EX-99.1 2 v126679_ex99-1.htm Unassociated Document
 

NEWS RELEASE

DRESS BARN, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR 2008 SALES AND EARNINGS

SUFFERN, NY - SEPTEMBER 17, 2008 - Dress Barn, Inc. (NASDAQ - DBRN) today reported sales and earnings results for the fourth quarter and fiscal year ended July 26, 2008.

Fiscal Fourth Quarter Results

Net sales for the fiscal fourth quarter ended July 26, 2008 were $382.3 million, compared with net sales of $379.9 million for the fiscal fourth quarter ended July 28, 2007. Comparable store sales for the quarter declined 2% versus the prior year’s increase of 5%.

By division, net sales at dressbarn stores were $238.5 million compared with net sales of $251.0 million in the fourth quarter of fiscal 2007. Comparable store sales for the quarter declined 5%, compared to the prior year’s 1% increase. Net sales at maurices stores were $143.8 million compared with net sales of $128.9 million in the fourth quarter of fiscal 2007. Comparable store sales for the quarter increased 4% on top of the prior year’s 13% increase.

Net earnings for the fiscal fourth quarter were $22.1 million, or $0.34 per diluted share. This compares to record net earnings of $33.6 million, or $0.48 per diluted share for the comparable period of fiscal 2007.

2008 Fiscal Year Results

Net sales for the fiscal year ended July 26, 2008 were $1.444 billion, compared with net sales of $1.427 billion for the fiscal year ended July 28, 2007. Comparable store sales declined 3% versus the prior year’s increase of 5%.

By division, net sales at dressbarn stores were $887.6 million compared with net sales of $934.8 million for fiscal 2007. Comparable store sales declined 7% versus the prior year’s increase of 4%. Net sales at maurices stores were $556.6 million compared with net sales of $491.8 million for fiscal 2007. Comparable store sales increased 4% on top of last year’s increase of 7%.

Net earnings for fiscal 2008 were $74.1 million, or $1.15 per diluted share. This compares to record net earnings of $101.2 million, or $1.45 per diluted share for fiscal 2007.

Commentary

David R. Jaffe, President and Chief Executive Officer stated, “Our full year results certainly show the impact of what has been a very challenging retail environment. While we have not been able to avoid the pressures of the marketplace, we have managed the business prudently and made a number of improvements to our operations and created a leaner, more responsive business model. At the store level, we have successfully implemented significant inventory controls to reduce our exposure to markdowns. We have also been vigilant with regard to expenses, investing only in those areas where we see a clear return on investment.”

 
 
Mr. Jaffe continued, “Our dressbarn stores business has shown recent improvement due to improved execution, trend-right merchandise assortment, and effective marketing programs that reinforce our value message to consumers. With our most difficult comparisons behind us, we believe that our Company can perform well even in view of our expectation for a continued challenging environment. At maurices stores, while the start to the back to school season has been softer than anticipated, we believe that maurices is appropriately positioned given the current difficult environment.”
 
Mr. Jaffe concluded, “Our Company continues to generate good levels of cash flow ending the fiscal year with approximately $278 million of cash and investments. As we look forward, we believe that we can effectively leverage our strong financial position to our strategic advantage, particularly as we open new locations and update our store base with targeted remodels. While we continue to plan our business prudently and carefully manage our expenses and inventory, we believe that we have the ability to respond quickly and effectively to any improvements in market conditions and to flow incremental benefits to our bottom line.”

Fiscal July 2009 Guidance

The Company’s guidance for earnings per diluted share for fiscal 2009 is in the range of $1.23 to $1.28, based on approximately 67.5 million fully diluted shares outstanding and is reflective of the Company’s current business outlook. This earnings per share estimate is based upon various assumptions, including estimated comparable store sales growth in the low single digits for the year. The Company plans to open 100 stores and close 30 stores, ending fiscal 2009 with approximately 1,575 stores in operation. Capital expenditures are estimated at $70 million.

Conference Call Information

The Company will conduct a conference call today, September 17, 2008 at 4:30 PM Eastern Time to review its fiscal fourth quarter and year end financial results followed by a question and answer session. Parties interested in participating in this call should dial in at (617) 597-5362 five minutes prior to the start time, the passcode is 81104575. The call will also be simultaneously broadcast at www.dressbarn.com. A recording of the call will be available shortly after its conclusion and until October 17, 2008 by dialing (617) 801-6888, the passcode is 14532793.

ABOUT DRESS BARN, INC.
Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty apparel retailer offering quality casual and career fashion apparel through its dressbarn and maurices brands. As of July 26, 2008, the Company operated 826 dressbarn stores in 46 states and 677 maurices stores in 44 states. For more information, please visit www.dressbarn.com and www.maurices.com.

Forward-Looking Statements
Certain statements made within this press release may constitute “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is readily available on our most recent report on Form 10-K for the year ended July 28, 2007 and Form 10-Q for the quarter ended April 26, 2008.

