Dress Barn, Inc.

Dress Barn, Inc. (DBRN), the women's clothing retailer, recently reaffirmed fiscal 2009 guidance during an extremely tough retail environment. The company has surprised on estimates 3 out of the last 4 quarters. DBRN trades at 12.5x forward estimates.

Company Description

Dress Barn sells women's apparel in 46 states through Dressbarn and Maurice stores. The company operates 834 Dressbarn stores and 697 Maurice stores nationwide.

Dress Barn Reaffirmed Fiscal 2009 Guidance

The economic conditions have been especially tough on the retail sector but on Feb 18, Dress Barn reaffirmed fiscal 2009 guidance of earnings per share in the range of 70 cents to 85 cents per share.

Mixed Results in the Second Quarter of 2009

Dress Barn reported second quarter earnings for the fiscal second quarter ending Jan 24, 2009 on Feb 18 and saw net sales fall 1% to $343.2 million from $345.6 million in the year ago period. Comparable store sales fell 4%.

The results were more mixed when you compare the company's two divisions. Dressbarn stores struggled, as net sales fell 4% in the quarter. Maurice stores, however, saw an increase of 4% to $146.7 million from $141.5 million in the year ago period.

The company did post a loss in the quarter of 2 cents per share, which missed analysts' estimates of a penny.

"During this challenging Holiday season, we believe that our strategy of using aggressive promotions helped to both drive customer traffic and clear out seasonal inventory," said David Jaffe, President and CEO.

"While this negatively impacted our merchandise margins, we are pleased with our transition into Spring and to note that our level of clearance inventory is now well below last year," he added.

2009 Consensus Estimates Rise

Fiscal 2009 consensus estimates rose 1 cent in the last 30 days to 77 cents which is in the middle of the company's guidance range.

Value Fundamentals

Dress Barn is a Zacks #1 rank (strong buy) company. It has a forward P/E of 12.48. Its price-to-book is 1.16. The company also has a solid 5-year average return on equity (ROE) of 16.29%.

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