• Q2 losses widen to US$35m
  • Gross margin increases to 54.1%
  • Net sales fall 4.9% to $1.75bn
Ascena deepened its losses in the second quarter

Ascena deepened its losses in the second quarter

Ongoing store traffic headwinds and overall customer price sensitivity continued to impact US women's wear retailer Ascena Retail Group in its second-quarter as net losses widened and sales fell.

In the three months ended 28 January, net losses amounted to US$35m from $23m a year earlier as a result of acquisition and integration related costs, and accounting adjustments associated with the company's acquisition of Ann Inc in 2015. The quarter also included restructuring charges related to Ascena's Change for Growth programme.

Gross margin, meanwhile, widened to 54.1% from 52.6%, while net sales dropped 4.9% to $1.75bn, reflecting the impact of a 4% comparable sales decline.

"As I reflect on our strategic position, we continue to see the disruptive trend toward e-commerce transactions, and the growing influence of online engagement on traditional brick and mortar activity across our sector," said CEO David Jaffe. "We've invested heavily in our omni-channel platform over a multi-year period, and we continue to aggressively evolve our organisation to embrace and serve customers in this new retailing paradigm. Yet, there is much more to do."

As part of its Change for Growth transformation work, Ascena says it is developing advanced analytics and customer experience management capabilities aimed at enhancing its opportunities to drive revenue and margin.

"We continue to aggressively pursue cost structure opportunities, including refinement of our operating model and our ongoing fleet optimisation work. We view these initiatives as critical enablers that will allow us to profitably serve our customers in a highly dynamic sector," Jaffe added.