Dress Barn Inc reported sales and earnings results for the fourth quarter and fiscal year ended July 28, 2007.
Fiscal Fourth Quarter Results:
Net sales for the fiscal fourth quarter ended July 28, 2007 increased 11% to a record level of $379.9 million compared to last year's $343.3 million for the fiscal fourth quarter ended July 29, 2006. Comparable store sales increased 5% on top of a 7% increase for the same fiscal quarter last year.
Net earnings for the fiscal fourth quarter increased to a record level of $33.6 million, or $0.48 per diluted share. This compares to net earnings of $24.4 million, or $0.35 per diluted share, for the comparable period of fiscal 2006.
During the fourth quarter the Company recognized, within net sales, $3.7 million from the non-redemption of a portion of gift cards and gift certificates sold, and merchandise credits issued. This represents the cumulative effect of breakage income. As a result, diluted earnings per share were favorably impacted during the quarter and the year by approximately $0.03.
2007 Fiscal Year Results:
Net sales for the fiscal year ended July 28, 2007 increased 10% to a record level of $1.427 billion compared to $1.300 billion reported for the fiscal year ended July 29, 2006. Comparable store sales increased 5% in fiscal 2007 on top of an 8% increase in fiscal 2006.
Net earnings for the fiscal 2007 increased to a record level of $101.2 million, or $1.45 per diluted share. This compares to net earnings of $79.0 million, or $1.15 per diluted share, for the comparable period last year. Excluding the impact of breakage income, diluted earnings per share for fiscal 2007 would have been $1.41.
Commentary:
David R. Jaffe, President and Chief Executive Officer of Dress Barn, Inc. commented, "We are again pleased to report record quarterly and annual sales and earnings results, marking the strongest performance in our Company's history. This milestone was achieved on top of a record performance in the prior year. We are very pleased to have leveraged this performance, generated approximately $90 million in free cash, repurchased a significant amount of our stock, and grown our store base."
Mr. Jaffe continued, "As we begin the new fiscal year, our maurices business continues its strong performance. Our dressbarn stores business has slowed as we believe this customer is feeling more of the effects of the current economic slowdown."
"This has resulted in increased dressbarn stores inventory levels versus our plan which will require increased markdowns throughout the first quarter to bring these levels into line. We are optimistic that our dressbarn business will improve as we move through the fall/holiday season and into spring."
"As previously announced, we completed the Company's $75 million share repurchase program by recently repurchasing 2.6 million of our total outstanding shares at cost of approximately $48.3 million."
"While we intend to seek Board approval of a new share repurchase program at this Thursday's Board meeting, we are also cognizant that our strong balance sheet and cash flow place us in an excellent position, particularly given the current capital markets environment, to take advantage of further strategic development opportunities."
Fiscal July 2008 Guidance:
The Company's guidance for earnings per diluted share for fiscal 2008 is in the range of $1.40 to $1.50, based on 67.5 million fully diluted shares outstanding and is reflective of the Company's current business outlook. This estimate is based upon various assumptions, including estimated comparable store sales growth in the 3% to 4% range for the year. The Company plans to open 105 stores and close approximately 30 stores, ending fiscal 2008 with 1,505 stores in operation. Capital expenditures are estimated to be in the range of $70 million to $75 million.
Conference Call Information:
The Company will conduct a conference call on September 19, 2007 at 9:00 AM Eastern Time to review its fiscal fourth quarter and year end financial results followed by a question and answer session. The conference call will also be simultaneously broadcast at company’s website. A recording of the conference call will be available until October 26, 2007.
