Guggenheim Maintains a Hold Rating on Ascena Retail Group (ASNA)


In a report released yesterday, Robert Drbul from Guggenheim maintained a Hold rating on Ascena Retail Group (ASNA). The company’s shares closed yesterday at $1.89, close to its 52-week low of $1.77.

Drbul noted:

“We are encouraged by the performance of the LOFT direct outlet business, which now represents ~HT% of the LOFT outlet business. In the Value segment, maurices increased 1%, while dressbarn declined 1%. Plus was significantly pressured in the quarter, with Lane Bryant comps -8% and Catherines -4%. While we are encouraged by the strong results of the Premium segment and expect positive comps to continue, we remain mindful of declines across other segments of the portfolio. Due to a challenging February and macro headwinds facing the business, we are updating our 3Q19 comp estimate to -LSD% from +LSD% to reflect continued outsized declines in the Plus segment. Gross margin declined 190bps to 52.2% (vs. our estimate for a 100bps decline).”

According to TipRanks.com, Drbul is a 5-star analyst with an average return of 10.7% and a 66.2% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Capri Holdings Limited, and Wal-Mart Stores Inc.

Ascena Retail Group has an analyst consensus of Hold, with a price target consensus of $4.50.

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Based on Ascena Retail Group’s latest earnings release for the quarter ending October 31, the company reported a quarterly net profit of $5.9 million. In comparison, last year the company earned revenue of $1.72 billion and had a GAAP net loss of $39.3 million.

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Ascena Retail Group, Inc. engages in the retail of apparel, shoes, and accessories for women. It operates through the following segments: Premium Fashion, Value Fashion, Plus Fashion, and Kids Fashion. The Premium Fashion segment consists of products under Ann Taylor and LOFT brands.