Ascena Retail Group Beats Up on Analysts Yet Again

Ascena Retail Group (Nasdaq: ASNA  ) reported earnings on March 4. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 26 (Q2), Ascena Retail Group met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share shrank significantly.

Gross margins increased, operating margins dropped, net margins dropped.

Revenue details
Ascena Retail Group chalked up revenue of $1.24 billion. The seven analysts polled by S&P Capital IQ expected to see revenue of $1.23 billion on the same basis. GAAP reported sales were 44% higher than the prior-year quarter's $862.0 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 averaged $0.23 per share. Non-GAAP EPS of $0.26 for Q2 were 37% lower than the prior-year quarter's $0.41 per share. GAAP EPS of $0.29 for Q2 were 29% lower than the prior-year quarter's $0.41 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 53.5%, much better than the prior-year quarter. Operating margin was 6.1%, 550 basis points worse than the prior-year quarter. Net margin was 3.8%, 360 basis points worse than the prior-year quarter.

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 $4.77 billion. The average EPS estimate is $1.24.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 240 members out of 268 rating the stock outperform, and 28 members rating it underperform. Among 81 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 77 give Ascena Retail Group a green thumbs-up, and four 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 $22.00.

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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 of Motley 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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