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Ascena Retail Group(NASDAQ: ASNA)

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Q4 2018 Antithesis Appointment Call

Sep. 24, 2018 4:30 p.m. ET

Operator

Good day, ladies and gentlemen, and adequate to the Q4 2018 Ascena Retail Accumulation Inc. antithesis appointment call. [Operator instructions] As a reminder, this appointment is actuality recorded. I would now like to acquaint your host for today’s conference, Jennifer Davis, arch VP at ICR. You may begin.

Jennifer Davis — ICR Investor Relations

Thank you. Adequate afternoon, and adequate to Ascena’s fourth-quarter budgetary 2018 antithesis alarm and webcast. Before we begin, I’d like to admonish you that assertive statements and advice fabricated accessible on today’s alarm and webcast may be accounted to aggregate advanced statements. These advanced statements reflect the company’s accepted expectations as of September 24, 2018, and are accountable to a cardinal of accepted and alien risks and uncertainties that could account absolute after-effects to alter materially.

The aggregation undertakes no obligation to alter or amend any advanced statements. Additionally, today’s alarm and webcast may accredit to non-GAAP banking measures. A adaptation of GAAP and non-GAAP measures discussed today is included in our antithesis release, a archetype of which was filed with the U. S. 

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Securities and Exchange Commission in a accepted address on Form 8-K beforehand today. Please accredit to the For Investors area of ascenaretail.com for a epitomize of today’s appointment call. Note the aggregation has acquaint a added advance amalgamation to augment advice provided on today’s alarm on its IR website and as an adapter to it’s 8-K appear beforehand today. Hosting today’s alarm are David Jaffe, Ascena’s arch controlling officer; Gary Muto, admiral and CEO of Ascena Brands; Brian Lynch, admiral and arch operating officer; and Robb Giammatteo, Ascena’s arch banking officer.

Thank you. And I will now duke the alarm over to David.

David Jaffe — Arch Controlling Officer

Thank you, Jen. Adequate afternoon, everyone, and accede you for aing us. Our fourth division reflected consecutive atone advance above all our brands and the aboriginal enterprise-level absolute atone division for Ascena aback the added division of budgetary 2015. Commensurable sales added 4% and excluding dressbarn, all brands delivered absolute comps.

Specific to dressbarn, we delivered 9 allotment credibility consecutive atone advance from our third division and accept absolutely displace the brand’s account control — position branch into budgetary 2019. Antithesis per allotment of $0.07 came in aloft our guide, and while we were admiring with the advance of the division it represents alone the aboriginal footfall in a row aback to acumen Ascena’s abounding antithesis potential. We’ve talked on above-mentioned calls about the three pillars of our Change for Advance transformation program. Amount takeout, adequacy enhancement, and the reinvigoration of our amount business.

In agreement of amount takeout, we abide on clue to accomplish $300,000,000 in anniversary run amount accumulation by July 2019. Apropos adequacy enhancement, we are currently implementing the two absolute ample apparatus of our transformation program, localized planning, and our chump acquaintance administration ecosystem. As we entered budgetary 2019, we are leveraging the foundation we congenital over the accomplished two years to axis the alignment against the best analytical colonnade of our transformation program, reinvigorating advance from our core. We are focused on active an active customer-centric, ambitious mindset above our organization.

This work, which was aboriginal adopted at Justice, is now actuality deployed above our full- cast portfolio. It enables our cast teams to absolutely embrace our chump by bottomward long-held behavior about what we anticipate she wants, and responding to what she absolutely wants. We are developing abundant added insights to accept how she perceives our cast and how they fit into our affairs and anecdotic unmet needs to break chump affliction points. Developing this abyss of chump acumen requires our teams to apprentice why she buys what she buys, and how she uses our brands against those of our competitors.

It additionally requires us to accumulate an advancing chat with our barter to acquaint our artefact development and go-to-market strategies. This assignment has absolute applied and able applications to our amount business and has been the active force abaft able articulation at our Justice brand. Apropos new business development opportunities, we launched Lou & Grey at Nordstrom aftermost month, initially affairs online and in 30 stores. While still early, we are admiring with antecedent results.

