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Ascena Retail (ASNA) Shares Crater 33% After Cutting Guidance
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In after-hours trading Wednesday, shares of Ascena Retail Group are cratering, down over 33% to $1.88 per share after the company slashed its guidance for its fiscal third quarter and full-year 2017.
Ascena, which owns brand Ann Taylor, LOFT, and Lou & Grey, among others, now expects comparable sales to decline 8% during the third quarter, with non-GAAP EPS in the range of 4 cents to 6 cents per share. Previous guidance was 7 cents to 12 cents per share.
For full-year 2017, the retailer expects comps to be down between 6%-7%, with earnings per share in the range of 10 cents and 15 cents, much lower than Ascena’s previous forecast of 37 cents to 42 cents per share.
“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. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period,” said David Jaffe, President and CEO.
“The specialty retail sector is in a period of unprecedented secular change that is disruptive to traditional business models, and we believe operating conditions in our sector are likely to remain challenging for the next 12 to 24 months,” he continued.
Ascena has been one of the many retailers affected by declining brick-and-mortar sales, and especially the rise of Amazon (AMZN - Free Report) and online shopping.
Currently, ASNA is a #3 (Hold) on the Zacks Rank, with a VGM score of ‘A.’ Ascena is expected to report its next quarterly earnings on May 30.
Interested in the retail sector? Check out Zacks Shopping for Stocks, a retail-focused podcast that tackles the latest breaking news in this changing industry.
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Ascena Retail (ASNA) Shares Crater 33% After Cutting Guidance
In after-hours trading Wednesday, shares of Ascena Retail Group are cratering, down over 33% to $1.88 per share after the company slashed its guidance for its fiscal third quarter and full-year 2017.
Ascena, which owns brand Ann Taylor, LOFT, and Lou & Grey, among others, now expects comparable sales to decline 8% during the third quarter, with non-GAAP EPS in the range of 4 cents to 6 cents per share. Previous guidance was 7 cents to 12 cents per share.
For full-year 2017, the retailer expects comps to be down between 6%-7%, with earnings per share in the range of 10 cents and 15 cents, much lower than Ascena’s previous forecast of 37 cents to 42 cents per share.
“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. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period,” said David Jaffe, President and CEO.
“The specialty retail sector is in a period of unprecedented secular change that is disruptive to traditional business models, and we believe operating conditions in our sector are likely to remain challenging for the next 12 to 24 months,” he continued.
Ascena has been one of the many retailers affected by declining brick-and-mortar sales, and especially the rise of Amazon (AMZN - Free Report) and online shopping.
Currently, ASNA is a #3 (Hold) on the Zacks Rank, with a VGM score of ‘A.’ Ascena is expected to report its next quarterly earnings on May 30.
Interested in the retail sector? Check out Zacks Shopping for Stocks, a retail-focused podcast that tackles the latest breaking news in this changing industry.
Stocks that Aren't in the News…Yet
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street.
They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015, with a stellar average gain of +26% per year. See these high-potential stocks now>>