Ascena Retail Group, owner of the Ann Taylor, Loft and Lane Bryant chains, has swung to a fourth-quarter net loss amid a 4.6% drop in revenue and restructuring costs. 

For the three months ended 3 August, the company reported a net loss of US$358m, compared to net income of $33.2m the year before. Operating loss was $354m, which the company said reflects goodwill impairments as well as restructuring costs. Excluding non-cash impairment charges and other items, net loss totalled $16m.

Gross margin slipped to 54.3% from 58.1% of sales last year, due in the main to higher promotional activity to shift elevated inventory levels.

Net sales, meanwhile, fell to $1.45bn from $1.52bn, with flat comparable sales for the quarter.

In 2016 Ascena began a restructuring under its 'Change for Growth' programme to focus on key customer segments, improve its time-to-market and reduce working capital, with the changes including a new brand services team to oversee supply chain, sourcing and logistics. Goals included cost savings of up to US$150m by 2019, on top of savings of $235m from its integration of Ann Inc, owner of the Ann Taylor and Loft chains, which it acquired in August 2015. 

In July of this year, the company announced plans to close its 650 Dressbarn stores, and completed the sale of its Maurices women's clothing business for $300m.

"We made pivotal changes in the back half of fiscal 2019 as we exited our value fashion segment to focus on our brands where we see the biggest profitability potential," says Carrie Teffner, interim executive chair of Ascena. "Our board and executive team continue to actively assess the portfolio as we remain laser-focused on our key objective of returning to sustainable growth, improving operating margins and optimising our capital structure."

Looking ahead, for the first quarter of fiscal 2020 Ascena is forecasting net sales of $1.1bn-$1.13bn for its premium fashion, plus fashion, and kids fashion segments. Comparable sales of negative low single digits are also expected, as is a gross margin rate of 59.3% to 59.8%. Adjusted operating income is forecast at $15m-$35m.

"By shifting our focus to our brands and right-sizing our cost structure, we plan to capitalise on the meaningful and differentiated presence our brands have in the marketplace," says CEO Gary Muto. "We are evolving our merchandising strategy to incorporate greater versatility in our order to deepen loyalty with existing customers, re-engage lapsed customers and attract new customers.

"In addition, we are taking steps to enhance our cash position over the course of fiscal 2020 through a combination of cost-saving initiatives, rationalisation of our capital expenditures and disciplined working capital management. We are excited by the opportunities that lie ahead as we position ourselves to deliver long term profitable growth and enhance shareholder value."