Ascena Retail Group (ASNA) Stock Falling On Missed Earnings And Poor Guidance

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Ascena Retail Group Inc (NASDAQ: ASNA)

Ascena Retail Group is having an incredibly rough day in the market today, and for good reason. The company released its earnings for the fourth fiscal quarter, missing expectations in a big way. To make matters worse, the company’s guidance came in well below expectations. Today, we’ll talk about what we saw from earnings, how the stock reacted to the news, and what we can expect to see from ASNA moving forward.

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ASNA Misses The Mark On Earnings

As mentioned above, Ascena Retail Group is having a horrible trading session today. The company released its financial results for the fourth fiscal quarter. While revenue came in ahead, earnings missed expectations. To make matters worse, guidance wasn’t quite what investors wanted to see. Here’s what we saw from the report:

  • Top Line Revenue – If there’s one area on the report that investors weren’t upset with, it’s top-line revenue. During the fourth quarter, analysts expected that the company would generate revenue in the amount of $1.77 billion. However, ASNA actually reported revenue for the quarter in the amount of $1.81 billion.
  • Earnings Per Share – Unfortunately, earnings per share wasn’t quite so positive. During the fourth quarter, analysts expected that ASNA would generate earnings in the amount of $0.16 per share. However, the company actually reported earnings for the quarter in the amount of $0.08 per share, cutting analyst expectations in half.
  • FY17 Earnings Guidance – When it comes to earnings guidance, Ascena Retail Group missed the mark in a big way. For the full fiscal year 2017, the company said that it is expecting earnings to come in between $0.60 and $0.65 per share. This falls well short of analyst expectations at $0.83 per share.
  • FY17 Revenue Guidance – Unfortunately, the picture didn’t get any better when looking at guidance with regard to top-line revenue in the full year 2017. During the year, analysts are expecting that ASNA will generate revenue in the amount of $7.17 billion. However, the company said that it is expecting revenue for the year to come in the range between $6.9 and $7.0 billion.

What We’re Seeing From The Stock

As investors, one of the first things that we learn is that it’s important to watch news surrounding stocks. That’s especially the case when news has to do with earnings reports. Unfortunately for ASNA, the news wasn’t positive. An overwhelmingly negative earnings report mixed with poor guidance is sure to get under the skin of investors. As a result, we’re seeing big declines today. Currently (12:47), the stock is trading at $5.82 per share after a loss of $2.30 per share (28.33%).

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What We Can Expect To See Moving Forward

While I would love to say that Ascena Retail Group is reaching the end of the struggles, that’s simply not the case. The reality is that the retail industry is having a hard time. From the guidance offered, it’s clear that ASNA expects for their blues to continue throughout the next year. All in all, things aren’t looking good for the short or midterm. However, a near-term economic turn around could make the long-term picture incredibly appealing.

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