During what proved to be a difficult quarter for the specialty retail environment, Ascena Retail Group (NASDAQ:ASNA) reported a 1 percent drop in sales from last year to $1.2 billion, with comparable store sales down 4 percent. However, the biggest winner of the quarter was e-commerce, up 13 percent. E-commerce now accounts for 10 percent of the company's overall sales.
David Jaffe, president and CEO at Ascena, explained in a quarterly conference call with analysts that tough trends in the tween market affected sales at the Justice brand, down 10 percent. Justice, like traditional teen apparel brands such as Abercrombie & Fitch, has been struggling to gain a piece of the market share as fast-fashion retailers such as Forever 21, Zara and H&M gain a larger portion.
Negative comp totals also plagued women's wear brand Lane Bryant, down 2 percent, which were caused by poor inventory execution. Ascena acquired Lane Bryant in 2012 and launched the brand's Isabel Toledo T-shirt line last year in an attempt to woo younger consumers.
And while comps were flat at Dressbarn, Maurices' comps were up 1 percent, and Catherines comps were up 6 percent.
Jaffe also spoke of the company's aggressive, multi-year investment in its omnichannel platform's buildout as it endeavors to create "a much more compelling and seamless consumer experience across channels."
"Despite mixed results across our portfolio and continuing soft traffic patterns, fourth quarter EPS was in line with our expectations," Jaffe said. "We have yet to see sustained evidence of market improvement, and as a result, are maintaining a conservative outlook as we enter the fall season. We continue to focus on controlling what we can control—refining our merchandising execution, maintaining focus on inventory levels and expense management, developing an integrated e-commerce platform for our customers, and driving efficiency improvements through our strategic investments."
-See this Seeking Alpha transcript
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