Ascena Retail Group lowers Q3 Outlook :
Ascena Retail Group lowers Q3 outlook, 'cites highly elevated promotional environment have persisted at levels significantly above our expectations'- "Industry-wide traffic headwinds and a highly elevated promotional environment have persisted at levels significantly above our expectations, resulting in a miss to our third quarter sales and earnings outlook. We have adjusted our second-half outlook to reflect this environment and limited near term visibility, and no longer believe it appropriate to expect a stabilization of traffic and resulting normalization of comp sales against softer demand in the year-ago period."
The Company's revised third quarter and full year fiscal 2017 sales and earnings outlook is as follows:
- Period Comparable Sales Non-GAAP EPS Q3 FY17 Down 8% $0.04 - $0.06 (Prior $0.07-0.12), Capital IQ consensus $0.09.
- Full Year FY17 Down 7% - Down 6% to $0.10 - $0.15 (Prior $0.37-0.42), Capital IQ consensus $0.38.
- "The specialty retail sector is in a period of unprecedented secular change that is disruptive to traditional business models, and we believe operating conditions in our sector are likely to remain challenging for the next 12 to 24 months.
- Implementation of Change for Growth enterprise transformation program is well underway,These initiatives, along with an expanded structural cost reduction scope, are now expected to deliver $250 to $300 million in cost savings as compared to prior $150 million target. Co plans to provide a timeline and additional context regarding this increased target on Q3 earnings call, scheduled for June 5th.
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