We additionally completed bazaar studies that abutment a added advancing advance aisle for our Cacique Intimates business. And finally, we abide to analyze relationships that will acquiesce us to apprehend calibration allowances of our accumulation alternation belvedere through third-party services. We abide committed to acumen the abounding amount of our cast portfolio and belvedere capability. At the amount of approaching abiding holder amount conception is the affiance of a awful differentiated and growing accumulation of arch cast accurate by a cost-effective infrastructure.

We access budgetary 2019 with adequate abject drive and key advance initiatives alpha to accession absorption above our brand. We are authoritative headwind with stabilization of our dressbarn cast and we’ll abide for opportunities above our cast portfolio to actualize actor value. With that, I’ll duke things over to Gary to altercate key developments above our cast portfolio. Gary?

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Thanks, David. Constant with our angle from aftermost quarter, we abide to see drive advance at Justice, Lane Bryant, and LOFT. These brands collectively delivered atone advance of 7% and chiefly atone allowance advance of 9%. At Ann Taylor, dressbarn, Catherines, and maurices we saw a cogent consecutive point advance from the third quarter, which should accredit us to bear our aboriginal enterprise-level atone access in anniversary 2015.

While our bigger atone achievement was in allotment accurate by a stronger macro environment, it reflects the cogent assignment we’ve done on artefact and chump acumen work, that David referenced earlier. We’ve launched a cardinal of cogent initiatives above our portfolio, advised to drive adequate enterprise-level atone sales growth. Starting with Justice. Atone sales added 15% in the fourth quarter, accelerating sequentially from an already able double-digit amount in Q3.

Performance was apprenticed by broad-based chump accepting of our array with double-digit atone advance above both our accoutrement and specialty businesses. We abide to see accelerated advance of our Club Justice Loyalty program, which has accomplished over 4.1 actor associates beneath than one year afterwards launch. Chump assurance amount is absolute able with 67% of absolute absorb absorbed to ability transaction, and boilerplate absorb per chump of 5% to a year-ago period. We are admiring with Justice’s back-to-school achievement and its connected double-digit absolute comps trends division to date.

Turning to LOFT. The [Garbled] advancing out of the third division connected throughout the fourth quarter, with the cast carrying high-single-digit atone sales and allowance growth. Achievement was broad-based, with able absolute accepting above our assortment. We apprehend this drive to abide as we move into budgetary 2019, apprenticed by bigger absolute accepting and several detached initiatives, including articulation of our Lou & Grey business, the barrage of our Outlet business online, and connected advance of our new added assortment.

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Specific to the detached LOFT initiatives, as David referenced earlier, we began affairs Lou & Grey [Inaudible] at 30 Nordstrom food and at nordstrom.com, and are admiring with the antecedent artefact acceptance. Our LOFT Outlet business launched in — online business launched in June and now represents approximately 10% assimilation of LOFT Outlet business, with no affirmation of cannibalization from the food channel. And finally, we abide to access our LOFT Added sizes online and afresh formed out the added array to a 50-store pilot groups. We’re advance abaft these initiatives, which represent cogent befalling above the LOFT brand.

At Lane Bryant, atone sales were up low-single-digits absorption connected backbone in Cacique Intimates, partially account by a 1% abatement in apparel. The apparel business bigger sequentially from the third division and we accept we are positioned to acknowledgment to its advance this fall. Division to date, accoutrement comps are up low distinct digits. Turning to Cacique Intimates.

Performance has remained [Inaudible] quarter to quarter, and we plan to access marketing investments this abatement to drive cast acquaintance and new applicant acquisition. Now, I would like to provide some ambience on the of our portfolio. At Ann Taylor, we delivered mid-single-digit allowance growth, apprenticed by the aboriginal positive-comp division aback 2014. Achievement was apprenticed by bigger antithesis of key items in fashion at our full-price channel.

Suiting and dresses abide able categories, carrying mid-single-digit growth. We fabricated focused on repositioning our acme assortment, which is analytical to advancement abundant momentum. We are admiring with quarter-to-date achievement in acme in our full-price channel, which has been apprenticed by new silhouettes and an added account to armamentarium our Cacique business. And we accept Ann Taylor cast is positioned able-bodied affective into budgetary 2019.

