The Gory Details on Ascena Retail Group's Double Miss

Seth Jayson, The Motley Fool
Updated

Ascena Retail Group (NAS: ASNA) reported earnings on June 5. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended April 27 (Q3), Ascena Retail Group missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share contracted significantly.


Gross margins grew, operating margins dropped, net margins dropped.

Revenue details
 Ascena Retail Group reported revenue of $1.14 billion. The nine analysts polled by S&P Capital IQ expected to see sales of $1.17 billion on the same basis. GAAP reported sales were 46% higher than the prior-year quarter's $783.3 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.26. The 11 earnings estimates compiled by S&P Capital IQ forecast $0.30 per share. Non-GAAP EPS of $0.26 for Q3 were 24% lower than the prior-year quarter's $0.34 per share. GAAP EPS of $0.19 for Q3 were 39% lower than the prior-year quarter's $0.31 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 57.6%, much better than the prior-year quarter. Operating margin was 6.4%, 460 basis points worse than the prior-year quarter. Net margin was 2.7%, 360 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $1.19 billion. On the bottom line, the average EPS estimate is $0.31.

Next year's average estimate for revenue is $4.73 billion. The average EPS estimate is $1.25.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 236 members out of 264 rating the stock outperform, and 28 members rating it underperform. Among 81 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 76 give Ascena Retail Group a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Ascena Retail Group is outperform, with an average price target of $21.50.

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The article The Gory Details on Ascena Retail Group's Double Miss originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Ascena Retail Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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