CONTACT:  Dress Barn, Inc.
      Investor Relations
      (845) 369-4600
 
 


Dress Barn, Inc. and Subsidiaries
  
Condensed Consolidated Statements of Earnings- Unaudited
 
Amounts in thousands, except per share amounts
  
 
  
 
  
Thirteen Weeks Ended
  
 
  
July 26, 2008
  
 
  
July 28, 2007
  
 
  
 
  
 
  
 
  
 
  
 
  
Net sales
  
$
382,303
    
100.0
%
$
379,902
    
100.0
%
Cost of sales, including occupancy and buying costs
    
231,309
   
60.5
%
  
216,010
   
56.9
%
Gross profit
    
150,994
   
39.5
%
  
163,892
   
43.1
%
Selling, general and administrative expenses
    
101,854
   
26.6
%
  
100,130
   
26.4
%
Depreciation and amortization
    
12,474
   
3.3
%
  
11,935
   
3.1
%
Operating income
    
36,666
   
9.6
%
  
51,827
   
13.6
%
 
    
   
   
   
 
Interest income
    
1,826
   
0.5
%
  
2,637
   
0.7
%
Interest expense
    
(1,192
)
  
-0.3
%
  
(1,152
)
  
-0.3
%
Other (expense) income
    
(671
)
  
-0.2
%
  
371
   
0.1
%
Earnings before income taxes
    
36,629
   
9.6
%
  
53,683
   
14.1
%
Income taxes
    
14,515
   
3.8
%
  
20,054
   
5.3
%
Net earnings
  
$
22,114
    
5.8
%
$
33,629
    
8.9
%
 
    
   
   
   
 
Earnings per share:
    
   
   
   
 
Basic
  
$
0.37
    
 
$
0.54
    
 
Diluted
  
$
0.34
    
 
$
0.48
    
 
 
    
   
   
   
 
Weighted average shares outstanding:
    
   
   
   
 
Basic
    
60,175
   
   
62,370
    
 
Diluted
    
64,495
   
   
70,027
        

 
 
Dress Barn, Inc. and Subsidiaries
  
Condensed Consolidated Statements of Earnings- Unaudited
 
Amounts in thousands, except per share amounts
  
 
  
 
  
Fifty-Two Weeks Ended
  
 
  
July 26, 2008
  
 
  
July 28, 2007
  
 
  
 
  
 
  
 
  
 
  
 
  
Net sales
  
$
1,444,165
    
100.0
%
$
1,426,607
    
100.0
%
Cost of sales, including occupancy and buying costs
    
885,927
   
61.3
%
  
842,192
   
59.0
%
Gross profit
    
558,238
   
38.7
%
  
584,415
   
41.0
%
Selling, general and administrative expenses
    
397,424
   
27.5
%
  
383,652
   
26.9
%
Depreciation and amortization
    
48,200
   
3.3
%
  
45,791
   
3.2
%
Operating income
    
112,614
   
7.8
%
  
154,972
   
10.9
%
 
    
   
   
   
 
Interest income
    
7,817
   
0.5
%
  
7,051
   
0.5
%
Interest expense
    
(4,825
)
  
-0.3
%
  
(4,883
)
  
-0.3
%
Other income
    
512
   
0.0
%
  
1,382
   
0.1
%
Earnings before income taxes
    
116,118
   
8.0
%
  
158,522
   
11.1
%
Income taxes
    
42,030
   
2.9
%
  
57,340
   
4.0
%
Net earnings
  
$
74,088
    
5.1
%
$
101,182
    
7.1
%
 
    
   
   
   
 
Earnings per share:
    
   
   
   
 
Basic
  
$
1.23
    
 
$
1.63
    
 
Diluted
  
$
1.15
    
 
$
1.45
    
 
 
    
   
   
   
 
Weighted average shares outstanding:
    
   
   
   
 
Basic
    
60,102
   
   
62,020
    
 
Diluted
    
64,467
   
   
70,022
    
 
 
 
 
 
Dress Barn, Inc. and Subsidiaries
  
Condensed Consolidated Balance Sheets- Unaudited
Amounts in thousands
 
 
  
July 26, 2008
  
July 28, 2007
  
ASSETS
      
 
  
Current Assets:
  
 
  
 
  
Cash and cash equivalents
  
$
127,226
  
$
67,133
  
Marketable security investments
   
92,697
    
177,446
  
Merchandise inventories
    
186,983
    
197,143
  
Deferred income tax asset
    
-
   
4,242
  
Prepaid expenses and other
    
24,882
    
17,831
  
Total Current Assets
    
431,788
    
463,795
  
 
    
   
 
Property, Plant and Equipment
    
525,605
    
485,203
  
Less accumulated depreciation and amortization
    
251,326
    
228,749
  
Property, Plant and Equipment, net
    
274,279
    
256,454
  
 
    
   
 
Intangible Assets, net
    
107,802
    
108,932
  
Goodwill
    
130,656
    
130,656
  
Marketable Security Investments
    
58,404
    
-
 
Other Assets
    
21,530
    
21,488
  
TOTAL ASSETS
  
$
1,024,459
  
$
981,325
  
 
    
     
LIABILITIES AND SHAREHOLDERS' EQUITY
    
   
 
Current Liabilities:
    
   
 
Accounts payable - trade
  
$
121,084
  
$
133,802
  
Accrued salaries, wages and related expenses
    
27,934
    
30,062
  
Other accrued expenses
    
50,970
    
60,009
  
Customer credits
    
14,822
    
15,141
  
Income taxes payable
    
-
   
4,238
  
Deferred income tax liability
    
401
   
-
 
Current portion of long-term debt
    
116,277
    
116,211
  
Total Current Liabilities
    
331,488
    
359,463
  
 
          
Long-Term Debt
   
27,263
    
28,540
  
Deferred Rent and Lease Incentives
    
62,003
    
53,356
  
Deferred Compensation and Other Long Term Liabilities
    
44,391
    
25,862
  
Deferred Income Tax Liability
    
3,232
   
4,703
  
Total Liabilities
    
468,377
    
471,924
  
Shareholders' Equity
    
556,082
    
509,401
  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  
$
1,024,459
  
$
981,325