At dressbarn, we accept we’ve amorphous to antithesis performance, with cogent bigger artefact acceptance. We are, again, carrying age-appropriate appearance for our mid-50s amount customer, including the reintroduction of key third-party brands. Fourth-quarter atone sales were bottomward mid-single digits constant from our accommodation to advance final markdowns and disposition of prior-season’s goods. The new administration aggregation has fabricated abounding operational changes in the accomplished six months, which we accept are starting to accession traction.

We are encouraged by the achievement of the aftermost three abatement attic sets, and we are in the final stages of our absolute chump acumen work, which would be a analytical adviser for how we affix bigger with our barter and accord her the accordant artefact and experiences. We assured the division with account units bottomward in antithesis of 20%, and we abide to plan account conservatively, so that we can apprehend the accession and accede appropriately. At maurices, we delivered our aboriginal absolute atone aback in the aboriginal division of fiscal 2016. While we are admiring with bigger atone achievement in the fourth quarter, after-effects don’t reflect the brand’s abounding antithesis potential.

We accept maurices has the befalling to strengthen its position as the best hometown specialty player, and abide to analyze means to advantage the brand’s altered store footprint, including localized agenda business strategies and artefact assortments. Additionally, the contempo achievement of the basal defalcation offers potentials to allure new barter and access bazaar share. And finally, at Catherines, our aggregation delivered able consecutive advance in the fourth quarter, apprenticed by decidedly bigger artefact acceptance. In summary, while we are admiring with the fourth quarter, we accept assignment to do to drive added constant achievement above our cast portfolio.

Our exceptional kids and added segments are authoritative adequate advance with beheading of their corresponding cast strategies, while our amount articulation continues to assignment through cast specific challenges. In budgetary 2018, we fabricated cogent changes to our operating archetypal to bigger position anniversary of our brands for growth. We brought in a new committed administration aggregation at dressbarn, which is developing a roadmap for accession and began to antithesis cast performance. We additionally afresh animated two centralized executives, Julie Rose and Andrew Clark, to anew created admiral roles at Ann Taylor and LOFT, who are tasked to continuing beheading of their corresponding cast strategies.

The new operating archetypal will accredit me to abode greater accent on cardinal advance initiatives, cast building, chump insights while administering the beheading above our cast portfolio. With that, I’ll duke it off to Brian for a abrupt amend on our transformation work.

Brian Lynch — Admiral and Arch Operating Officer

Thanks, Gary, and adequate afternoon, everyone. And now we’ll accommodate a abrupt amend on our Change for Advance transformation affairs and the associated capabilities we are architecture in abutment of our cast teams. As David referenced earlier, we are tracking calmly to our $300 actor amount takeout figure, and abide to assignment on added opportunities to booty this amount higher. Major contributors to budgetary 2019 amount takeout accommodate non-merchandise accession savings, IT efficiencies accompanying to our All-around Addition Center at Bangalore, and our connected assignment with the agile optimization.

Specific to agile optimization, freeholder negotiations continues to be absolute productive. We abide assured we will accomplish the targeted $60 actor in accumulative busy concessions above our portfolio by July of 2019. We accept completed enterprisewide rollout of markdown and size-pack optimization, forth with localized appeal planning, which is now alive above our exceptional segment. We apprehend to abide rollout of localized appeal planning above the of our cast portfolio this advancing spring, which will mark the achievement of our commodity planning apartment of accoutrement advised in our transformation program.

We’ve additionally fabricated advance developing our chump acquaintance administration ecosystem, which will advice drive personalization and optimize the lifetime amount of our customers. All accoutrement and third-party — ally accept been called and we apprehend to complete accomplishing in agenda 2019. During the quarter, we additionally implemented our action animal basic administration system, constant in bigger accessory account and amount efficiencies, including the sunsetting of assorted bequest HR systems. Finally, we abide to aggrandize our all-around sourcing abilities to drive margins and artefact acceptance.

We accept launched our new artefact development action that has bargain our acceleration to market, or access our speed-to-market, bargain our time by 30% to 40%, acceptance us to accomplish affairs decisions abundant afterpiece to absolute artefact commitment dates. This action is alive above our Justice, maurice and Lane Bryant brands. And we are currently alive to barrage the action at dressbarn this fall. In closing, we abide optimistic that the capabilities we are deploying and the efficiencies we are carrying will accredit our brands to added finer attempt in our continuously evolving area And with that, here’s Robb.

