Ascena Retail Group (NASDAQ: ASNA) on Monday came out with a narrower-than-expected quarterly loss. The Company reported it lost USD 0.26 a share, compared with consensus estimates of USD 0.37 a share. Revenue fell short of expectations, however. The American retailer posted sales of USD 1.27 Billion, compared to analysts’ average estimate of USD 1.43 Billion. Comparable store sales were flat overall for the period ended May 4.
Ascena’s business has been heavily weighed down by its Value Fashion segment which has “consistently underperformed and generated substantial losses” over the past couple years. In response, the Company this year decided to ditch the category all together. Ascena completed the sale of its Marices brand in March and last month announced the wind down of all 650 Dressbarn stores.
“While we continue our portfolio assessment, we are focused on right sizing our corporate overhead structure to support a business with fewer, stronger brands that can deliver growth and profitability levels above the industry average," said Carrie Teffner, Interim Executive Chair of Ascena. The Company’s Premium Fashion segment, which includes Ann Taylor and LOFT, grew 5% this quarter.
In quarter 4 of fiscal 2019, Ascena said revenue should fall between USD 1.175 to USD 1.215 Billion. Same-store-sales are expected to drop 3% to 5%.
Shares of Ascena have lost 75% over the past 12 months versus competitors Victoria’s Secret parent, Company L Brands Inc. (NYSE: LB), down 39%, and Ross Stores Inc. (NASDAQ: ROST), up nearly 15%.