Ann Taylor Parent Sinks Most in 22 Months on Doubts About Sales
(Bloomberg) -- Ascena Retail Group Inc., the owner of Ann Taylor and Dressbarn, plunged the most since May 2017 after its third-quarter forecast missed analysts’ estimates and said it’s less confident of future sales.
- The loss per share in the current three-month period will be 35 cents to 45 cents, the company said after the close Thursday. Analysts had projected it would break even. Ascena’s outlook for sales in the quarter also trailed estimates.
- The company singled out its Value unit, which includes Dressbarn and Maurices, as operating at an “unacceptable level of profitability,” and said it took a “step back” at the Plus and Kids divisions. It blamed last quarter’s performance on “macro headwinds” and didn’t give a full-year update, saying it has less visibility on sales trends.
- Analyst Steven Marotta at CL King said the problems are likely not brand specific as all showed “a similarly decelerating dynamic,” while Dana Telsey at Telsey Advisory Group cited difficult traffic trends and an uptake in spring demand that hasn’t yet materialized.
- Like many retailers, Ascena has been forced to shutter underperforming stores as consumer shopping habits change and sales shift online. The company said it closed 110 locations in the quarter.
- The company said it’s taking steps to address its cost structure and focus on brands that can deliver growth. It expects to see $300 million in savings by July as it improves marketing and merchandise planning.
- Shares of Ascena tumbled as much as 30 percent to $1.33 in New York. The company had already slumped 25 percent this year through Thursday’s close, compared with a 12 percent gain in the Standard & Poor’s 500 Index.
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For company statement, click here.
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