ASNA - Ascena Retail Group, Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
0.5099
+0.1060 (+26.24%)
At close: 4:00PM EDT

0.4650 -0.04 (-8.81%)
After hours: 7:59PM EDT

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Previous Close0.4039
Open0.4211
Bid0.4751 x 1200
Ask0.4800 x 3000
Day's Range0.4006 - 0.5099
52 Week Range0.2000 - 4.6600
Volume8,206,129
Avg. Volume3,878,501
Market Cap101.596M
Beta (3Y Monthly)0.77
PE Ratio (TTM)N/A
EPS (TTM)-3.3490
Earnings DateDec 9, 2019 - Dec 13, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est1.00
Trade prices are not sourced from all markets
  • Moody's

    Ascena Retail Group, Inc. -- Moody's downgrades Ascena's CFR to Caa2; negative outlook

    The downgrades reflect Moody's view that Ascena's capital structure is likely unsustainable as a result of its weak operating performance, high leverage, and negative free cash flow, creating an elevated risk of a debt restructuring including a material debt repurchase at a significant discount. Ascena's Caa2 CFR reflects the company's elevated probability of debt restructuring as a result of its high leverage, low interest coverage, and negative free cash flow.

  • Celebrating Everyday Heroes: ascena Foundation Announces Winners of the 2019 Roslyn S. Jaffe Awards
    PR Newswire

    Celebrating Everyday Heroes: ascena Foundation Announces Winners of the 2019 Roslyn S. Jaffe Awards

    MAHWAH, N.J., Oct. 8, 2019 /PRNewswire/ -- ascena Foundation is proud to announce the 2019 winners of the Roslyn S. Jaffe Awards. The program, now proudly in its sixth year, aims to bolster and provide financial support to grassroots organizations who are making a meaningful difference in the lives of women and children, specifically in the areas of health, education, social reform and self-esteem.

  • Thomson Reuters StreetEvents

    Edited Transcript of ASNA earnings conference call or presentation 3-Oct-19 8:30pm GMT

    Q4 2019 Ascena Retail Group Inc Earnings Call

  • MarketWatch

    'Bankruptcy of Ascena is not one of the options being evaluated,' says interim chair

    Ascena Retail Group Inc.'s Interim Executive Chair Carrie Teffner used the fiscal fourth-quarter earnings call to reaffirm that the company won't be filing Chapter 11 like so many other retailers recently. "The company continues to consider options to optimize its balance sheet and liquidity from a position of strength," she said on the call, according to a FactSet transcript. "[T]o be clear and for the avoidance of doubt, bankruptcy of Ascena is not one of the options being evaluated." Ascena is in the process of winding down its Dressbarn business, which should see all of its stores closed in December. And Ascena has divested the Maurices business, a $300 million deal with OpCapita LLP announced in March. Remaining Ascena brands include Ann Taylor and Lane Bryant. "We have a portfolio of strong brands, three of which individually generate revenue of approximately $1 billion or more," Teffner said. Ascena reported reported a quarterly loss, revenue that was slightly down from last year and flat same-store sales. Ascena stock has lost more than 92% of its value over the last year. The stock was trading at 32 cents Friday afternoon. The S&P 500 index is up 1.5% in the last 12 months.

  • Ann Taylor Is Part of a Failed Retail Experiment
    Bloomberg

    Ann Taylor Is Part of a Failed Retail Experiment

    (Bloomberg Opinion) -- Ascena Retail Group Inc.’s gloomy quarterly results are a reminder not just of why the giant chain feels such enormous pressure to change. They also show the challenges retailers face when they try to create a whole greater than the sum of its parts. The retailer, the corporate parent of chains such as Lane Bryant and Ann Taylor, said Thursday its gross margin slipped to 54.3% from 58.1% a year earlier as it increased discounts and promotions to clear inventory. Comparable sales sank 2% from a year earlier for its chains excluding Dressbarn, which is in the process of shuttering all of its 616 stores.The weakness emphasizes why the company has already been undergoing a dramatic overhaul: In addition to winding down Dressbarn by the end of the year, it has sold Maurices, a 943-store chain. And it could rip up its empire even further, as Bloomberg News has reported that it is considering a divestiture of plus-size chains Catherines and Lane Bryant.Slicing up a specialty retailer is certainly in vogue right now: Gap Inc. is soon to split in two, and J. Crew is to spin off its Madewell chain. But Ascena is different because it’s an apparel conglomerate that was bolted together only four years ago.When Ascena acquired Ann Inc., the company that included Ann Taylor and Loft, executives promised many benefits. Ascena had been growing via acquisition for about a decade by then, and the idea was that it knew how take advantage of efficiencies (centralizing back-office functions, for example, or stuffing several brands into one e-commerce distribution center).But whatever Ascena has done on that front, it is hard to argue that it is now a healthier retailer. The company has had five consecutive years of losses as it has struggled to offer the right clothing selection, relied heavily on discounting and maintained stores in less-than-ideal locations.Ascena, after having paid about $2 billion for Ann, now has a market capitalization of about $61 million. There are Manhattan penthouses worth as much this chain of more than 3,400 stores. It had been clear for some time that the Ann acquisition was not shaping up to be a boon for Ascena. My colleague Tara Lachapelle noted as far back as 2017 – when the deal forced the company to take a significant charge – that the Ann deal was adding to the company’s problems.Now, if Ascena ends up unloading Catherines and Lane Bryant, what will remain is just the old Ann Inc. plus children’s retailer Justice. The deal will have proved to be a nearly pointless exercise. More important, its failure would call into question the company’s strategy over a much longer period.Stacey Widlitz, president of SW Retail Advisors, points out that Ascena’s diversification plan ultimately left it fighting three distinct battles on what are arguably the toughest fronts in retail: The value apparel category, where Target Corp. and Old Navy dominate; the teen category, where online shopping has been especially disruptive; and mid-priced apparel, where almost no retailers are prospering right now.Maybe it’s for the best, then, that longtime CEO David Jaffe and CFO Robb Giammatteo have each departed those roles in recent months.Can new leadership revitalize the company? It’s doubtful. Ann Taylor and Loft have performed relatively well lately, and they are positioned to pick up market share that department stores are shedding. But those chains are putting too much effort toward growing their outlet businesses online, which will cheapen the brands over the long term and potentially hurt margins.Whatever happens with those chains now, one thing is abundantly clear: Ascena’s experiment has not worked out as planned.  To contact the author of this story: Sarah Halzack at shalzack@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • MarketWatch

    Ann Taylor parent Ascena swings to quarterly loss

    Ascena Retail Group Inc. stock fell more than 12% in the extended session Thursday after the parent of Ann Taylor and other apparel brands swung to a loss in the fiscal fourth quarter and sales were flat. Ascena said it lost $358 million, or $2.12 a share, in the quarter, versus a profit of $33 million, or 8 cents a share, in the year-ago quarter. Revenue stayed at $1.5 billion. Same-store sales were also flat, Ascena said. Dress Barn's store closings and wind-down is "progressing well and on track" for December, Ascena said. One analyst covering the stock expected a GAAP loss of $1.20 a share on sales of $1.2 billion, according to FactSet. Shares of Ascena ended the regular trading day up 13%. The shares recouped some losses as the after-hours session progressed, and were recently down 6%.

