Disappointing quarter for women’s apparel retailer
Fashion missteps tripped up the parent company of such brands as Ann Taylor, Lane Bryant and Dressbarn in its first quarter.
Ascena Retail Group reported net income of $6.6 million, or 3 cents a share, down from $$14 million in the year-ago period. After adjustments for restructuring costs and other effects, Ascena claimed earnings of 11 cents a share, down from 18 cents a share in the year-ago period.
Net sales totaled $1.59 billion. Total same-store sales fell 5%, which the company attributed primarily to a a mid-single digit decline in average selling price. The three hurricanes, which impacted the southern United States and Puerto, negatively impacted sales by approximately $11 million. Analysts on average expected adjusted earnings of 11 cents a share on net sales of $1.59 billion, according to FactSet.
“Our first quarter adjusted earnings per share of 11 cents was in the middle of our guidance range, but represented a disappointing quarter,” CEO David Jaffe said. We were unable to capitalize on the improving macro traffic environment due to fashion missteps that we cannot afford in today’s environment. We continue to to deliver double-digit transaction growth in our direct channel, but must improve our overall level of merchandising execution.”
Ascena operates some 4,800 stores throughout the United States, Canada and Puerto Rico under a variety of banners, including Ann Taylor, Loft, maurices, Dressbarn, Catherines, and Justice.
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CVS Health agrees to buy Aetna in blockbuster deal
The largest announced corporate acquisition of 2017 also has the potential to reshape the country’s health care industry.
CVS Health has agreed to acquire insurance giant Aetna Corp. for approximately $69 billion. The deal would create a health care giant composed o the nation’s third-largest health insure and a nationwide network of 9,700 retail pharmacies, 1,100-plus walk-in medical clinics and a pharmacy benefits manager with nearly 90 million plan members.
Including CVS’s assumption of Aetna’s debt, the deal will be valued at $77 billion. Once the transaction closes, expected in the second half of 2018, Aetna chairman and CEO Mark Bertolini and three Aetna directors will join the CVS Health board of directors. Aetna will operate as a standalone business unit within the CVS Health enterprise. The deal is subject to regulatory approval.
“This combination brings together the expertise of two great companies to remake the consumer health care experience,” CVS Health president and CEO Larry Merlo said. “With the analytics of Aetna and CVS Health’s human touch, we will create a healthcare platform built around individuals. We look forward to working with the talented people at Aetna to position the combined company as America’s front door to quality health care, integrating more closely the work of doctors, pharmacists, other healthcare professionals and health benefits companies to create a platform that is easier to use and less expensive for consumers.”
The two companies said that the merger offers the potential to change how patients access care at lower cost. CVS Health said the combined company , which would offer CVS Health access to the 44.6 million people Aetna insures, would offer new opportunities to reach patients, turning CVS Pharmacy locations in spaces for wellness, clinical and pharmacy services, as well as vision, hearing, nutrition, beauty and medical equipment in addition to its current offerings.
It also will offer health services at many locations that will turn CVS Pharmacy stores into a hub for answering patient questions about their conditions, prescriptions and coverage. Both companies are also expecting the deal to offer a new approach to treating chronic diseases. The combined company will have access robust data and analytics capabilities that it said could be brought to bear on hospital readmission rates, CVS said.
Loren Trimble, CEO and managing director of AArete, a global consultancy working both with payers and providers as well as pharmacy chains, predicted more deal like this in the future.
“This merger will provide further impetus for the big health insurers to look at pharmacy if they are not already doing so,” said Trimble.
He also said that a combined CVS/Aetna may be able to provide “more personalized care/develop more personalized relationships with members, which can help with innovation in care delivery and may help reduce unnecessary care.”
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