Women's apparel retailer The Dress Barn Inc on Thursday reported "better than expected" fourth quarter earnings driven by strong merchandise margins and tight expense control.

In a separate announcement the company said its board approved the initiation of a tender offer to buy up to eight million shares of outstanding stock. The repurchase will take the form of a "dutch auction" in which shareholders will be able to offer some or all of their shares at a price of $15-17 each.

Net income for the fiscal fourth quarter ended 27 July 2002 increased to $13.4 million, or $0.36 per share compared to $8.3 million, or $0.22 per share, for the same quarter in 2001. Sales were up 5 per cent to $186.7 million against $177.3 million last year. Comparable store sales were flat.

For the fiscal year ended 27 July 2002, Dress Barn said net income was $37.9 million, or $1.01 per share compared to $35.3 million, or $0.94 per share (post split) for the fiscal year ended 28 July 2001. Net sales increased 3 per cent to $717.1 million compared to $695.0 million, but comparable store sales dipped 2 per cent.

The company said its fiscal 2002 and 2001 earnings per share were reduced by approximately $.11 and $.20, respectively, due to the operating costs of the catalog and e-commerce operations.

Elliot S Jaffe, chairman of the board of The Dress Barn Inc, said: "Early Fall selling has been disappointing with recently reported August comparable store sales decreasing 2 per cent. This sales trend has continued into September. We continue to operate our business conservatively, given the weak economy and the highly promotional retail environment."

As of 24 August 2002, the company operated 767 stores in 43 states.