  • Globenewswire Test

    ascena retail group, inc. Announces Fourth Quarter Fiscal 2019 Results; Exceeds Guidance on Sales and Adjusted Operating Income

    Reports Loss per Share From Continuing Operations of $2.12; Adjusted Loss per Share From Continuing Operations of $0.13 MAHWAH, N.J., Oct. 03, 2019 (GLOBE NEWSWIRE) -- ascena retail group, inc. (Nasdaq - ASNA) (“ascena” or the “Company”) today reported financial results for its fiscal fourth quarter and year ended August 3, 2019.Fourth Quarter Highlights: * Comparable sales were flat; * Operating loss was $354 million, which primarily reflects non-cash impairments of goodwill and intangible assets recorded in Fiscal 2019, as well as restructuring costs; adjusted operating income, excluding the non-cash impairment charges and other items as detailed in Note 2, was $16 million; * Divestiture of maurices completed; * Dressbarn wind down progressing well and on track to complete store closures in December 2019; * Returned to normalized inventory levels, well positioned for holiday season; * Cash and revolver availability of $725 million; compliant with all covenants; and * Two new independent members appointed to the Board of Directors to expand expertise.Carrie Teffner, Interim Executive Chair of ascena, commented, “We made pivotal changes in the back half of Fiscal 2019 as we exited our Value Fashion segment to focus on our brands where we see the biggest profitability potential. Our Board and executive team continue to actively assess the portfolio as we remain laser focused on our key objective of returning to sustainable growth, improving operating margins and optimizing our capital structure as we remain committed to enhancing shareholder value.”Gary Muto, Chief Executive Officer of ascena, commented, "We were pleased to have exceeded our adjusted operating income expectations for the fourth quarter through better than expected comparable sales results and lower operating expenses. In addition, we ended the quarter with a strong cash and liquidity position with no borrowings under our credit facility."Mr. Muto continued, "Looking ahead, by shifting our focus to our brands and right-sizing our cost structure, we plan to capitalize on the meaningful and differentiated presence our brands have in the marketplace. We are evolving our merchandising strategy to incorporate greater versatility in our assortment while maintaining flexibility to keep pace with her changing desires in order to deepen loyalty with existing customers, reengage lapsed customers and attract new customers. In addition, we are taking steps to enhance our cash position over the course of Fiscal 2020 through a combination of cost saving initiatives, rationalization of our capital expenditures and disciplined working capital management. We are excited by the opportunities that lie ahead as we position ourselves to deliver long term profitable growth and enhance shareholder value.”Fiscal Fourth Quarter Results - Consolidated Overview Current and prior year results include items that the Company does not believe reflect the fundamental performance of its business. The following commentary reflects results from the Company's continuing operations that exclude its maurices brand, which has been classified as a discontinued operation. More information is provided in the Notes to the unaudited condensed consolidated financial information, which is included herein on pages 11 through 16.Net sales and comparable sales Net sales for the fourth quarter of Fiscal 2019 were $1,454 million compared to $1,520 million in the year-ago period. Net sales primarily reflect flat comparable sales for the quarter and the unfavorable impact resulting from the 53rd week recorded in the prior fiscal year.The Company's comparable and net sales data are summarized below:    Net Sales (millions)   Comparable Sales Three Months Ended    August 3, 2019 August 4, 2018  Ann Taylor—% $190.5  $193.9   LOFT2% 440.2  426.5   Premium Fashion1% 630.7  620.4           Lane Bryant(3)% 265.7  294.5   Catherines(8)% 72.1  88.0   Plus Fashion(4)% 337.8  382.5           Justice(5)% 259.0  277.5   Kids Fashion(5)% 259.0  277.5           Dressbarn12% 226.7  239.1   Value Fashion12% 226.7  239.1           Total Company—% $1,454.2  $1,519.5  Excluding Dressbarn, the Company's comparable sales for the fourth quarter of Fiscal 2019 was (2)%.Gross margin Gross margin decreased to $789 million, or 54.3% of sales, for the fourth quarter of Fiscal 2019, compared to $882 million, or 58.1% of sales in the year-ago period. The decline in gross margin rate from the fourth quarter last year was primarily due to higher promotional activity to address elevated inventory levels.Buying, distribution, and occupancy expenses Buying, distribution, and occupancy (“BD&O”) expenses for the fourth quarter of Fiscal 2019 decreased to $275 million, which represented 18.9% of sales, compared to $291 million, or 19.2% of sales in the year-ago period. In terms of dollars, the reduction in expenses was driven by lower occupancy expenses resulting primarily from the fleet optimization program and lower buying expenses reflecting lower compensation-related costs.Selling, general, and administration expenses Selling, general, and administrative (“SG&A”) expenses for the fourth quarter of Fiscal 2019 decreased 8% to $421 million, or 28.9% of sales, compared to $459 million, or 30.2% of sales in the year-ago period. The decrease in SG&A expenses was primarily due to lower store expenses resulting from the fleet optimization program, savings from the cost reduction initiatives, mainly reflecting headcount and non-merchandise procurement savings, and the favorable impact resulting from the 53rd week recorded in the prior fiscal year. These items were partially offset by inflationary increases and a non-cash write-off of corporate-related fixed assets.Operating results Operating loss for the fourth quarter of Fiscal 2019 was $354 million compared to operating income of $32 million in the year-ago period, and primarily reflects non-cash impairments of goodwill and intangible assets recorded in Fiscal 2019, the gross margin rate declines discussed above, and higher restructuring costs. Excluding the non-cash impairment charges and other items as detailed in Note 2, operating income for the quarter was $16 million.Provision for income taxes from continuing operations For the fourth quarter of Fiscal 2019, the Company recorded a tax expense of $29 million on a pre-tax loss of $379 million. The effective tax rate of (7.7)% was lower than the statutory tax rate primarily due to non-deductible impairments of goodwill, a partial federal valuation allowance, and the impact of GILTI.Net loss and Loss per diluted share The Company reported a Net loss from continuing operations of $420 million, or $2.12 per diluted share in the fourth quarter of Fiscal 2019, compared to Net income from continuing operations of $16 million, or $0.08 per diluted share, in the year-ago period. Excluding the non-cash impairment charges and other items as detailed in Note 2, the net loss from continuing operations for the quarter would have been $25 million, or $0.13 per share.Fiscal Fourth Quarter Balance Sheet HighlightsCash and cash equivalents The Company ended the fourth quarter of Fiscal 2019 with Cash and cash equivalents of $328 million.Inventories The Company ended the fourth quarter of Fiscal 2019 with inventory of $548 million, up 2% from the year-ago period. The Company took meaningful steps in the fourth quarter to bring inventories back in line while improving quality and composition.Capital expenditures Capital expenditures totaled $32 million in the fourth quarter of Fiscal 2019, primarily to support new capabilities and strategic initiatives.Debt The Company ended the fourth quarter of Fiscal 2019 with total debt of $1,372 million, which represents the balance remaining on the term loan. There were no borrowings outstanding under the Company's revolving credit facility at the end of the fourth quarter of Fiscal 2019 and the Company had $397 million of borrowing availability under its revolving credit facility. The Company is not required to make its next quarterly term loan payment of $22.5 million until November of calendar 2020.Board of Directors AppointmentsAscena’s Board of Directors appointed two new independent directors, Gary Begeman and Paul Keglevic. Mr. Begeman has served as General Counsel of NII Holdings for several years and previously held senior positions at Sprint and Nextel Communications. He has also served as a non-executive director of a number of privately-owned companies. Mr. Keglevic has served as Chief Executive Officer, as well as Chief Restructuring Officer of Energy Future Holdings. He has also served as Executive Vice President, Chief Financial Officer and Chief Risk Officer at TXU Corporation. Both Gary and Paul bring significant financial and operational expertise with long track records of helping companies enhance value for stakeholders.First Quarter and Full Year Fiscal Year 2020 OutlookDue to volatility expected in total consolidated results related to the ongoing wind-down of its Dressbarn brand, the Company is providing guidance for the first quarter of Fiscal 2020 for the consolidated continuing operations of the Premium Fashion, Plus Fashion, and Kids Fashion segments as follows:\- Net sales of $1.100 to $1.125 billion; \- Comparable sales of negative low single digits; \- Gross margin rate of 59.3% to 59.8%; \- Depreciation and amortization of approximately $61 million; and \- Adjusted operating income of $15 million to $35 million.In addition, for the full year, total capital spending is expected to be between $80 million and $100 million, which represents a significant decrease compared to prior years.Real EstateThe Company's store information on a brand-by-brand basis for the fourth quarter is as follows: Quarter Ended August 3, 2019  Store Locations Beginning of Q4Store Locations OpenedStore Locations ClosedStore Locations End of Q4 Justice831—(5)826 Lane Bryant731—(10)721 LOFT6701(2)669 Dressbarn661—(45)616 Catherines332—(12)320 Ann Taylor294—(1)293 Total3,5191(75)3,445 The above table excludes store count related to maurices, which was sold early in the fourth quarter of Fiscal 