Robb Giammatteo — Arch Banking Officer

Thanks, Brian. Adequate afternoon, everyone. Before I altercate our operational performance, I appetite to highlight that my comments on this alarm will advertence non-GAAP results, which exclude items that affect year-on-year comparability, such as restructuring costs and the appulse of the 53rd anniversary of budgetary 2018, which adjust our business with the NRF calendar. Constant with accomplished practice, we acquaint a added antithesis amalgamation to our IR website and absorbed it to our 8-K to accommodate added ambience on achievement for the quarter.

I will accredit to this certificate in my able animadversion and may advertence it as able-bodied during Q&A. As David referenced earlier, we delivered fourth-quarter antithesis of $0.07 per share. Atone sales were up 4%, apprenticed by assemblage advance with boilerplate affairs amount bottomward modestly. Transactions were up low-single-digits with our absolute approach up over 20% and our abundance approach bottomward low-single-digits.

Within our abundance channel, we accomplished a 1% abatement in cartage with advance adapted mostly offsetting mid-single-digit declines above the blow of our portfolio. Fourth-quarter and full-year budgetary 2018 absolute assimilation was up 25%, absorption an almost 4-percentage-point access from budgetary 2017. Gross allowance amount of 57.5% was up 10 abject credibility to aftermost year with able amount achievement at our exceptional and kids segment, abundantly account by declines at added and amount segments. In our added segment, the commodity allowance was up to aftermost year, absorption convalescent array achievement and acclimatized account administration with the account acquired primarily by college bales amount constant from added e-commerce penetration.

The abatement in our amount articulation was acquired primarily by lower approval amount point at dressbarn, as we adjudge to bright prior-seasoned appurtenances over Labor Day against November in the above-mentioned year. Operating amount is up $13 million, or 1.6% for the quarter, acquired by $19 actor in incremental performance-based compensation. We accomplished $40 actor in absolute transformation accumulation and synergies in the fourth division as a aftereffect of headcount reductions, non-merchandise accession savings, and agile optimization. Budgetary 2018 full-year operating amount is bottomward $66 actor to the above-mentioned year, and bottomward about $175 actor on a two-year basis.

Touching briefly on our agile access program. We assured budgetary 2018 with the agile calculation of 4,622, absorption over 250 closures aback the alpha of the affairs in January 2017. Our agile access affairs currently covers about 20% of our abundance base, and we will abide to focus on abbreviation control amount and abridgement all-embracing continuance to aerate the activity of our charter portfolio. Added detail on our manual amount accumulation ambition is provided on Advance 10 of our added antithesis package.

Turning to our antithesis sheet. We assured the fourth division with $239 actor in banknote and cash-equivalents, and absolute debt of $1.372 billion, apery the antithesis of our appellation loan. Our asset abject blaster was undrawn at quarter-end. We [Inaudible] amortized $180 actor of our appellation accommodation in the fourth quarter, accoutrement all appointed acquittal payments through November of 2020.

Between blaster availability and cash, we had $712 actor in clamminess at quarter-end. Apropos our basic structure, net debt is 2.5 times abaft 12-month EBITDA. And abaft 12-month EBITDA is 4.8 times of our anniversary absorption obligation. We are adequate with our clamminess position.

And we abide focused on convalescent our all-embracing banking adaptability by continuing to abate our outstanding debt. We apprehend budgetary 2019 chargeless banknote breeze to be in antithesis of budgetary 2018, and we’ll altercate our adviser in a moment. At the absolute aggregation level, we exited the fourth division with account of $623 million, which was bottomward about 3% from the year-ago period. At the articulation level, quarter-end account was bottomward about 15%, and our amount articulation absorption the bourgeois position we are demography at dressbarn to acquiesce us to hunt into brand’s recovery.

We abide adequate with account levels and agreement above all brands. Basic expenditures for the fourth division were $52 million, with full-year budgetary 2018 capex of $181 million. Attractive advanced to budgetary 2019, we are reinstituting full-year advice and apprehend full-year antithesis per allotment alignment from breakeven to a accession of $0.10, accurate by the afterward assumptions, net sales of $6.45 billion to $6.55 billion, with commensurable sales up low-single-digits, apprenticed by our premium, added and kids segment. Gross allowance amount of 57.6% to 58.1% with the beggarly up 20 abject credibility to budgetary 2018.

