Ascena Retail Group Inc., owner of Ann Taylor, Loft, Lane Bryant, Dressbarn and the tween brand Justice, among other brands, Tuesday reported sagging traffic and sales in the third quarter and lowered its full-year outlook.
Net same-store sales fell 4% in the quarter due in part to a cold spring, Ascena said; excluding Justice, which is in the midst of a turnaround, overall same-store sales in the quarter fell 2%. Store traffic fell “significantly mid quarter," down 9%, the company said.
Profit was $15 million in the quarter, down from $24 million a year earlier. Third quarter revenue increased 45% to $1.67 billion thanks to the company’s acquisition of Ann Inc, but below analysts' expectations for $1.73 billion in revenue.
Ascena CEO David Jaffe Tuesday put the company’s results in the best possible light, saying that despite challenges from the weather its various brands were able to maintain good control of inventories (even though sometimes the weather necessitated discounts).
“After the disruption of a warm holiday season, we’ve had to contend with an unseasonably cold spring,” Jaffe said.
He also said the company has retained consulting firm Accenture to refocus the company in light of Amazon’s emerging prowess in the apparel business, the resilience of off-price retailers like TJX Cos., and other factors.
These are all obstacles facing retailers this year, as many have shown with disappointing earnings reports recently. Retailers are looking for ways to attract customers to stores while still integrating their online and offline channels for a seamless shopping experience. For Ascena, this means bringing on Accenture to help.
“Where we are going through with Accenture is really trying to deconstruct all the influences on our business and the industry and see how we should change our model again to serve our customers and client the way she wants to be served,” he said on a conference call with analysts.
That could include exploring expanding its e-commerce and a contemplation of wholesale; the idea is to answer the question “What’s next?”
“[T]he Accenture project is really trying to understand where we can invest and try and create opportunities to serve our customer better,” he said on the call with analysts.