing operations $
0.86 $ 0.99 Discontinued operations (0.03 ) (0.03 )
Total net
income per basic common share $ 0.83 $ 0.96
Net income per common share - diluted: Continuing
operations $ 0.84 $ 0.95 Discontinued operations (0.03 ) (0.02 )
Total net income per diluted common share $ 0.81 $
0.93
Weighted average common shares
outstanding: Basic 160.6 157.3 Diluted 165.1
163.3
See accompanying notes.
Ascena Retail Group, Inc.
Consolidated Balance Sheets
(Unaudited)
(millions)
Fiscal Year Ended
July 26,
2014
July 27,
2013
ASSETS Current assets: Cash and cash equivalents $
156.9 $ 186.4 Short-term investments 30.4 3.0 Inventories 553.2
540.9 Assets related to discontinued operations — 38.8 Deferred tax
assets 46.7 53.0 Prepaid expenses and other current assets 136.4
120.7
Total current assets 923.6 942.8 Property and
equipment, net 1,110.6 824.8 Goodwill 581.4 581.4 Other intangible
assets, net 435.4 451.1 Other assets 72.8 71.6
Total
assets $ 3,123.8 $ 2,871.7
LIABILITIES AND
EQUITY Current liabilities: Accounts payable $ 253.2 $
259.2 Accrued expenses and other current liabilities 308.9 285.3
Deferred income 63.5 61.2 Liabilities related to discontinued
operations — 21.5 Income taxes payable 6.3 8.7 Current portion of
long-term debt — 0.6
Total current liabilities 631.9
636.5 Long-term debt 172.0 135.0 Lease-related liabilities 248.5
242.9 Deferred income taxes 147.7 131.7 Other non-current
liabilities 186.0 169.2
Total liabilities 1,386.1
1,315.3
Total equity 1,737.7 1,556.4
Total
liabilities and equity $ 3,123.8 $ 2,871.7
See accompanying notes.
Ascena Retail Group, Inc.
Segment Information (Unaudited)
(millions)
Fourth Quarter Ended
Fiscal Year Ended
July 26,
2014
July 27,
2013
July 26,
2014
July 27,
2013
Net sales:
Justice $ 286.1 $ 309.2 $ 1,384.3 $ 1,407.4
Lane Bryant 284.3 293.7 1,080.0 1,050.1
maurices
227.1 216.6 971.4 917.6
dressbarn 293.8 290.0 1,022.5
1,020.7
Catherines 91.1 88.2 332.4
319.1 Total net sales $ 1,182.4 $ 1,197.7 $ 4,790.6
$ 4,714.9
Fourth Quarter Ended Fiscal Year
Ended
July 26,
2014
July 27,
2013
July 26,
2014
July 27,
2013
Operating income (loss):
Justice $ (15.0 ) $ 14.2 $ 99.3 $
182.3
Lane Bryant (2.4 ) (2.4 ) (4.3 ) (30.1 )
maurices 0.8 14.7 86.0 107.0
dressbarn 40.9 40.0 39.4
30.3
Catherines 7.3 6.3 24.4 10.4 Unallocated
acquisition-related, integration and restructuring costs (9.1 )
(14.5 ) (34.0 ) (34.6 ) Total operating income $ 22.5 $ 58.3
$ 210.8 $ 265.3
Fourth Quarter
Ended Fiscal Year Ended
July 26,
2014
July 27,
2013
July 26,
2014
July 27,
2013
Adjusted EBITDA:
Justice $ 0.5 $ 32.7 $ 160.0 $ 238.6
Lane Bryant 10.3 11.3 41.3 28.9
maurices 11.6 23.8
125.5 138.5
dressbarn 52.3 50.1 79.9 68.8
Catherines
9.5 8.4 31.7 21.0 Total Adjusted EBITDA $ 84.2 $ 126.3 $ 438.4 $
495.8
See accompanying notes.