2019.Conference Call InformationThe Company will conduct a conference call today, October 3, 2019, at 4:30 PM Eastern Time to review its fourth quarter and full year Fiscal 2019 results, followed by a question and answer session. Parties interested in participating in this call should dial in at (877) 407-3982 prior to the start time, the conference ID is 13694543. The call will also be simultaneously broadcast at www.ascenaretail.com. A recording of the call will be available shortly after its conclusion and until October 17, 2019 by dialing (844) 512-2921, the conference ID is 13694543, and until November 3, 2019 via the Company’s website at www.ascenaretail.com.Non-GAAP Financial ResultsAs noted above, the comparability of the Company's operational results for the periods presented herein has been affected by certain transactions. The Company believes that non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance, trends and period-over-period comparative results. Non-GAAP measures eliminate amounts that do not reflect the fundamental performance of the Company’s businesses. These items include costs such as (i) impairments of goodwill and other intangible assets, (ii) costs associated with the wind down of its Dressbarn operations, (iii) restructuring, tangible asset impairments and other related charges including, but not limited to, charges incurred under the Company's cost reduction initiatives, and (iv) the impact of adopting the Tax Reform Act of 2017. Additionally, the GAAP results for Fiscal 2018 reflect an additional week that was recorded by the Premium Fashion segment during the second quarter and the other segments during the fourth quarter. Reference is made to Notes 1 and 2 of the unaudited condensed consolidated financial information included herein for more information and a complete listing of such adjustments.Many investors also use non-GAAP measures as a common basis for comparing the performance of different companies. A general limitation of non-GAAP measures is that they are not prepared in accordance with U.S. generally accepted accounting principles and may not be comparable to similarly titled measures of other companies due to differences in methods of calculation and excluded items. Non-GAAP measures should be considered in addition to, not as a substitute for, the Company’s Operating income and Net income per common share, as well as other measures of financial performance and liquidity reported in accordance with U.S. generally accepted accounting principles.Additionally, a reconciliation of the projected non-GAAP operating income, which is a forward-looking non-GAAP financial measure, to operating income, the most directly comparable GAAP financial measure, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as restructuring charges, costs associated with the wind down of Dressbarn, and the tax effect of all such items. As previously stated, the Company has historically excluded these items from non-GAAP financial measures. The Company currently expects to continue to exclude such items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments are inherently unpredictable as to if or when they may occur. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.Forward-Looking StatementsCertain statements made within this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Forward-looking statements are statements related to future, not past, events, and often contain words such as “expect,” "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," “estimate,” “forecast,” "target," “preliminary,” or “range,” and include, without limitation, the Company’s outlook for the first quarter and full year of Fiscal 2020, and risks associated with the ability to achieve a successful outcome for its portfolio brands and to otherwise achieve its business strategies. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that its projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is readily available in the Company’s most recent Annual Report on Form 10-K.About ascena retail group, inc.ascena retail group, inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). ascena retail group, inc. through its retail brands operates ecommerce websites and approximately 3,400 stores throughout the United States, Canada and Puerto Rico.For more information about ascena retail group, inc. visit: ascenaretail.com, AnnTaylor.com, factory.anntaylor.com, LOFT.com, outlet.loft.com, louandgrey.com, lanebryant.com, Catherines.com, Dressbarn.com, and shopjustice.com.CONTACT:For investors:For media:  ICR, Inc.ascena retail group, inc.  Jean FontanaShawn Buchanan  Managing DirectorCorporate Communications  (646) 277-1214(212) 541-3418  Jean.Fontana@icrinc.com shawn_buchanan@anninc.com       Jessica Schmidt   Senior Vice President   (646) 677-1806   Jessica.Schmidt@icrinc.com   ascena retail group, inc. Condensed Consolidated Statements of Operations (Unaudited) (millions, except per share data) Three Months Ended  August 3, 2019 % of Net Sales August 4, 2018 % of Net Sales Net sales$1,454.2  100.0% $1,519.5  100.0% Cost of goods sold(665.0) (45.7)% (637.2) (41.9)% Gross margin789.2  54.3% 882.3  58.1% Other costs and expenses:        Buying, distribution and occupancy expenses(275.4) (18.9)% (291.3) (19.2)% Selling, general and administrative expenses(420.5) (28.9)% (458.6) (30.2)% Restructuring and other related charges(98.6) (6.8)% (17.7) (1.2)% Impairment of goodwill(160.9) (11.1)% —  —% Impairment of other intangible assets(109.9) (7.6)% —  —% Depreciation and amortization expense(77.7) (5.3)% (82.7) (5.4)% Operating (loss) income(353.8) (24.3)% 32.0  2.1% Interest expense(26.9) (1.8)% (30.8) (2.0)% Interest income and other income, net1.5  0.1% 0.3  —% Loss on extinguishment of debt—  —% (5.0) (0.3)% Loss from continuing operations before (provision) benefit for income taxes(379.2) (26.1)% (3.5) (0.2)% (Provision) benefit for income taxes from continuing operations(29.2) (2.0)% 19.3  1.3% Loss from equity method investment(11.8) (0.8)% —  —% (Loss) income from continuing operations(420.2) (28.9)% 15.8  1.0% Discontinued operations        Income from discontinued operations, net of tax17.7  1.2% 17.4  1.1% Gain on disposal of discontinued operations, net of taxes44.5  3.1% —    Net (loss) income$(358.0) (24.6)% $33.2  2.2%          Net (loss) income per common share - basic:        Continuing operations$(2.12)   $0.08    Discontinued operations0.31    0.09    Total net (loss) income per basic common share$(1.81)   $0.17             Net (loss) income per common share - diluted:        Continuing operations$(2.12)   $0.08    Discontinued operations0.31    0.09    Total net (loss) income per diluted common share$(1.81)   $0.17             Weighted average common shares outstanding:        Basic198.0    196.3    Diluted198.0    199.2    See accompanying notes. ascena retail group, inc. Condensed Consolidated Statements of Operations (Unaudited) (millions, except per share data) Twelve Months Ended  August 3, 2019 % of Net Sales August 4, 2018 % of Net Sales Net sales$5,493.4  100.0% $5,566.4  100.0% Cost of goods sold(2,432.1) (44.3)% (2,334.1) (41.9)% Gross margin3,061.3  55.7% 3,232.3  58.1% Other costs and expenses:        Buying, distribution and occupancy expenses(1,120.5) (20.4)% (1,149.5) (20.7)% Selling, general and administrative expenses(1,783.7) (32.5)% (1,766.2) (31.7)% Restructuring and other related charges(127.7) (2.3)% (76.6) (1.4)% Impairment of goodwill(276.0) (5.0)% —  —% Impairment of intangible assets(134.9) (2.5)% —  —% Acquisition and integration expenses—  —% (5.4) (0.1)% Depreciation and amortization expense(299.9) (5.5)% (323.5) (5.8)% Operating loss(681.4) (12.4)% (88.9) (1.6)% Interest expense(107.0) (1.9)% (113.0) (2.0)% Interest and other income, net3.4  0.1% 1.6  —% Loss on extinguishment of debt—  —% (5.0) (0.1)% Loss from continuing operations before benefit for income taxes(785.0) (14.3)% (205.3) (3.7)% Benefit for income taxes from continuing operations14.5  0.3% 62.3  1.1% Loss from equity method investment(11.8) (0.2)% —  —% Loss from continuing operations(782.3) (14.2)% (143.0) (2.6)% Discontinued operations        Income from discontinued operations, net of taxes76.4  1.4% 103.3  1.9% Gain on disposal of discontinued operations, net of taxes44.5  0.8% —  —% Net loss$(661.4) (12.0)% $(39.7) (0.7)%          Net (loss) income per common share - basic:        Continuing operations$(3.96)   $(0.73)   Discontinued operations0.61    0.53    Total net loss per basic common share$(3.35)   $(0.20)            Net (loss) income per common share - diluted:        Continuing operations$(3.96)   $(0.73)   Discontinued operations0.61    0.53    Total net loss per diluted common share$(3.35)   $(0.20)            Weighted average common shares outstanding:        Basic197.5    196.0    Diluted197.5    196.0    See accompanying notes. ascena retail group, inc. Condensed Consolidated Balance Sheets (Unaudited) (millions)     August 3, 2019 August 4, 2018 ASSETS    Current assets:    Cash and cash equivalents$328.0  $231.0  Inventories547.7  535.1  Prepaid expenses and other current assets279.3  229.4  Assets related to discontinued operations—  401.3  Total current assets1,155.0  1,396.8  Property and equipment, net847.0  1,106.8  Goodwill313.5  589.5  Other intangible assets, net276.6  427.0  Non-current investments42.1  —  Other assets65.6  50.4  Total assets$2,699.8  $3,570.5       LIABILITIES AND EQUITY    Current liabilities:    Accounts payable$336.0  $394.7  Accrued expenses and other current liabilities333.9  304.0  Deferred income128.3  108.4  Liabilities related to discontinued operations—  166.2  Total current liabilities798.2  973.3  Long-term debt, less current portion1,338.6  1,328.7  Lease-related liabilities234.2  260.8  Deferred income taxes0.6  2.6  Other non-current liabilities177.2  206.6  Total liabilities2,548.8  2,772.0  Equity151.0  798.5  Total liabilities and equity$2,699.8  $3,570.5  See accompanying notes. ascena retail group, inc. Segment Information (Unaudited) (millions) Three Months Ended Twelve Months Ended  August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Net sales (a)(b):        Premium Fashion (c)$630.7  $620.4  $2,415.1  $2,317.8  Plus Fashion337.8  382.5  1,240.5  1,340.0  Kids