Suffern, NY—Shares of Ascena Retail Group surged nearly 5% today after the company, parent of dressbarn, reported a 50% jump in its second quarter earnings on higher sales.
For the quarter ended Jan. 28, Ascena said its net income reached $63.7 million, or 81 cents a share, compared to $42.5 million, or 52 cents a share, in a prior year period. Analysts’ average estimate expected 67 cents a share.
Total revenue rose 15% to $752.1 million. “This increase was primarily due to an 8% increase in comparable store sales, strong growth in sales from new stores and e-commerce, and a $6 million increase in revenues” from gift cards, the company said.
“We are pleased to have continued to see positive acceptance for our merchandise assortments and a generally strong performance in a tough market environment,” said David Jaffe, president/ceo. “We are successfully utilizing a variety of strategies to highlight the strength of our fashion position and value we provide to drive increases in our market share.
‘Well Positioned for Spring and Summer’
“With this growth, we are working more efficiently while maintaining an intense focus on both our gross margin and our on-going expense controls. We believe we are well positioned for the spring and summer seasons in each of our concepts,” Jaffe added.
By division, dressbarn posted an 8% increase its comparable store sales, maurices was up 3% and Justice was up 12%. The biggest sales gains were online: e-commerce sales jumped 61% to $52 million.
Thanks to its strong second quarter sales, Ascena increased its full year earnings outlook to $2.75 to $2.80 a share, up from its previous forecast for $2.60 to $2.70. That’s ahead of analysts’ average estimate for $2.66 a share.
“We believe that Ascena’s sharp focus on defensible market opportunities, integrated shared services model, and operational momentum make it one of the most attractive specialty retailers,” said Edward Yruma, analyst at Keybanc Capital Markets.
Ascena Retail Group said it plans to open about 85 stores and close around 20 other locations. For its 2012 fiscal year, the company plans to open 145 stores and close 55, to end the year with about 2,600 locations.
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