Ascena Retail Group Inc. (ASNA) Thursday reported a lower profit for the third quarter, as its bottom line was impacted by costs related to Charming Shoppes acquisition. Meanwhile, revenues for the quarter grew on strong same-store and new store sales.
The New York-based Ascena's net income for the third quarter dropped to $49.4 million or $0.31 per share from $51.8 million or $0.32 per share last year.
For the quarter, Ascena incurred a charge of $0.03 per share related to the pending acquisition of Charming Shoppes.
On average, ten analysts polled by Thomson Reuters expected earnings of $0.36 per share for the third quarter. Analysts' estimates typically exclude special items.
Early this month, Ascena agreed to buy Charming Shoppes, the owner of Lane Bryant brand, for $890 million in cash.
The women's clothing retailer said its net sales for the quarter grew 8 percent to $783.3 million from $722.8 million last year. Analysts estimated revenues of $786.70 million for the quarter.
Sales growth was driven mainly by a 5 percent increase in same-store sales, and as well on strong growth in sales from new stores and e-commerce.
Gross margins for the quarter dropped to 43.4 percent from 44.0 percent last year. Operating margins declined to 10.9 percent from 12.0 percent last year, hurt by increased promotional markdowns as well as higher selling and general expenses.
Chief Executive David Jaffe said, "Our overall financial performance in the quarter was in-line with expectations and reflects the continued challenging marketplace for retailers and consumers. Our ability to perform well despite these pressures validates the strength of our product, the loyalty of our customers and our strategy to build a compelling, diversified business."
Moving ahead, Ascena reaffirmed its earnings guidance for the fiscal year ending July 2012 in the range of $1.37 to $1.40 per share. The guidance excludes Charming Shoppes acquisition, which is expected to close by mid-June.
Analysts currently expect earnings of $1.39 per share for the fiscal year 2012.
ASNA closed Thursday's trading at $18.93, down $0.59 or 3.02%, on a volume of 3.2 million shares on the Nasdaq.
| || |
| To receive FREE breaking news email alerts for Ascena Retail Group, Inc. and others in your portfolio|
by RTT Staff Writer
For comments and feedback: email@example.com