DBRN The Dress Barn, Inc. (MM)

Dress Barn, Inc. (NASDAQ: DBRN) today reported sales and earnings results for the fourth quarter and fiscal year ended July 26, 2008. Fiscal Fourth Quarter Results Net sales for the fiscal fourth quarter ended July 26, 2008 were $382.3 million, compared with net sales of $379.9 million for the fiscal fourth quarter ended July 28, 2007. Comparable store sales for the quarter declined 2% versus the prior year�s increase of 5%. By division, net sales at dressbarn stores were $238.5 million compared with net sales of $251.0 million in the fourth quarter of fiscal 2007. Comparable store sales for the quarter declined 5%, compared to the prior year�s 1% increase. Net sales at maurices stores were $143.8 million compared with net sales of $128.9 million in the fourth quarter of fiscal 2007. Comparable store sales for the quarter increased 4% on top of the prior year�s 13% increase. Net earnings for the fiscal fourth quarter were $22.1 million, or $0.34 per diluted share. This compares to record net earnings of $33.6 million, or $0.48 per diluted share for the comparable period of fiscal 2007. 2008 Fiscal Year Results Net sales for the fiscal year ended July 26, 2008 were $1.444 billion, compared with net sales of $1.427 billion for the fiscal year ended July 28, 2007. Comparable store sales declined 3% versus the prior year�s increase of 5%. By division, net sales at dressbarn stores were $887.6 million compared with net sales of $934.8 million for fiscal 2007. Comparable store sales declined 7% versus the prior year�s increase of 4%. Net sales at maurices stores were $556.6 million compared with net sales of $491.8 million for fiscal 2007. Comparable store sales increased 4% on top of last year�s increase of 7%. Net earnings for fiscal 2008 were $74.1 million, or $1.15 per diluted share. This compares to record net earnings of $101.2 million, or $1.45 per diluted share for fiscal 2007. Commentary David R. Jaffe, President and Chief Executive Officer stated, �Our full year results certainly show the impact of what has been a very challenging retail environment. While we have not been able to avoid the pressures of the marketplace, we have managed the business prudently and made a number of improvements to our operations and created a leaner, more responsive business model. At the store level, we have successfully implemented significant inventory controls to reduce our exposure to markdowns. We have also been vigilant with regard to expenses, investing only in those areas where we see a clear return on investment.� Mr. Jaffe continued, �Our dressbarn stores business has shown recent improvement due to improved execution, trend-right merchandise assortment, and effective marketing programs that reinforce our value message to consumers. With our most difficult comparisons behind us, we believe that our Company can perform well even in view of our expectation for a continued challenging environment. At maurices stores, while the start to the back to school season has been softer than anticipated, we believe that maurices is appropriately positioned given the current difficult environment.� Mr. Jaffe concluded, �Our Company continues to generate good levels of cash flow ending the fiscal year with approximately $278 million of cash and investments. As we look forward, we believe that we can effectively leverage our strong financial position to our strategic advantage, particularly as we open new locations and update our store base with targeted remodels. While we continue to plan our business prudently and carefully manage our expenses and inventory, we believe that we have the ability to respond quickly and effectively to any improvements in market conditions and to flow incremental benefits to our bottom line.� Fiscal July 2009 Guidance The Company�s guidance for earnings per diluted share for fiscal 2009 is in the range of $1.23 to $1.28, based on approximately 67.5 million fully diluted shares outstanding and is reflective of the Company�s current business outlook. This earnings per share estimate is based upon various assumptions, including estimated comparable store sales growth in the low single digits for the year. The Company plans to open 100 stores and close 30 stores, ending fiscal 2009 with approximately 1,575 stores in operation. Capital expenditures are estimated at $70 million. Conference Call Information The Company will conduct a conference call today, September 17, 2008 at 4:30 PM Eastern Time to review its fiscal fourth quarter and year end financial results followed by a question and answer session. Parties interested in participating in this call should dial in at (617) 597-5362 five minutes prior to the start time, the passcode is 81104575. The call will also be simultaneously broadcast at www.dressbarn.com. A recording of the call will be available shortly after its conclusion and until October 17, 2008 by dialing (617) 801-6888, the passcode is 14532793. ABOUT DRESS BARN, INC. Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty apparel retailer offering quality casual and career fashion apparel through its dressbarn and maurices brands. As of July 26, 2008, the Company operated 826 dressbarn stores in 46 states and 677 maurices stores in 44 states. For more information, please visit www.dressbarn.com and www.maurices.com. 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 on our most recent report on Form 10-K for the year ended July 28, 2007 and Form 10-Q for the quarter ended April 26, 2008. Dress Barn, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings- Unaudited Amounts in thousands, except per share amounts � � � � Thirteen Weeks Ended July 26, July 28, 2008 2007 � Net sales $ 382,303 100.0 % $ 379,902 100.0 % Cost of sales, including occupancy and buying costs � 231,309 � 60.5 % � 216,010 � 56.9 % Gross profit 150,994 39.5 % 163,892 43.1 % Selling, general and administrative expenses 101,854 26.6 % 100,130 26.4 % Depreciation and amortization � 12,474 � 3.3 % � 11,935 � 3.1 % Operating income 36,666 9.6 % 51,827 13.6 % � Interest income 1,826 0.5 % 2,637 0.7 % Interest expense (1,192 ) -0.3 % (1,152 ) -0.3 % Other (expense) income � (671 ) -0.2 % � 371 � 0.1 % Earnings before income taxes 36,629 9.6 % 53,683 14.1 % Income taxes � 14,515 � 3.8 % � 20,054 � 5.3 % Net earnings $ 22,114 � 5.8 % $ 33,629 � 8.9 % � Earnings per share: Basic $ 0.37 � $ 0.54 � Diluted $ 0.34 � $ 0.48 � � Weighted average shares outstanding: Basic � 60,175 � � 62,370 � Diluted � 64,495 � � 70,027 � Dress Barn, Inc. and Subsidiaries Condensed Consolidated Statements of Earnings- Unaudited Amounts in thousands, except per share amounts � � � � Fifty-Two Weeks Ended July 26, July 28, 2008 2007 � Net sales $ 1,444,165 100.0 % $ 1,426,607 100.0 % Cost of sales, including occupancy and buying costs � 885,927 � 61.3 % � 842,192 � 59.0 % Gross profit 558,238 38.7 % 584,415 41.0 % Selling, general and administrative expenses 397,424 27.5 % 383,652 26.9 % Depreciation and amortization � 48,200 � 3.3 % � 45,791 � 3.2 % Operating income 112,614 7.8 % 154,972 10.9 % � Interest income 7,817 0.5 % 7,051 0.5 % Interest expense (4,825 ) -0.3 % (4,883 ) -0.3 % Other income � 512 � 0.0 % � 1,382 � 0.1 % Earnings before income taxes 116,118 8.0 % 158,522 11.1 % Income taxes � 42,030 � 2.9 % � 57,340 � 4.0 % Net earnings $ 74,088 � 5.1 % $ 101,182 � 7.1 % � Earnings per share: Basic $ 1.23 � $ 1.63 � Diluted $ 1.15 � $ 1.45 � � Weighted average shares outstanding: Basic � 60,102 � � 62,020 � Diluted � 64,467 � � 70,022 � Dress Barn, Inc. and Subsidiaries Condensed Consolidated Balance Sheets- Unaudited Amounts in thousands � July 26, � July 28, ASSETS 2008 2007 Current Assets: Cash and cash equivalents $127,226 $67,133 Marketable security investments 92,697 177,446 Merchandise inventories 186,983 197,143 Deferred income tax asset - 4,242 Prepaid expenses and other 24,882 17,831 Total Current Assets 431,788 463,795 � Property, Plant and Equipment 525,605 485,203 Less accumulated depreciation and amortization 251,326 228,749 Property, Plant and Equipment, net 274,279 256,454 � Intangible Assets, net 107,802 108,932 Goodwill 130,656 130,656 Marketable Security Investments 58,404 - Other Assets 21,530 21,488 TOTAL ASSETS $1,024,459 $981,325 � LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable � trade $121,084 $133,802 Accrued salaries, wages and related expenses 27,934 30,062 Other accrued expenses 50,970 60,009 Customer credits 14,822 15,141 Income taxes payable - 4,238 Deferred income tax liability 401 - Current portion of long-term debt 116,277 116,211 Total Current Liabilities 331,488 359,463 � Long-Term Debt 27,263 28,540 Deferred Rent and Lease Incentives 62,003 53,356 Deferred Compensation and Other Long Term Liabilities 44,391 25,862 Deferred Income Tax Liability 3,232 4,703 Total Liabilities 468,377 471,924 Shareholders' Equity 556,082 509,401 TOTAL LIABILITIES AND SHAREHOLDERS� EQUITY $1,024,459 $981,325