Income from continuing operations for the second quarter of fiscal 2015 ended January 24, 2015 at garment marketer, Ascena Retail Group, Inc. nosedived when compared with the year ago quarter.
“Income from continuing operations for the second quarter of fiscal 2015 was knocked down to $8.7 million as against $32.4 million in the prior year’s second quarter,” Ascena said in a press release.
On an adjusted basis, income from continuing operations for the reporting quarter was also down massively to $12.2 million, as compared to $38.6 million in the same quarter of fiscal 2014.
The apparel marketer reported earnings for the second quarter of fiscal 2015 from continuing operations of $0.05 per diluted share, down from $0.19 per diluted share in the year earlier quarter.
Net sales for the quarter under review rose marginally by 1.7 per cent to $1.289 billion as against $1.267 billion in the second quarter of fiscal 2014.
Ascena attributed the same to new store growth at Justice and maurices and positive combined comparable sales at Lane Bryant, maurices, dressbarn and Catherines.
Gross margin in the reporting quarter stood at $662 million or 51.4 per cent of sales, flat when expressed in terms of dollars but down from the prior year rate of 52.3 per cent of sales.
“The decrease in the gross margin rate was caused by significantly higher markdowns at Justice to clear seasonal inventory,” the marketer said.
“Excluding Justice, we saw gross margin rate improvement across all of our other brands, with the largest increase coming at dressbarn,” it added.
Buying, distribution and occupancy (“BD&O”) expenses for the second quarter of fiscal 2015 were $216.4 million or 16.8 per cent of sales from $210.5 million or 16.6 per cent of sales in the second quarter of last fiscal.
“The expense increase primarily reflects the impact of new store growth at Justice and maurices, along with increased merchandising and design capability at maurices and dressbarn,” it explained.
Operating income for the second quarter of fiscal 2015 fell steeply to $16.6 million or 1.3 per cent of sales, compared to $49.0 million or 3.9 per cent of sales from the fiscal 2014 second quarter.
On an adjusted basis, operating income was $22.0 million or 1.7 per cent of sales as against $59.0 million, or 4.7 per cent of second quarter sales last fiscal.
The effective tax rate too rose massively to 42.0 per cent for the three months ended January 24, 2015 from 30.9 per cent for the three months ended January 25, 2014.