Fashion259.0  277.5  1,079.1  1,100.0  Value Fashion226.7  239.1  758.7  808.6  Total net sales$1,454.2  $1,519.5  $5,493.4  $5,566.4   Three Months Ended Twelve Months Ended  August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Operating (loss) income (a)(b):        Premium Fashion (c)$28.1  $52.6  $72.7  $102.3  Plus Fashion (d)1.6  5.9  (71.4) 0.6  Kids Fashion(16.3) (1.5) (42.4) 18.7  Value Fashion (e)2.2  (7.3) (101.7) (128.5) Unallocated restructuring and other related charges(98.6) (17.7) (127.7) (76.6) Unallocated impairment of goodwill (f)(160.9) —  (276.0) —  Unallocated impairment of other intangible assets (f)(109.9) —  (134.9) —  Unallocated acquisition and integration expenses—  —  —  (5.4) Total operating (loss) income$(353.8) $32.0  $(681.4) $(88.9)  Three Months Ended Twelve Months Ended  August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Non-GAAP adjusted operating income (loss)        Premium Fashion (c)$28.1  $53.4  $72.7  $109.8  Plus Fashion (d)1.6  (0.5) (55.1) (5.8) Kids Fashion(16.3) (18.8) (42.4) 1.4  Value Fashion (e)2.2  (9.7) (84.3) (113.8) Total non-GAAP adjusted operating income (loss)$15.6  $24.4  $(109.1) $(8.4) See accompanying footnotes on the following page.ascena retail group, inc. Segment Information (Unaudited) (millions)Footnotes to segment tables:(a) Current year amounts reflect the impact of adopting the new revenue recognition accounting standard in the first quarter of Fiscal 2019. Prior period amounts have not been restated and continue to be reported under the accounting standards in effect for those periods.(b) The Company's fiscal year ended August 4, 2018 was a 53-week year as the Company conformed to the calendar of the National Retail Federation. The three and twelve months ended August 4, 2018 include the results of the Value Fashion, Plus Fashion and Kids Fashion segments for 14 and 53-weeks, respectively, while the results of the Premium Fashion segment are included for 13 and 53-weeks, respectively. Operating income of $25.3 and $28.1 million from the additional week has been excluded from non-GAAP adjusted operating income for the three and twelve months ended August 4, 2018, respectively. Reference is made to Notes 1 and 2 of the unaudited condensed consolidated financial information included herein for more information and a reconciliation of results on a GAAP basis to a non-GAAP adjusted basis.(c) Operating loss for the twelve months ended August 4, 2018 includes the impact of non-cash expenses of $9.5 million associated with the purchase accounting adjustments of ANN's assets and liabilities to fair market value. Reference is made to Note 2 of the unaudited condensed consolidated financial information included herein for a reconciliation of results on a GAAP basis to a non-GAAP adjusted basis.(d) Operating loss includes the impact of non-cash impairment charge of approximately $16.3 million in the third quarter of Fiscal 2019 to write-down store-related assets at the Plus Fashion segment. Reference is made to Note 2 of the unaudited condensed consolidated financial information included herein for more information and a reconciliation of results on a GAAP basis to a non-GAAP adjusted basis.(e) Operating loss includes the impact of non-cash impairment charge of approximately $17.4 million in the third quarter of Fiscal 2019 and $17.1 million in the third quarter of Fiscal 2018, primarily to write-down store-related assets at Dressbarn. Reference is made to Note 2 of the unaudited condensed consolidated financial information included herein for more information and a reconciliation of results on a GAAP basis to a non-GAAP adjusted basis.(f) Operating loss for the three months ended August 3, 2019 includes the impact of non-cash impairments of goodwill and other intangible assets at the Premium Fashion, Plus Fashion and Kids Fashion segments, which included $160.9 million of goodwill and $109.9 million of other intangible assets. The loss for the twelve months ended August 3, 2019 includes the non-cash impairments of goodwill and other intangible assets previously discussed as well as additional impairments at the Plus Fashion segment in the third quarter of $115.1 million of goodwill and $25.0 million of other intangible assets. Reference is made to Note 2 of the unaudited condensed consolidated financial information included herein for a reconciliation of results on a GAAP basis to a non-GAAP adjusted basis. ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information (millions, except per share data)Note 1. Basis of PresentationFiscal PeriodFiscal year 2019 ended on August 3, 2019 ("Fiscal 2019") and the three and twelve month periods reflect a 13-week and 52-week period, respectively.Fiscal year 2018 ended on August 4, 2018 and was a 53-week period (“Fiscal 2018”) as the Company conformed its fiscal periods to the National Retail Federation calendar. The Company's Value Fashion, Plus Fashion, and Kids Fashion segments recognized the extra week in the fourth quarter of Fiscal 2018, whereas the Company's Premium Fashion segment, which historically has followed the National Retail Federation calendar, recognized their extra week in the second quarter of Fiscal 2018 consistent with other retail companies already on that calendar. As a result, the three and twelve months ended August 4, 2018 include the results of the Value Fashion, Plus Fashion and Kids Fashion segments for 14 and 53-weeks, respectively, while the results of the Premium Fashion segment are included for 13 and 53-weeks, respectively.Discontinued OperationsOn May 6, 2019, the Company completed its previously announced sale of its maurices business. As a result of the transaction, the Company's maurices business has been classified as a component of discontinued operations within the consolidated financial statements for all periods presented.Note 2. Reconciliation of Non-GAAP Financial MeasuresThe comparability of the Company's operational results reported in accordance with U.S. generally accepted accounting principles ("GAAP") for the periods presented herein has been affected by certain transactions. The Company believes that the non-GAAP financial measures presented below, when reviewed in conjunction with GAAP financial measures, can provide more information to assist investors in evaluating current period performance, trends and period-over-period comparative results. Non-GAAP measures eliminate amounts that do not reflect the fundamental performance of the Company’s businesses. These items include costs such as (i) impairments of goodwill and other intangible assets, (ii) costs associated with the wind down of the Dressbarn operations, (iii) restructuring, tangible asset impairments and other related charges including, but not limited to, charges incurred under the Company's cost reduction initiatives, and (iv) the impact of adopting the Tax Reform Act of 2017.  Additionally, the GAAP results for Fiscal 2018 reflect an additional week that was recorded by the Premium Fashion segment during the second quarter and the other segments during the fourth quarter.Many investors also use non-GAAP measures as a common basis for comparing the performance of different companies. A general limitation of non-GAAP measures is that they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to differences in methods of calculation and excluded items. Non-GAAP measures should be considered in addition to, not as a substitute for, the Company’s Operating income and Net income per common share, as well as other measures of financial performance and liquidity reported in accordance with GAAP.The following tables reconcile non-GAAP financial measures to the most directly comparable GAAP financial measures and include Net sales, Gross margin, BD&O expense, SG&A expense, Depreciation and amortization expense, Operating (loss) income, Income tax benefit (provision), Net loss from continuing operations, Diluted net loss per common share from continuing operations and earnings before interest, taxes, depreciation and amortization, as adjusted ("Adjusted EBITDA").ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information - (continued) (millions, except per share data)Note 2. Reconciliation of Non-GAAP Financial Measures (continued)  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Net sales - reported GAAP basis $1,454.2  $1,519.5  $5,493.4  $5,566.4  Impact of non-cash purchase accounting adjustments (a) —  —  —  0.2  Additional week —  (70.2) —  (94.8)           Non-GAAP Net sales $1,454.2  $1,449.3  $5,493.4  $5,471.8              Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Gross Margin - reported GAAP basis $789.2  $882.3  $3,061.3  $3,232.3  Impact of non-cash purchase accounting adjustments (a) —  —  —  0.2  Additional week —  (40.8) —  (52.5)           Non-GAAP Gross Margin $789.2  $841.5  $3,061.3  $3,180.0              Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Buying, distribution & occupancy expense - reported GAAP basis $(275.4) $(291.3) $(1,120.5) $(1,149.5) Impact of non-cash purchase accounting adjustments (a) —  —  —  0.1  Additional week —  2.6  —  3.6            Non-GAAP Buying, distribution & occupancy expense $(275.4) $(288.7) $(1,120.5) $(1,145.8)   Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Selling, general & administrative expense - reported GAAP basis $(420.5) $(458.6) $(1,783.7) $(1,766.2) Impact of non-cash purchase accounting adjustments (a) —  —  —  3.2  Additional week —  12.9  —  20.8  Store-related impairment (b) —  —  16.3  17.1  Charges related to Dressbarn wind down (c) —  —  17.4  —  Non-GAAP Selling, general & administrative expense $(420.5) $(445.7) $(1,750.0) $(1,725.1) ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information - (continued) (millions, except per share data)Note 2. Reconciliation of Non-GAAP Financial Measures (continued)  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Depreciation and amortization expense - reported GAAP basis $(77.7) (82.7) $(299.9) (323.5) Impact of non-cash purchase accounting adjustments (a) —  —  —  6.0            Non-GAAP Depreciation and amortization expense $(77.7) $(82.7) $(299.9) $(317.5)   Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Operating (loss) income - reported GAAP basis $(353.8) 