Holiday pressure on for Maurices and other Ascena brands
The holidays can be a stressful time, especially if you’re a national retailer facing continued sales declines and are really hoping for a boost during the busiest shopping season of the year.
Ascena Retail Group expects to lose money over the holiday quarter, however, so that leaves its brands, including Duluth-based Maurices, with low expectations to exceed.
Gary Muto, president of Ascena Brands, struck a stern tone as he addressed investors Monday, saying there is no room for error during the holiday quarter that began for Ascena on Oct. 29.
“We’re not in an environment where we can tolerate execution-related issues,” he said.
He still shared some optimism for Ascena’s ongoing restructuring and digital strategies across its nearly 4,800 stores, about 1,000 of which are Maurices locations.
“Fortunately our digital presence is strong,” Muto said of Maurices. “We are also increasing local market outreach.”
Sales dropped again for Maurices in its first fiscal quarter, August through October, as the women’s apparel retailer brought in $265.9 million in sales, down 5 percent from the same quarter in 2016.
“While we still don’t have the business where we want it, performance improved sequentially from the 10 percent drop we experienced this past summer,” Maurices CEO George Goldfarb said in a statement. “We are starting to see momentum from the new strategies we executed along with our refined fall assortment and look forward to returning the business to growth in 2018.”
Ascena CEO David Jaffe said in a news release there were “fashion missteps” that led to a disappointing quarter of the kind the company hopes to move away from.
“Our liquidity position remains strong, and we have the needed financial flexibility to complete the remaining components of our transformation program, which will see the company emerge as a much more agile, capable competitor,” Jaffe said.
Ascena Retail Group squeaked out a $6.6 million profit, or $0.03 per share, on sales of $1.5 billion in its first quarter of fiscal 2018. For its second quarter, which runs through January, Ascena said it expects an adjusted loss per share of $0.07 to $0.12 and a drop in sales of 4 to 6 percent.
The company released earnings after the markets closed Monday, with Ascena ending trading at $2.61 per share. The stock has traded as high as $8.19 and as low as $1.65 in the past year.