FINANCE

Ascena Retail Group Q3 profit down 37% amid charges

BY Marianne Wilson

Suffern, N.Y. — Ascena Retail Group Inc. reported its fiscal third-quarter net income dropped nearly 37% amid costs related to its acquisition of Charming Shoppes and a charge tied to debt extinguishment. The chain also lowered its full-year earnings forecast.

Net income slipped to $31.2 million for the quarter that ended April 27, from $49.4 million in the same quarter a year ago.

Revenue rose nearly 46% to $1.14 billion, boosted by the company’s acquisitions of the Lane Bryant and Catherines chains. Same-store sales fell 4%.

David Jaffe, president and CEO of Ascena Retail Group stated: “Our soft third quarter top line performance reflects lower than expected traffic driven by continued economic challenges for our customers and unseasonably cold weather as well as merchandising misses at Lane Bryant and Dressbarn.”

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OPERATIONS

Lumber Liquidators names HR head

BY Staff Writer

Toano, Va. — Lumber Liquidators, the largest specialty retailer of hardwood flooring in North America, announced the appointment of Sandra C. Whitehouse as senior VP chief human resources officer, effective later this month.

Whitehouse most recently served as chief human resources officer for Earthbound Farm. Previously, she led the human resources department at Orchard Supply Hardware.

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News

Positive performance for Ann brands in Q1

BY CSA STAFF

NEW YORK — Ann Inc. reported total net sales for the quarter of $575 million, a 2.5% increase from $560 million in the first quarter ended May 4.

By brand, net sales across all channels of the Ann Taylor brand totaled $219 million for the quarter, a nearly 4% increase from $212 million in the first quarter of 2012. At the Loft brand, net sales across all channels were $355 million for the quarter, a 2% increase $348 million in the first quarter of 2012.

Total comparable sales for the quarter decreased 0.5% versus the first quarter of 2012. At Ann Taylor, total brand comparable sales increased 2%, reflecting an increase of 6% at Ann Taylor, partially offset by a decrease of 5.8% in the Ann Taylor Factory channel. At Loft, total brand comparable sales decreased 2%, reflecting decreases of 0.9% at Loft and 8% at Loft Outlet.

"As previously noted, our first quarter performance reflected the impact of unseasonably cold weather, which negatively affected sales of warm weather product, primarily at Loft,” said president and CEO Kay Krill. “As a result, we were more promotional than planned to clear through inventory in advance of second quarter deliveries.”

The onset of better weather in May resulted in positive comparable sales performance at both brands and in all channels for the month; therefore, the company feels it is on track to achieve higher profitability and positive comp performance at both brands for the second quarter.

Gross margin, as a percentage of net sales was 56%, versus the 57% gross margin rate achieved in the first quarter of 2012, reflecting an overall increase in merchandise margin rate, offset by the effect of higher shipping costs associated with multichannel sales. The merchandise margin rate improvement reflected stronger performance at Ann Taylor as well as the factory outlet channels for both brands, partially offset by lower performance at Loft, compared with the first quarter of 2012.

During the first quarter of fiscal 2013, the company opened one Ann Taylor store, one Ann Taylor Factory store, nine Loft stores and two Loft Outlet stores, and closed three Ann Taylor stores and five Loft stores.

Ann Inc. is the parent company of Ann Taylor and Loft, two leading women’s specialty retail fashion brands in North America.

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