Ascena Retail Group, Inc.Notes to Unaudited
Consolidated Financial Information
Note 1. Basis of Presentation
Discontinued Operations
Contemporaneously with the June 2012 acquisition of Charming
Shoppes, Inc. (the “Charming Acquisition”), the Company announced
its intent to cease operating the acquired Fashion Bug
business and its intent to sell the acquired Figi’s
business. The Fashion Bug business ceased operations in
February 2013 and the Company closed on the sale of the net assets
of the Figi’s business in October 2013. These businesses
have been classified as discontinued operations within the
unaudited consolidated financial statements.
Reclassifications
Historically, the Company included freight costs to move
merchandise from its distribution centers to its retail stores
within Buying, distribution and occupancy costs. As these costs
were appropriately treated as a component of inventory, such costs
should have been expensed to Cost of goods sold as the inventories
were sold. In the fourth quarter of Fiscal 2014, the Company
restated its prior period information by reclassifying these
freight costs of $47.4 million in Fiscal 2013 and $23.3 million in
Fiscal 2012 from Buying, distribution and occupancy costs to Cost
of goods sold. There were no changes to historical operating income
or historical net income for any period as a result of this
change.
In addition, given the significant increase in ecommerce
revenues and related shipping costs, the Company concluded that
freight costs to bring ecommerce merchandise to its final
destination should be classified consistently with brick-and-mortar
freight charges. This presentation aligns with how the Company now
evaluates the effect of the increased ecommerce business on its
results from operations. As a result, in the fourth quarter of
Fiscal 2014, the Company changed its financial statement
presentation of these shipping costs for all periods presented.
Costs of $23.5 million in Fiscal 2013 and $7.8 million in Fiscal
2012, which previously were recorded in Buying, distribution and
occupancy costs, are now included in Costs of goods sold. There
were no changes to historical operating income or historical net
income for any period as a result of this change.
Certain other immaterial reclassifications have been made to the
prior period financial information in order to conform to the
current period's presentation.
Note 2. Use of Non-GAAP Financial Measures
To provide investors information to assist them in assessing the
Company’s ongoing operations on a comparable basis, the Company has
provided Fiscal 2014 and Fiscal 2013 financial measures in this
press release that reflect certain acquisition-related, integration
and restructuring costs in connection with the Charming
Acquisition. Additionally, the Company also incurred charges for
the accelerated depreciation of certain assets that were displaced
by the Company’s supply chain and technology integration efforts.
Finally, the Company also incurred certain charges in Fiscal 2013
related to the extinguishment of debt and non-cash inventory
expense associated with the purchase accounting write-up of
inventory to fair market value. Management believes that all such
costs are not indicative of the Company’s underlying operating
performance. Throughout this release, the term “reported” refers to
information prepared in accordance with accounting principles
generally accepted in the United States (GAAP), while the term
“adjusted” refers to non-GAAP financial information adjusted to
exclude certain costs. All information in the tables below are
presented for the Company’s continuing operations.
In addition, we present the financial performance measure of
earnings before interest, taxes, depreciation and amortization, as
adjusted ("Adjusted EBITDA") to exclude the non-operating related
items discussed above, as well as extinguishments of debt and other
income and expenses classified outside of operating income. These
measures may not be directly comparable to similar measures used by
other companies and should not be considered a substitute for
performance measures in accordance with GAAP such as operating
income and net income reported herein. The table below reconciles
Adjusted EBITDA to Net income as reflected in our unaudited
consolidated statements of operations. For a more detailed
discussion on our use of Adjusted EBITDA, reference is made to our
Annual Report on Form 10-K for the Fiscal Year Ended July 26, 2014,
as filed with the Securities and Exchange Commission.
Ascena Retail Group, Inc.