32.0  $(681.4) (88.9) Impact of non-cash purchase accounting adjustments (a) —  —  —  9.5  Store-related impairment (b) —  —  16.3  17.1  Charges related to Dressbarn wind down (c) —  —  17.4  —  Goodwill and other intangible impairments (d) 270.8  —  410.9  —  Acquisition and integration expenses (e) —  —  —  5.4  Restructuring and other related charges (f) 98.6  17.7  127.7  76.6  Additional week —  (25.3) —  (28.1)           Non-GAAP Operating income (loss) $15.6  $24.4  $(109.1) $(8.4)   Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 (Provision) benefit for income taxes from continuing operations - reported GAAP basis (29.2) 19.3  14.5  62.3  Income tax impact of non-GAAP adjustments (g) (53.8) 2.1  (77.0) (24.3) Income tax impact of federal and state tax valuation allowance (h) 79.5  (1.5) 85.9  21.8  Income tax impact of 2017 Tax Reform Act (i) —  (17.7) 7.7  (36.9)           Non-GAAP income tax (provision) benefit from continuing operations $(3.5) $2.2  $31.1  $22.9  ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information - (continued) (millions, except per share data)Note 2. Reconciliation of Non-GAAP Financial Measures (continued)  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 (Loss) income from continuing operations - reported GAAP basis (420.2) 15.8  $(782.3) (143.0) Impact of non-cash purchase accounting adjustments (a) —  —  —  9.5  Store-related asset impairments (b) —  —  16.3  17.1  Charges related to Dressbarn wind down (c) —  —  17.4  —  Goodwill and other intangible impairments (d) 270.8  —  410.9  —  Acquisition and integration expenses (e) —  —  —  5.4  Restructuring and other related charges (f) 98.6  17.7  127.7  76.6  Additional week —  (23.5) —  (26.3) Loss on extinguishment of debt —  5.0  —  5.0  Income tax impact of non-GAAP adjustments (g) (53.8) 2.1  (77.0) (24.3) Income tax impact of federal and state tax valuation allowance (h) 79.5  (1.5) 85.9  21.8  Income tax impact of 2017 Tax Reform Act (i) —  (17.7) 7.7  (36.9)           Non-GAAP net loss from continuing operations $(25.1) $(2.1) $(193.4) $(95.1)             Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Diluted net (loss) income per common share from continuing operations - reported GAAP basis $(2.12) $0.08  $(3.96) $(0.73) Per share impact of non-cash purchase accounting adjustments(a) —  —  —  0.05  Per share impact of store-related impairment (b) —  —  0.08  0.08  Per share impact of charges related to Dressbarn wind down (c) —  —  0.09  —  Per share impact of goodwill and other intangible impairments (d) 1.37  —  2.08  —  Per share impact of Acquisition and integration related expenses (e) —  —  —  0.03  Per share impact of Restructuring and other related charges (f) 0.49  0.09  0.65  0.39  Per share impact of additional week —  (0.12) —  (0.13) Per share impact of Loss from extinguishment of debt —  0.03  —  0.03  Per share income tax impact of non-GAAP adjustments (g) (0.27) 0.01  (0.39) (0.12) Per share income tax impact of federal and state tax valuation allowance (h) 0.40  (0.01) 0.43  0.11  Per share income tax impact of 2017 Tax Reform Act (i) —  (0.09) 0.04  (0.19)           Non-GAAP diluted net loss per common share from continuing operations (j) $(0.13) $(0.01) $(0.98) $(0.48) ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information - (continued) (millions, except per share data)Note 2. Reconciliation of Non-GAAP Financial Measures (continued)  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Adjusted EBITDA $93.3  $107.1  $190.8  $309.1  Impact of non-cash purchase accounting adjustments (a) —  —  —  (3.5) Additional week —  25.3  —  28.1  Store-related asset impairments (b) —  —  (16.3) (17.1) Charges related to Dressbarn wind down (c) —  —  (17.4) —  Goodwill and other intangible impairments (d) (270.8) —  (410.9) —  Acquisition and integration expenses (e) —  —  —  (5.4) Restructuring and other related charges (f) (98.6) (17.7) (127.7) (76.6) Depreciation and amortization expense (77.7) (82.7) (299.9) (323.5) Operating loss (353.8) 32.0  (681.4) (88.9) Interest expense (26.9) (30.8) (107.0) (113.0) Interest income and other income, net 1.5  0.3  3.4  1.6   Loss on extinguishment of debt —  (5.0) —  (5.0) Loss from continuing operations before benefit for income taxes (379.2) (3.5) (785.0) (205.3) (Provision) benefit for income taxes from continuing operations (29.2) 19.3  14.5  62.3  Income from equity method investment, net of taxes (11.8) —  (11.8) —  Loss from continuing operations (420.2) 15.8  (782.3) (143.0) Income from discontinued operations, net of taxes 17.7  17.4  76.4  103.3  Gain on disposal of discontinued operations, net of taxes 44.5  $—  44.5  —  Net loss $(358.0) $33.2  $(661.4) $(39.7) (a) Includes the impact of non-cash expenses associated with the purchase accounting adjustments of ANN's assets and liabilities to fair market value, calculated in accordance with Accounting Standards Codification 805 - Business Combinations, such as adjustments to depreciation and amortization related to the write-up of ANN's customer relationships and property and equipment and other purchase accounting adjustments, which are primarily lease-related. Such costs are unique to each transaction and the nature and amount of such costs vary significantly based on the size and timing of the acquisitions and the maturities of the businesses being acquired. Previous to the third quarter of Fiscal 2018, we had excluded these costs because we believed that the costs were material to investors and that these non-cash adjustments are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisition. During the third quarter of Fiscal 2018, we concluded that such costs were no longer material and, accordingly we are no longer adjusting for these costs beginning with the third quarter of Fiscal 2018. We will continue to present all prior year quarters as previously adjusted as a supplement to the GAAP information. Amounts recorded in the periods presented are as follows:  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Net sales $—  $—  $—  $0.2  Other operating expenses —  —  —  3.3  Depreciation and amortization —  —  —  6.0    $—  $—  $—  $9.5  (b) Operating loss includes the impact of non-cash impairment charges to write-down store-related assets at the Plus Fashion segment in the third quarter of Fiscal 2019 and at the Value Fashion segment in the third quarter of Fiscal 2018. ascena retail group, inc. Notes to Unaudited Condensed Consolidated Financial Information - (continued) (millions, except per share data)Note 2. Reconciliation of Non-GAAP Financial Measures (continued)(c) Operating loss includes costs associated with the wind down of Dressbarn's operations and primarily include a write-down of store-related assets to fair value and professional fees incurred during the third quarter of Fiscal 2019 in connection with the wind down. Wind down charges incurred during the fourth quarter of Fiscal 2019 have been classified within Restructuring and other related charges.(d) Operating loss includes the impact of non-cash impairment charges reflecting a write-down of goodwill and other intangible assets to fair value based on the results of an interim test during the third quarter of Fiscal 2019 and a year-end impairment test in the fourth quarter of Fiscal 2019.(e) Primarily reflects professional fees and other costs related to the acquisition of ANN INC.(f) Reflects (i) severance and professional fees incurred under the Company's Change for Growth program and other cost reduction initiatives in both years, (ii) severance costs and professional fees associated with the wind down of Dressbarn's operations in the fourth quarter of Fiscal 2019, (iii) a non-cash write-down of Dressbarn's corporate headquarters building to fair market value in the fourth quarter of Fiscal 2019, (iv) the write-down of a corporate-owned office building in Duluth, MN to fair market value as a result of the sale of maurices in the fourth quarter of Fiscal 2019, and (v) write-downs of fixed assets resulting from program activities related to the Company's fleet optimization program in Fiscal 2018. Amounts recorded in each period presented are as follows:  Three Months Ended Twelve Months Ended   August 3, 2019 August 4, 2018 August 3, 2019 August 4, 2018 Professional fees and other related charges $10.6  $16.0  $39.3  $59.2  Severance and retention 42.6  (0.7) 43.0  5.7  Impairment of assets 45.4  2.4  45.4  11.7    $98.6  $17.7  $127.7  $76.6  (g) Represents the income tax impact applicable to each non-GAAP adjustment described above.(h) Due to the limitations placed on the use of federal and state income tax net operating losses, the Company established a partial valuation allowance for its federal and state net operating losses during Fiscal 2019 and 2018. Because this expense is significant, and non-cash in nature, the Company has excluded the expense attributable to these valuation allowances from its non-GAAP results.(i) Reflects adjustments made by the Company in adopting the 2017 Tax Reform Act (the "2017 Act") consistent with the relief provided by the SEC in Staff Accounting Bulletin No. 118. Fiscal 2018 reflects the Company's initial assessment of adopting the 2017 Act. The Company completed its assessment during the second quarter of Fiscal 2019 and recorded $2.5 million of additional federal and state transition tax and a $5.2 million valuation allowance resulting from the impact of GILTI on its U.S. federal net operating loss carryforward.(j) Reflects the impact on EPS of using 198.0 and 197.5 million weighted average common shares for both GAAP net loss per diluted common share and adjusted net loss per diluted common share for the three and twelve months ended August 3, 2019, respectively. Also reflects the impact on EPS of using 196.3 and 196.0 million weighted average common shares for both GAAP net loss per diluted common share and adjusted net loss per diluted common share for the three and twelve months ended August 4, 2018, respectively. The number of weighted average basic and diluted common shares for all periods presented are equal as the impact of potentially dilutive stock options and restricted stock units was anti-dilutive under the treasury stock method due to the net loss reported during the period.

