Earlier this month, Ascena (Nasdaq: ASNA) announced its fiscal fourth-quarter and full-year results. The company reported a drop in quarterly earnings, hurt mainly by one-time charges, and its shares fell more than 3%. But is this the real picture of Ascena? Let's find out.

The financial performance
For the fourth quarter, net income dropped 33% from a year ago, mostly because of a one-time charge related to the company's merger with clothing store brand Justice, which took place in November 2009. On an adjusted basis, net income actually increased by 13% to $38.5 million. The adjusted figure excludes the merger-associated costs, start-up expenses to expand its operations in Canada, costs relating to extinguishment of debt, and other related adjustments. It also removes the effect of an extra week in last year's quarter.

Ascena saw an increase in comparable store sales and strong e-commerce sales growth. The increase in comparable store sales came from all three of its brands, including dressbarn, maurices, and Justice, but Justice saw the biggest jump at 14%. The operating performance for all three brands also showed improvement, and the company reined in costs by keeping operating expenses fixed across a larger sales base.

Plans in the pipeline
Ascena has excellent growth plans for the coming fiscal year. It expects to open 125 to 135 new stores while closing between 30 and 35 stores, resulting in a total store count of about 2,600. The company is pursuing organic growth and is also looking for complementary acquisitions. Having repaid all its debt during the year, Ascena has a clean balance sheet that should help the company support its growth plans.

When you compare Ascena to competitors such as Coldwater Creek (Nasdaq: CWTR) and Talbots (NYSE: TLB), Ascena is handling the tough economy well. Both Coldwater Creek and Talbots have seen a plunge in their revenues, whereas Ascena is doing relatively well.

The Foolish bottom line
Despite the recent drop in its stock price, investors should be fairly happy with Ascena. It's performing well and has plans to grow further. In addition, it has a strong balance sheet with no debt, which will act as a catalyst in the growth strategy of the company. I don't mind keeping an eye on this stock.