This angle reflects planned amount accession at dressbarn, which was bottomward 250 to 300 abject credibility beneath actual levels aftermost year forth with commodity allowance amount advance at our premium, added and kids segment. These impairments will be abundantly account by the connected accepted mix about-face against our absolute approach and associated college aircraft costs. And finally, operating amount advance of about 1% with the access acquired by inflationary pressure, detached investments and advance initiatives at our exceptional articulation and the displace of performance-based advantage to target. These increases are accepted to be mostly account by transformation-related accumulation and abundance closures.

The absolute apparatus of our guide, including depreciation, interest, taxes and allotment calculation can be begin in our columnist absolution and our added antithesis guidance. Together with full-year basic expenditures, which are accepted in the ambit of $180 actor to $210 million, we apprehend budgetary 2019 chargeless banknote flow, authentic as banknote from operations beneath capex, of $200 actor to $240 million. And finally, we apprehend to aing about 5% of our budgetary 2018 year end fleet, with abundance calculation bottomward in the ambit of 4,375 to 4,425 by July of 2019. Specific to the aboriginal division of budgetary 2019, we apprehend non-GAAP antithesis per allotment alignment from abrogating $0.04 to absolute $0.06, absorption a aggregate abortive timing appulse of about $0.10 accompanying to the 53rd anniversary in budgetary 2018, which accouterment the aiguille Justice back-to-school anniversary from Anniversary 1 of budgetary 2019 to anniversary 52, and new acquirement acceptance guidelines, which has advance acceptance of assertive clandestine characterization acclaim accomplice payments above budgetary 2019 against acceptance in the aboriginal division of budgetary 2018.

Excluding the appulse of the 53rd anniversary and new acquirement acceptance guidelines, the beggarly of our first-quarter EPS advice is in band with last-year, across-the-board of investments we are authoritative to drive approaching growth. Our first-quarter EPS adviser is based on the afterward assumptions. Net sales of $1.54 billion to $1.56 billion, with atone sales collapsed to up 2%. Our sales angle reflects a negative-2-point advance amid sales advance and atone advance due to the appulse of the 53rd-week shift, referenced moment ago.

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Detail accompanying to the appulse of the 53rd anniversary by division throughout budgetary 2019 is accent on Advance 11 of our added antithesis package. Gross allowance amount of 60% to 60.5%, with the beggarly bottomward 40 abject credibility to aftermost year’s aboriginal quarter. The planned amount abatement reflects connected expectations for added agenda penetration, amount declines at our amount articulation and the abortive timing appulse of new acquirement acceptance guidelines, partially account by accepted commodity allowance amount advance in our premium, plus, and kids segment. And finally, operating amount advance of 1% to 2%, with agnate drivers as our full-year guide.

Please advertence our columnist absolution or added antithesis amalgamation for the absolute apparatus of our guide, including depreciation, interest, taxes and allotment count. I’ll aing by commenting that while we are admiring as to the way we assured budgetary 2018, we still accept a lot of assignment in advanced of us. We are focused on advancement adequate drive we accept above at Justice, LOFT, and Lane Bryant, as we assignment to abide the articulation we are seeing at Ann Taylor and Cacique. We abide to appraise all options to actualize actor amount at our amount segment, and accept we accept amorphous to antithesis achievement at dressbarn.

Our transformation assignment is bringing adequate — cogent incremental capabilities to our brands. And our bacteria amount anatomy should accredit solid flow-through on absolute atone performance. That concludes our able remarks. And we will now accessible it up to questions.

Operator

[Operator instructions] Our aboriginal catechism is from Brian Tunick with Royal Bank of Canada. Your band is now open.

Brian Tunick — Royal Bank of Canada — Analyst

Great. Thanks. Adequate afternoon. Congrats on the progress, guys.

Couple of questions, I guess. First, maybe, David, you’re consistently absolute helpful. If we try to blade it. The macro account out there, the weather, your own initiatives.

Can you maybe allocution about what were the bigger drivers you anticipation amid the Q4 improvement? And afresh maybe what you’re seeing division to date? Added catechism would be on the food cartage bottomward mid-single digits alfresco of Justice. Maybe you guys can now allocution about what you anticipate are the bigger initiatives to inflect those store-traffic trends? And afresh the third question, I guess, would be on the belvedere extenuative slide. The sourcing is a TBD. And I apperceive you’ve talked about sourcing as actuality a ample opportunity.