Notes to Consolidated Unaudited
Financial Information - (continued)
Note 2. Use of Non-GAAP Financial
Measures - (continued)
Reconciliation of Reported Basis to Adjusted Basis
(millions, except per share
data)
Fourth Quarter
Full Year FY 2014 FY 2014
Income
before
income
taxes
Income
taxes
Net
income
Diluted net
income per
common
share
Income
before
income
taxes
Income
taxes
Net
income
Diluted net
income per
common
share
Reported basis – continuing operations $ 21.2 $ (5.3 ) $ 15.9 $
0.10 $ 203.5 $ (65.3) $ 138.2 $ 0.84 Adjustments:
Acquisition-related, integration and restructuring costs 9.1 (3.4 )
5.7 0.03 34.0 (12.7) 21.3 0.13 Accelerated depreciation related to
integration efforts 0.9 (0.4 ) 0.5 0.00 8.6
(3.3) 5.3 0.03 Adjusted basis – continuing operations
$ 31.2 $ (9.1 ) $ 22.1 $ 0.13 $ 246.1 $
(81.3) $ 164.8 $ 1.00
Fourth Quarter Full
Year FY 2013 FY 2013 Income
before
income
taxes
Income
taxes
Net
income
Diluted net
income per
common
share
Income
before
income
taxes
Income
taxes
Net
income
Diluted net
income per
common
share
Reported basis – continuing operations $ 56.8 $ (18.5 ) $ 38.3
$ 0.23 $ 242.6 $ (87.4
)
$ 155.2 $ 0.95 Adjustments: Non-recurring
inventory purchase accounting adjustments — — — — 19.9 (7.4
)
12.5
0.08 Acquisition-related, integration and restructuring costs 14.5
(5.4 ) 9.1 0.06 34.6 (12.8
)
21.8 0.13 Accelerated depreciation related to integration efforts
14.2 (5.3 ) 8.9 0.05 14.2 (5.3
)
8.9 0.05 Loss on extinguishment of debt — — —
— 9.3 (3.5
)
5.8
0.04 Adjusted basis – continuing operations $ 85.5 $
(29.2 ) $ 56.3 $ 0.34 $ 320.6 $ (116.4
)
$ 204.2 $ 1.25
Fourth Quarter
Full Year Operating Income:
FY 2014
FY 2013 FY 2014 FY
2013 Reported basis – continuing operations $ 22.5 $
58.3 $ 210.8 $ 265.3 Adjustments: Non-recurring inventory purchase
accounting adjustments 19.9 Acquisition-related, integration and
restructuring costs 9.1 14.5 34.0 34.6 Accelerated depreciation
related to integration
0.9
14.2 8.6
14.2
Adjusted basis – continuing operations $ 32.5 $ 87.0
$ 253.4 $ 334.0
Ascena Retail Group, Inc.
Notes to Consolidated Unaudited
Financial Information - (continued)
Note 2. Use of Non-GAAP Financial
Measures - (continued)
Reconciliation of Adjusted EBITDA to Net Income
(millions)
Fourth Quarter Ended
Fiscal Year Ended
July 26,
2014
July 27,
2013
July 26,
2014
July 27,
2013
Adjusted EBITDA $ 84.2 $ 126.3 $ 438.4 $ 495.8
Acquisition-related, integration and restructuring costs (9.1 )
(14.5 ) (34.0 ) (34.6 )
Non-cash inventory expense associated with
the purchase
accounting write-up of inventory to fair
market value
— — — (19.9 ) Depreciation and amortization expense (52.6 ) (53.5 )
(193.6 ) (176.0 )
Operating income 22.5 58.3 210.8 265.3
Interest expense (1.7 ) (1.3 ) (6.5 ) (13.8 ) Interest and
other (expense) income, net 0.4 (0.2 ) (0.8 ) 0.4 Loss on
extinguishment of debt — — — (9.3 )
Income from continuing operations
before provision for
income taxes
21.2 56.8 203.5 242.6 Provision for income taxes from continuing
operations (5.3 ) (18.5 ) (65.3 ) (87.4 )
Income from continuing
operations 15.9 38.3 138.2 155.2 Loss from discontinued
operations, net of taxes (0.2 ) (8.5 ) (4.8 ) (3.9 )
Net
income $ 15.7 $ 29.8 $ 133.4 $ 151.3
Ascena Retail Group, Inc.