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    Bloomberg

    For Clothing Retailers, Breaking Up Is Now Harder to Do

    (Bloomberg Opinion) -- Two big names in clothing retail are getting smaller. Gap Inc. laid out the details last week of its previously announced plan to split into two companies — one that is solely its Old Navy chain, and another for everything else. Meanwhile, J. Crew Group Inc. made it official last week that it plans to spin off its Madewell chain.Both of these splits are the right moves for two apparel businesses that have oddly similar problems: Their newer chains are doing well, but their older ones are struggling.(1) The breakups will allow executives to focus more intently on the troubled brands’ problems.But the plans are still risky, on their own terms and because of larger complications introduced by President Donald Trump’s trade war. The last month or so has amped up enormous tariff-related uncertainty for the apparel industry, as Trump moved to slap levies on $300 billion worth of Chinese goods, only to soon delay some of them. Clothing retailers tend to say they will deal with this situation by negotiating with suppliers. Scale is a huge asset in such negotiations, with the biggest companies having the most leverage. Once the Gap and J. Crew empires split, they will have less muscle to flex in these discussions.A similar dynamic exists with their relationships to their mall landlords. Consider the latest in the saga of another mall heavyweight, Forever 21. My colleagues at Bloomberg News reported this week that the company is holding discussions with Simon Property Group Inc. and Brookfield Property Partners LP about the mall operators buying a stake in the clothing chain as part of a potential bankruptcy filing. It would be similar to when landlords stepped in to save teen clothing chain Aeropostale; the landlords apparently decided owning a piece of an ailing retail chain was preferable to being stuck with a raft of vacancies.Several retail giants have filed for bankruptcy since that 2016 Aeropostale deal without mall operators intervening. But Forever 21 might be different, in part because of its scale: With more than 800 stores, landlords may believe that it is, to steal a popular phrase from another industry, too big to fail. A question for Gap and J. Crew is whether their splits leave them too small to matter.Of course, some of J. Crew and Gap’s peers are also slimming down, meaning they might be dealing with similar hurdles. Ascena Retail Group Inc. has sold its Maurice’s chain and is shuttering Dressbarn;  Bloomberg News reported Thursday it is now considering unloading its Catherines and Lane Bryant brands. L Brands Inc. has closed its small Henri Bendel chain and sold La Senza – tiny parts of its business, to be sure. But it continues to face questions from investors about whether it should separate Victoria’s Secret and Bath & Body Works, a move that would greatly change its scale. Overall, the benefits of a sharper focus (and, in J. Crew’s case, the ability to use IPO proceeds to pay down some debt) will probably make these separations worthwhile. But even the best breakups are challenging — and the uncertain trade and mall retail environments are likely to make them even more so.(1) Old Navy's comparable sales have slipped in the two most recent quarters, but it has been the crown jewel of the company for years.To contact the author of this story: Sarah Halzack at shalzack@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Ann Taylor Parent Considers Sale of Lane Bryant, Catherines
    Bloomberg