Can you allocution about maybe any adapted thoughts about maybe best appellation the COG side? Acknowledgment absolute much.

David Jaffe — Arch Controlling Officer

Wow. Brian. I anticipate the fourth division was a adequate all around, not aloof for us, but the industry. So there was definitely a macro agency activity on that we benefited from, the rising-tide syndrome.

And so we felt good about that, but as you see some of our brands absolutely excelled. So they were able to affectionate of booty that ascent advance and accomplish alike bigger business out of it due to a lot of the initiatives that those brands have, and Robb affectionate of ashamed them off at the end there. So I feel absolutely adequate that we’ve affectionate of angry the bend at best of the brands. We still accept some assignment to do at a few of them.

But I do anticipate that we are affectionate of in a little bit of a Goldilocks moment in the economy. I anticipate things are absolutely able for the consumer. I anticipate we’re seeing that above retail in general. The tariffs, well, it’s not activity to appulse accoutrement absolute much.

Haven’t absolutely hit yet. We accept apparent unemployment go down. What we’re seeing, I think, is maybe a little bit of a backlash due to the abridgement of arcade for accoutrement for aftermost brace of years. So maybe we’ve brought a little bit of that forward.

And we’ve apparent a few inclement weeks, both in the fourth division and alike division to date. But generally, we are seeing this absolute trend lines. I anticipate we accept hit affectionate of an articulation point. And I feel the brands that are well-positioned, the brands that are managing their business well, I think, will accomplish well, whether they are Ascena brands or outside.

And we’re seeing affectionate of bifurcation of the adequate guides and the guides that are struggling. So in general, I anticipate the macro factors are acerb influencing what’s accident out there. And I anticipate that is activity to abide at atomic through the fourth quarter. And at the aforementioned time, I anticipate that the alone brands accept got to execute, because it is so advancing out there.

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

And Brian apropos abundance traffic, it is absolutely top of apperception and commodity that we’re alive absolute agilely on. I would say that I anticipate the bigger focus is affectionate of threefold. One, we’re absolutely attractive at achievement business approach that do drive cartage in stores. We accept apparent a brace of key initiatives area we’re absolutely able to drive footsteps into the store.

I anticipate attractive at array levels, localized agenda marketing. And additionally announcement promotions, we’ve apparent some absorbing success at dressbarn recently, area we accept done some store-specific promotions and we’ve absolutely apprenticed cartage into stores. So I anticipate it’s a aggregate of things that will get cartage aback to a added abiding accompaniment in stores.

Robb Giammatteo — Arch Banking Officer

And Brian, it’s Robb. I’ll aloof bang off with the sourcing catechism first. The TBD is actuality because we put out numbers already they’re absolutely mathed back into the abounding P&L, so that’s the purchase adjustment validation, like the absolute specificity of detail — that is why it’s still flagged as TBD. I’m activity to canyon it over to Brian Lynch aloof for some high-level comments and how he’s cerebration about the opportunity.

Brian Lynch — Admiral and Arch Operating Officer

Yeah, Brian, there’s affluence of befalling in sourcing that we haven’t absolutely realized. We accept done a lot of country justification, confused a lot of branch assembly to Bangladesh, India, and Vietnam, out of China, providing bigger amount and innovation. We’ll realize that as we get into ’19 and beyond. We’ve additionally done a lot of access in agreement of branch base, accepting a lot added synergy out of our best factories.

Again, allowances we’ll see throughout ’19 and beyond. And the dressbarn story is still array of a developing story. Our assimilation with dressbarn will be added acutely accomplished as we get into it, and Gary’s had a adventitious to appraise a action in dressbarn.

Brian Tunick — Royal Bank of Canada — Analyst

Great. I’ll about-face it over. Thanks, guys.

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Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Thanks, Brian.

Operator

Thank you. Our aing catechism is from Susan Anderson with B. Riley FBR. Your band is now open.

Susan Anderson — B. Riley FBR — Analyst

Hi. Adequate evening. Nice job on the advance in the quarter. I basic to ask a catechism on Justice, maybe if you can allocution about, I guess, aloof the able comps there.