Supplemental Fact Sheet Fleet Summary
Fiscal 2014 Justice
Lane Bryant
maurices
dressbarn
Catherines
ascena Store count 997 771 922 820 386
3,896 Real estate mix: Strip 224 393 519 595 325
2,056 Mall(a) 672 264 360 56 58
1,410 Outlet 101 114
43 169 3
430 Average selling square feet per store
3,300 4,200 4,300 6,100 3,300
4,300 Sales per selling square
foot $ 371 $ 261 $ 232 $ 191 $ 212
$ 251 Average new
store investment(b) ($000) $ 331 $ 339 $ 250 $ 352 N/A(c)
$
318 Brand P&L Summary Fiscal 2014
Justice Lane Bryant
maurices dressbarn
Catherines ascena
Net Sales ($M) $ 1,384 $ 1,080
$ 971 $ 1,022 $ 332
$ 4,791 Total Consolidated Comp % (3.9 %) 3.2 % 1.1 %
(0.8 %) 7.7 %
0.2 % Brick and Mortar (6.0 %) (0.3 %)
(0.8 %) (1.4 %) 5.5 %
(1.9 %) Ecommerce 21.9 % 23.0 %
25.1 % 14.0 % 24.6 %
22.3 % Ecommerce
Penetration 8.9 % 16.6 % 8.1 % 4.2 % 13.1 %
9.7 %
Gross Margin ($M) $ 756 $ 592 $ 535 $ 577 $ 200
$
2,660 % Net Sales 54.6 % 54.8 % 55.1 % 56.4 % 60.1 %
55.5 % Adjusted Operating Income
($M)(d) $ 103 ($3 ) $
89 $ 39 $ 25 $ 253
% Net Sales 7.4 % (0.2 %) 9.2 % 3.9 % 7.3 %
5.3
% Adjusted EBITDA ($M)(e) $
160 $ 41 $ 125 $
80 $ 32 $ 438 % Net Sales 11.6 %
3.8 % 12.9 % 7.8 % 9.6 %
9.2 % % Growth vs. LY (32.9
%) 42.3 % (9.4 %) 16.4 % 51.5 %
(11.6 %)
(a) Mall stores include both Mall and Lifestyle Centers.
(b) Net of allowances and includes inventory. (c)
Catherines did not open any new stores in FY 2014
(d)
Fiscal 2014 financial information is presented on an
adjusted Non-GAAP basis. The Company’s financial results for Fiscal
2014 on a GAAP basis reflect certain acquisition-related,
integration and restructuring costs of $34 million and accelerated
depreciation of certain assets that were displaced by the Company’s
supply chain and technology integration efforts. Management
believes that all such costs are not indicative of the Company’s
underlying operating performance. As such, adjusted results for
Fiscal 2014, which exclude the effect of such costs, have been
presented to supplement the reported results for each period.
Fiscal 2014
Total Justice Lane Bryant
maurices dressbarn Catherines Unallocated ascena
Reported basis –
Operating income (loss)
$ 99 $ (4 ) $ 86 $ 39 $ 25 $ (34 ) $ 211
Adjustments:
Acquisition related
integration and
restructuring costs
- - - - - 34 34
Accelerated depreciation
related to integration
4 1 3 - - - 8
Adjusted basis –
Operating income (loss)
$ 103 $ (3 ) $ 89 $ 39 $ 25 $ - $ 253
(e)
We present the financial performance measure of earnings
before interest, taxes, depreciation and amortization, as adjusted
("Adjusted EBITDA") to exclude the non-operating related items
discussed above, as well as extinguishments of debt and other
income and expenses classified outside of operating income. These
measures may not be directly comparable to similar measures used by
other companies and should not be considered a substitute for
performance measures in accordance with GAAP such as operating
income and net income reported herein.
Ascena Retail Group, Inc.Investor Relations551-777-6895orICR,
Inc.James Palczynski, 203-682-8229Partnerjp@icrinc.com
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