    Ann Taylor Parent Considers Sale of Lane Bryant, Catherines

    (Bloomberg) -- Struggling Ascena Retail Group Inc. is considering the sale of two more of its chains amid mounting losses and signs that creditors are losing confidence in the company’s prospects.Ascena has held discussions about divesting Catherines and Lane Bryant, which specialize in plus-size women’s apparel, according to people with knowledge of the matter. They asked not to be identified because the process isn’t public.Creditors concerned by Ascena’s deteriorating results have hired advisers to address flagging sales and approaching debt maturities, according to other people. A lender group tapped advisory firm Greenhill & Co. to help evaluate potential options, people familiar with the matter said.“It is Ascena Retail Group’s policy not to comment on speculation or rumor,” a spokesman for the Mahwah, New Jersey-based company, said in an email. “The company regularly engages with its lenders.”A sale would mean a significant cut in Ascena’s empire, which now totals about 3,500 stores, and would reverse an acquisition spree that culminated with the 2015 purchase of Ann Taylor and its Loft chain. Lane Bryant operated 731 stores at the end of its third fiscal quarter, and Catherines had 332.U.S. retailers have closed thousands of outlets as consumers do more shopping online and less at brick-and-mortar outlets. Ascena is already in the process of shuttering its Dressbarn chain after failing to find a buyer. That unit operated 661 stores as of May 4. In March, the company said it was selling a majority stake in its Maurices chain to OpCapita for $300 million.Ascena posted losses totaling about $300 million in the first three quarters of its fiscal year, and it hasn’t turned a full-year profit since fiscal 2014. It owes creditors about $1.35 billion. Debtwire earlier reported on the hiring of Greenhill.S&P Global Ratings downgraded Ascena’s credit rating in June to CCC+ from B-, citing the potentially unsustainable debt load.Investor concern is reflected in Ascena’s first-lien secured loans, which are quoted at less than 60 cents on the dollar. The shares, which sold for more than $20 in 2013, now fetch about 30 cents.The company is current on its obligations, is in full compliance with its term loan and revolver, and it intends to remain that way, Ascena’s representative said. There’s also substantial cash on hand, he said.Ascena also operates the Justice teen clothing chain, which it acquired in 2009. That unit operated 831 stores as of May 4.(Updates to add Justice chain in the last paragraph)To contact the reporters on this story: Eliza Ronalds-Hannon in New York at eronaldshann@bloomberg.net;Kiel Porter in Chicago at kporter17@bloomberg.net;Lauren Coleman-Lochner in New York at llochner@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Rick Green, Jonathan RoederFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 6 Retail Stocks on the Verge of Bankruptcy
    InvestorPlace

    6 Retail Stocks on the Verge of Bankruptcy

    Another one bites the dust. In early September, discount retailer Fred's (NASDAQ:FRED) announced that it was filing for Chapter 11 bankruptcy protection and shuttering all of its stores. Fred's joins a long list of retailers that have declared bankruptcy over the past several years as technology has dramatically and irreversibly altered the retail landscape. That list includes once loved retailers like Barneys, Sears and Toys "R" Us, among many, many more.Over the next several years, this list will only get longer. Looking at the retail scene, while the broad outlook for physical and digital retailers remains positive, there are a handful of retailers out there that are only a few quarters away from shuttering their doors.These are retailers that were: 1) slow to adapt to the e-commerce shift, 2) have been losing share and relevance for the past few years, 3) are now operating with depleted resources and simply don't have the financial firepower to make the necessary changes and enhancements to their business to survive, and 4) are holding a huge pile of debt.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September Ultimately, if a retailer checks off those four boxes, then that's probably a retail stock heading for the graveyard -- meaning it's a retail stock you want to sell.With that in mind, let's take a look at six retail stocks to sell on their way to bankruptcy. Retail Stocks to Sell: J.C. Penney (JCP)Source: Supannee_Hickman / Shutterstock.com First up, we have forgotten mall retail giant J.C. Penney (NYSE:JCP).At one point in time, J.C. Penney was at the heart of the American retail landscape, back when consumers did all of their shopping at malls. Times have changed since then. Namely, consumers have migrated to off-mall and online retail channels. J.C. Penney has been slow to adapt to those changes. They didn't build out an e-commerce business as quickly as they needed to. They didn't develop omni-channel capabilities as quickly as they needed to. And, they didn't update their stores or offerings in a way that they needed to.As such, the once all-important mall retail giant has become largely irrelevant with negative comps and falling margins. J.C. Penney will remain irrelevant for the foreseeable future because this company doesn't have enough cash (only $175 million in cash on the balance sheet) nor does the business produce enough cash (negative free cash flow year-to-date) to allow management to invest that much -- if anything -- back into the business.Further complicating things, there's over $5 billion in total debt sitting on the balance sheet. Thus, any cash this company does produce is going to have to go towards paying off debt.There isn't much to like about JCP here. You have a depressed and forgotten retailer with rapidly depleting resources and a bunch of debt -- that combination ultimately implies that bankruptcy is coming soon. Ascena Retail (ASNA)Source: Jer123 / Shutterstock.com Lesser known than J.C. Penney but in just as much financial trouble, women's apparel retailer Ascena Retail (NASDAQ:ASNA) could easily wind up bankrupt within the next few quarters.Ascena is the parent company behind women's apparel brands like Ann Taylor, LOFT, Lou & Grey, Lane Bryant, Catherines and Justice. Those brands simply aren't all that important in the modern women's apparel retail landscape. They aren't very differentiated and they have a ton of competition. As such, it should be no surprise that over the past several years, Ascena's comparable sales and margin trends have been sharply negative.The big problem here -- as is the case with J.C. Penney -- is that this company doesn't have the resources to improve its product portfolio. There is only $100 million in cash on the balance sheet against the backdrop of over $1.3 billion in long-term debt. Further, cash flow is negative year-to-date, comps are still negative and gross margins are still dropping. Thus, this company is not nor does it project to produce sizable cash any time soon. * 7 Stocks to Buy In a Flat Market An inability to produce cash plus over $1.3 billion in leverage equals looming bankruptcy. That's why ASNA stock has been so beaten up, and why it will remain depressed for the foreseeable future. Stage Stores (SSI)Source: WhisperToMe via Wikimedia CommonsAnother department store operator which finds itself on this list of retail stocks on the verge of bankruptcy is Stage Stores (NYSE:SSI).The story at Stage Stores is very similar to the stories at J.C. Penney and Ascena. Broadly speaking, you have a retailer that accumulated a lot of debt to fuel expansion during its growth years. But, e-commerce disruption ended SSI's growth years, and because the company has failed to adapt its operations in a meaningful way to the e-commerce disruption, sales and profit trends have been hugely negative for several years. Now, SSI is left with largely depleted resources (only $25 million in cash), a still big debt load (over $675 million) and very little visibility to produce enough cash to service the debt load.To be sure, comps here are positive -- a rarity on this list -- as Stage Stories is trying to survive by converting its full-price department stores into more popular off-price discount stores. This transition has potential. But, margins are still dropping, EBITDA is still falling and cash flows are still negative. Plus, off-price stores don't always work out, either -- just ask Fred's.Thus, this move may be too little, too late. Ultimately, it does appear that despite this smart off-price pivot, the ultimate outcome here is for Stage Stores to end up in the retail graveyard. Big 5 Sporting Goods (BGFV)Source: Jonathan Weiss / Shutterstock.com The sporting goods sector has had its fair share of bankruptcies over the past several years, and the industry may get another bankruptcy soon with Big 5 Sporting Goods (NASDAQ:BGFV).In the big picture, the sporting goods sector got too big to be sustainable. That is, now that Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN) and Target (NYSE:TGT) all sell a ton of sporting goods equipment, the market doesn't need a dozen sporting goods department stores anymore. It only needs one or two -- meaning that this market is consolidating around a handful of larger players. Big Five simply isn't one of those players, and as such, it's tough to see there being enough room in the market for Big Five to stay around for much longer.The financials here aren't pretty, either. Big Five has a ton of debt -- about $350 million in debt and operating lease liabilities. Meanwhile, there's only $6.6 million in cash on the balance sheet. Cash flows haven't been consistently positive for about a decade, and the outlook remains dim for them to be consistently positive anytime soon. Comps are positive, but gross margins and profits are still dropping as discounting appears to be driving the positive comps. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off There's not much to like here. The sporting goods sector is consolidating, and that consolidation is squeezing out Big 5, who -- with only $6 million in cash left against nearly $350 million in debt -- seems to be on the verge of the bankruptcy. Pier 1 (PIR)Source: Jonathan Weiss / Shutterstock.com Next up, we have struggling furniture retailer Pier 1 (NYSE:PIR), who checks off all the boxes of a retail company on the verge of bankruptcy.Limited resources? Check. Pier 1 only has $30.5 million in cash on the balance sheet. Tons of debt? Check. Against that tiny $30.5 million cash balance, Pier 1 has $950 million in total debt on the balance sheet. Negative sales trends? Check. Comparable sales dropped 13.5% last quarter. Sales dropped 15.5%. Retreating margins? Check. Gross margins dropped over 700 basis points last quarter, and operating losses widened. Negative cash flows? Check. Cash flows have turned sharply negative this year, and there isn't much visibility for them to turn back into positive territory anytime soon, if ever.Zooming out, Pier 1 has struggled as e-furniture retailers like Wayfair (NYSE:W) have jumped onto the scene and stolen market share. The big problem? E-commerce penetration rates in furniture retail are around 13%, versus roughly 30% for apparel and consumer electronics. Thus, the e-commerce disruption problem for Pier 1 will only get bigger and bigger over time. As it does get bigger, things will only get worse. Sales will keep dropping, margins will keep retreating, losses will widen, and eventually, the company simply won't have enough financial firepower to service its near $1 billion in debt.PIR stock may not be around for much longer. Bed Bath & Beyond (BBBY)Source: Jonathan Weiss / Shutterstock.com The story at Bed Bath & Beyond (NASDAQ:BBBY) is very similar to the story at Pier 1.Big picture, both are struggling home goods and furniture retailers which are being squeezed out of the market. When it comes to Bed Bath & Beyond, there are two things at play here. One, the mainstream emergence of e-furniture retailer players like Wayfair has pulled customers away from BBBY stores. Two, the expansion of big box retailers like Amazon, Walmart and Target into the home goods and furniture game has eroded BBBY's differentiation in a very crowded retail marketplace.The result? Many consumers have left Bed Bath & Beyond stores, and unless the company runs huge discounts (which would kill margins and lead to huge losses), those churned customers don't have much reason to go back.That's why comps and sales trends have been, are and will remain negative. Same with margin and profit trends. It doesn't help that cash and cash flows are limited, and that the debt load is enormous.Overall, it seems like Bed Bath & Beyond is doomed for a similar fate as Pier 1.As of this writing, Luke Lango was long TGT and W. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 6 Retail Stocks on the Verge of Bankruptcy appeared first on InvestorPlace.