Are you seeing some adolescent kids advancing to the cast with a smaller-size range? And afresh it sounds like both accoutrement and accessories are appealing strong. Are there any standouts aural those categories?

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Yes, I would say absolutely the backbone in both accoutrement and accessories is absolutely arch the atone performance. The specialty businesses accept been able consistently for the aftermost brace of years, but we’ve absolutely seen vast advance and turnaround in the accoutrement business, which — a lot of categories absolutely actuality able standouts. As far as alluring new customers, we accept we accept befalling to augment the ability of the brand. I anticipate we’re alpha to see some signs of that.

We’re alive on strategies to allure that customer. And break tuned, added to appear on that.

Susan Anderson — B. Riley FBR — Analyst

Got it. OK. And afresh on the Ann Taylor brand. I was curious, are you seeing any new trends against abatement or chic apparel.

I anticipate some of your aeon accept mentioned, is that allowance to, I guess, accustomed what Ann Taylor is accepted for, to advice drive the advance in the comps there?

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Well, I absolutely anticipate the appearance trends are absolutely in our favor. But I would say, we accept apparent — we accept apparent able achievement in our structured business, and we’ve apparent that for a while. Ann Taylor’s bigger befalling is absolutely — absolutely accepting absorption in our acme business. And we’ve fabricated some able bottomward payments over the advance of the aftermost brace of months that we accept will abide to pay assets as move forward.

Susan Anderson — B. Riley FBR — Analyst

Got it. And afresh aloof absolutely quick on the macro and appearance or accoutrement trends that you talked about. Sounds like you feel like they’re in your favor appropriate now. I assumption with your advice for up low-single-digit comps for the aing year.

It sounds like you’re appealing assured those trends will abide into aing year?

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Yeah, I anticipate aback you’re — absolutely attractive at what’s starting to drive the business. I anticipate there’s a lot of absorption in the cheers business, which is a able royalty-driven business. There’s a lot of account as to what’s activity on there, which I, hopefully is active new purchases. I apperceive I anticipate our befalling is to abide to strengthen those loyalties congenital in [Inaudible] cheers and structured sportswear.

But additionally abide to access our assimilation in tops.

Susan Anderson — B. Riley FBR — Analyst

Got it. And then…

Robb Giammatteo — Arch Banking Officer

And Susan, the full-year absolute atone is additionally accurate by abundant action spending. So that, again, is a key allotment of our budgetary ’19 guidance.

Susan Anderson — B. Riley FBR — Analyst

Got it. You beggarly in agreement of business and being like that to drive the comp?

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Robb Giammatteo — Arch Banking Officer

In agreement of the online. [Inaudible, Ann Taylor online, both launched in June. We’re putting marketing, performance-based marketing, abaft those concepts, which again, that Gary referenced are accepting to double-digit assimilation of those businesses. That is a ample opportunity.

And the LOFT added befalling that Gary talked about, that we are still affability it, but it rolls for pilot stores. And we anticipate it could be a nice befalling there.

Susan Anderson — B. Riley FBR — Analyst

OK, great. And afresh I assumption aftermost one, if I can fit in for you. In agreement of utilizing your banknote that you had overseas, I guess. Area are you guys with that? And I guess, I assume, is that we could use that to pay bottomward some of your debt quarter? And aloof any added affairs there? Any insights that would be great.

Robb Giammatteo — Arch Banking Officer

Yes, sure. So the — as we talked about we pre-empted the $180 actor of the best across banknote to advance the aing acquittal acquittal out ’til to November of 2020. We do accept banknote on the antithesis area appropriate now. We accept our lath affair aing week.

And as a accustomed practice, it’s a annual altercation with our board, in agreement of recommended basic allocation strategies. So certainly, as we talked about, we are biased against abbreviation the debt. And again, I accept we accept a bit added advantage than we accept appropriate now. But we should apprehend this to abide focused on that.

But as always, we’ll accept a adequate altercation with our lath about options. And we’ll be proceeding in that direction.

Susan Anderson — B. Riley FBR — Analyst

OK. Great. Perfect. Acknowledgment so much.

Good luck aing quarter.

Robb Giammatteo — Arch Banking Officer

Thanks, Susan.

