What happened

Shares of Ascena Retail Group (NASDAQ:ASNA) have plunged today, down by 29% as of 11:40 a.m. EDT, after the company updated its guidance for the fiscal third quarter and full fiscal year.

So what

The company, which operates chains like Ann Taylor, LOFT, and Justice, among others, said that it expects comparable-store sales in the third quarter to fall 8%, and should generate non-GAAP EPS of $0.04 to $0.06. In March, Ascena expected third-quarter non-GAAP EPS to be in the range of $0.07 to $0.12. Ascena also expects to recognize a material non-cash impairment charge to goodwill and intangible assets in the quarter, and is still determining how large the charge will be.

Women shopping for clothes at a retail store

Image source: Getty Images.

Now what

In a statement, CEO David Jaffe said, "Industry-wide traffic headwinds and a highly elevated promotional environment have persisted at levels significantly above our expectations, resulting in a miss to our third quarter sales and earnings outlook." Jaffe also said that the specialty retail sector is undergoing "unprecedented secular change that is disruptive to traditional business models," and expects challenges to persist for the next one to two years.

For fiscal 2017, comparable-store sales are expected to fall 6% to 7%, and non-GAAP EPS should be in the range of $0.10 to $0.15, also down significantly from the prior outlook of $0.37 to $0.42 per share in adjusted profit.

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.