Widespread promotions and markdowns reduced second quarter profit at Ascena Retail Group, despite a healthy boost to revenues from new acquisitions.
The 44% sales increase in the three months to 26 January was mainly caused by the inclusion of the recently acquired Lane Bryant and Catherines businesses, with comparable store sales rising by only 2%.
Justice and Catherines registered comparable sales increases of 4% and 6% respectively, but Lane Bryant, Maurices and Dressbarn all posted negative comps thanks to soft holiday sales.
In all, store comps edged down 1%, but e-commerce comparable sales were up 27%, the retail business said.
“Our second quarter performance reflects a difficult holiday season during which we utilised promotion and markdown strategies to manage inventory for an effective transition to spring assortments,” said president and CEO David Jaffe.
“We expect the challenging environment to continue and have adjusted our sales, promotion and inventory plans accordingly.”
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