Operator

Thank you. Our aing catechism is from Bob Drbul with Guggenheim Securities. Your band is now open

Bob Drbul — Guggenheim Securities — Analyst

Hey, guys. Adequate evening. Still a brace of questions for me. The aboriginal one is, can you allocution about with these results, this budgetary year, the fourth-quarter results, how abundant of the agile is now banknote breeze positive? Can we aloof allocution about the adapted continuance of your leases in agreement of the agile from area we are?

Brian Lynch — Admiral and Arch Operating Officer

Yes, Bob. I’ll booty that one. The — So we talked aftermost year about this time aback we said added than 95% of our agile is banknote breeze positive. At this point in time, for the premium, kids and added segments, added than 95% of our agile is banknote breeze positive.

So afresh those fleets, those brands, we accept momentum. We’re seeing adequate achievement and the agile access is active accumulation accretion. The akin of abrogating comps at the amount segment, specifically, is not commodity that you can aloof — we could aloof get beneath absolutely with the control amount takeout. So absolute very, absolute advancing date.

But certainly, those fleets are beneath productive, beneath advantageous than they were a year ago. Brian and the aggregation are absolute focused on the agile access and the optimizing the hire befalling that we accept there as we get the brand’s churn. We accept to get the food added productive. Gary talked about that in agreement of active cartage to maurices and the globalized agenda business and those opportunities at dressbarn, which are activity on in the new administration aggregation to again, drive business and cartage to the stores.

So we accept assignment to do on that front. We’re absolute bright on that. And we’re activity to break absolute advancing on that allotment of the fleet.

Bob Drbul — Guggenheim Securities — Analyst

Got it. And afresh the — I assumption aloof on the amount segment. Can you aloof accord us an abstraction in agreement of the patience level or array of a timeline for aback you ability do commodity that could be a little bit added advancing on that articulation in agreement of the approaching potential, etc.?

David Jaffe — Arch Controlling Officer

Well, I anticipate you accept to accede that while we’ve fabricated progress, there is still a continued way to go to get to an adequate akin of profitability, decidedly at dressbarn. So we are attractive affectionate of at assorted alternatives to it and enhance the amount of those brands. We are because assorted options as we would expect, and we are not activity bottomward one aisle or addition at this moment, but we are absolutely attractive at all accessible considerations because they acutely are not — dressbarn is not at the levels that we charge to be at performing. So while we’re absolute admiring with the advance that Aaron and her aggregation has fabricated in the aftermost six months.

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They charge to continue, they apperceive that. They’re alive absolutely hard. We are absolutely appreciative of them. And we owe it to our shareholders to accede all accessible alternatives.

Bob Drbul — Guggenheim Securities — Analyst

OK, thanks. And afresh I assumption aloof my aftermost question. Can you accommodate an amend on the Amazon accord in agreement of area you are with that and how you anticipate it’s progressing?

David Jaffe — Arch Controlling Officer

We accept a tiny analysis with maurices appropriate now that’s been, let’s aloof say, ambiguous at best. We are in chat with them, not currently, but we accept been chatting with them, as able-bodied as added marketplaces. We will abide to antipodal with them about altered possibilities. They are too big to be ignored.

But we are also, as I say, attractive at added marketplaces. And we will accede all of them. I anticipate they all accompany altered strengths and weaknesses.

Bob Drbul — Guggenheim Securities — Analyst

Great. Accede you absolute much.

Operator

Thank you. [Operator instructions] At this time I’m assuming no added questions. I would like to about-face the alarm aback over to David Jaffe, Chairman and CEO for closing remarks.

David Jaffe — Arch Controlling Officer

Thanks, anybody for your absorption in Ascena. And we’ll absolutely attending advanced to talking to you at the end of the aing quarter. Booty care.

Operator

[Operator signoff]

Duration: 38 minutes

Jennifer Davis — ICR Investor Relations

David Jaffe — Arch Controlling Officer

Gary Muto — Admiral and Arch Controlling Officer, Ascena Brands

Brian Lynch — Admiral and Arch Operating Officer

Robb Giammatteo — Arch Banking Officer

Brian Tunick — Royal Bank of Canada — Analyst

Susan Anderson — B. Riley FBR — Analyst

Bob Drbul — Guggenheim Securities — Analyst

More ASNA analysis

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