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Ascena Q2 Sales Leaps 44%, Maintains Full Year Guidance (ASNA)

Ascena Retail Group Inc. (NASDAQ: ASNA) reported on Monday that its fiscal second-quarter profits fell as it faced challenging holiday season quarter. Adjusted earnings, however, edged past analysts’ estimation. The Company also reaffirmed its previous earnings guidance, sending shares 16.15% higher in aftermarket trading.

“Our second quarter performance reflects a difficult holiday season during which we utilized promotion and markdown strategies to manage inventory for an effective transition to Spring assortments. We expect the challenging environment to continue and have adjusted our sales, promotion, and inventory plans accordingly,” said David Jaffe, President and Chief Executive Officer of Ascena Retail Group, in a conference call on Monday.

The Suffern, New York-based Company, which owns clothing chains such as the dressbarn, maurices and Justice Brands, reported net income of $47.2 million or 29 cents a share compared to $63.7 million or 40 cents a share in the same period of last year.

Operating income came at $37.8 million or 23 cents a share compared to $63.7 million or 40 cents a share, in the same period of last year.

Stripping out onetime items, adjusted or non-GAAP earnings came at $42.9 million or 26 cents a share.

Net sales during the quarter ended Jan 26, leaped 44% to $1.24 billion from $862 million, in the same quarter of last year, thanks to its recent acquisition of Lane Bryant and Catherines businesses. Online sales jumped 27%.

Analysts polled by Thomson Reuters were expecting earnings of 23 cents a share on sales of $1.23 billion.

For the fiscal 2013 ending July, the Company reaffirmed its initial earnings guidance of $1.20 to $1.30 a share, assuming 0% to 3% growth in comparable store sales and about 25% jump in online sales, during the spring season. The Company expects to open about 100-120 store in the spring season and shutter around 40 to 60 nonperforming stores. Earlier the Company had provided earnings guidance of $1.45 to $1.55 a share.

Analysts’ consensus estimate was for earnings of $1.24 a share for the fiscal 2013.