Why Is Ascena Retail (ASNA) Soaring 21% Today?

On Friday, shares of Ascena Retail Group Inc. (NASDAQ:ASNA) are soaring, up around 21% in midday trading after the retailer reported first quarter fiscal 2017 results yesterday after the bell.

Ascena reported non-GAAP earnings per share of 18 cents (excluding 11 cents from non-recurring items), with revenues coming in at $1.678 billion and increasing 0.4% year-over-year. However, both the top and bottom line missed the Zacks Consensus Estimate.

Total comparable sales decreased 5% during the quarter, while gross margin increased to $1.014 billion, or 60.4% of sales.

David Jaffe, President and Chief Executive Officer commented, "I’m pleased that our efforts delivered first quarter non-GAAP earnings in the middle of our guidance range. We reacted decisively to unfavorable selling trends in September through more aggressive, but targeted and effective promotional activity. We also reduced operating costs and planned capital expenditures that will benefit full year earnings and free cash flow."

Looking ahead to its second quarter, Ascena expects non-GAAP EPS to fall in the range of a loss of 5 cents to flat (Excluding restructuring, acquisition and integration related expenses, and non-cash ANN purchase accounting adjustments). The retailer continues to forecast full year fiscal 2017 non-GAAP EPS in the range of 60 cents to 65 cents.

Ascena is home to retail brands Ann Taylor, LOFT, Maurice’s, Dressbarn, Lane Bryant, Catherine’s, and Justice.

ASNA is currently a #4 (Sell) on the Zacks Rank, with a VGM score of ‘A.’

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