  • PR Newswire

    S&P Dow Jones Indices Announces Nine Companies Set to Join S&P MidCap 400; Ten Companies to Join S&P SmallCap 600

    NEW YORK , Sept. 6, 2019 /PRNewswire/ -- S&P Dow Jones Indices will make the following index adjustments to the S&P MidCap 400 and S&P SmallCap 600 to ensure each index more appropriately represents its ...

  • Is Tanger Factory Outlet Centers a Buy?
    Motley Fool

    Is Tanger Factory Outlet Centers a Buy?

    With the company's dividend yield hitting 10%, is it time to back up the truck and buy, time to sell, or time to take a wait-and-see approach?

  • GlobeNewswire

    Bragar Eagel & Squire is Investigating Certain Officers and Directors of Ascena Retail Group, A.O. Smith Corporation, and Grubhub and Encourages Investors to Contact the Firm

    Bragar Eagel & Squire is investigating certain officers and directors of Ascena Retail Group, Inc. (ASNA), A.O. Smith Corporation (AOS), and Grubhub, Inc. (GRUB) on behalf of long-term stockholders. Bragar Eagel and Squire is investigating certain officers and directors of Ascena Retail Group, Inc. following a class action complaint that was filed against Ascena on June 7, 2019. In August 2015, Ascena completed the acquisition of Ann Inc. (“Ann”), the parent company of Ann Taylor and LOFT (the “Ann Acquisition”).

  • ACCESSWIRE

    FILING DEADLINE--Kuznicki Law PLLC Announces Class Actions on Behalf of Shareholders of ASNA, GTT and CARB

    CEDARHURST, NY / ACCESSWIRE / August 6, 2019 / The securities litigation law firm of Kuznicki Law PLLC issues the following notice on behalf of shareholders of the following publicly traded companies. Shareholders who purchased shares in these companies during the dates listed below are encouraged to contact the firm regarding possible appointment as lead plaintiff and a preliminary estimate of their recoverable losses. If you wish to choose counsel to represent you and the class, you must apply to be appointed lead plaintiff and be selected by the Court.

  • ACCESSWIRE

    FINAL DEADLINE TODAY: The Schall Law Firm Announces the Filing of a Class Action Lawsuit Against Ascena Retail Group, Inc. and Encourages Investors with Losses to Contact the Firm

    LOS ANGELES, CA / ACCESSWIRE / August 6, 2019 / The Schall Law Firm, a national shareholder rights litigation firm, announces the filing of a class action lawsuit against Ascena Retail Group, Inc. ("Ascena" or "the Company") (NASDAQ:ASNA) for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission. Investors who purchased the Company's shares between September 16, 2015 and June 8, 2017, inclusive (the ''Class Period''), are encouraged to contact the firm before August 6, 2019.

  • ACCESSWIRE

    FINAL DEADLINE ALERT - Ascena Retail Group, Inc. (ASNA) - Bronstein, Gewirtz & Grossman, LLC Reminds Investors of Class Action and Lead Plaintiff Deadline: August 6, 2019

    NEW YORK, NY / ACCESSWIRE / August 6, 2019 / Bronstein, Gewirtz & Grossman, LLC notifies investors that a class action lawsuit has been filed against Ascena Retail Group, Inc. (“Ascena” or the “Company”) (ASNA) and certain of its officers, on behalf of shareholders who purchased or otherwise acquired Ascena securities between September 16, 2015 through June 8, 2017, both dates inclusive. This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.

  • ACCESSWIRE

    FINAL DEADLINE TODAY: Rosen, a Top Ranked Law Firm, Reminds Ascena Retail Group, Inc. Investors of Important August 6th Deadline in Securities Class Action Lawsuit - ASNA

    NEW YORK, NY / ACCESSWIRE / August 6, 2019 / Rosen Law Firm, a global investor rights law firm, reminds purchasers of the securities of Ascena Retail Group, Inc. (NASDAQ:ASNA) from September 16, 2015 through ...

  • GlobeNewswire

    CLASS ACTION UPDATE for STG, ASNA, TEVA and NGHC: Levi & Korsinsky, LLP Reminds Investors of Class Actions on Behalf of Shareholders

    NEW YORK, Aug. 06, 2019 -- Levi & Korsinsky, LLP announces that class action lawsuits have commenced on behalf of shareholders of the following publicly-traded companies..

  • ACCESSWIRE

    The Klein Law Firm Reminds Investors of Class Actions on Behalf of Shareholders of VNTR, ASNA and CARB

    NEW YORK, NY / ACCESSWIRE / August 6, 2019 / The Klein Law Firm announces that class action complaints have been filed on behalf of shareholders of the following companies. If you suffered a loss, you have until the lead plaintiff deadline to request that the court appoint you as lead plaintiff.