A Closer Look at Ascena Retail Group Inc (NASDAQ:ASNA)


Ascena Retail Group Inc (NASDAQ:ASNA) is down for the year but the stock has had a healthy bump since July. However, some volatile trading has appeared across the price as well. ASNA is a part of the retail section that has attracted the bears: fashion and specialty retails apparel.

ASNA is working to rebound and making strides to fight against this slump with some management restructuring and new modified business plans that the company bill as a “reset.” This last segment came recently and some traders are seeing value in the stock returning to some form as the holiday season looms.

Ascena Retail Group Inc (NASDAQ:ASNA) is a leading specialty retailer offering apparel, shoes and accessories for women through our Premium Fashion Segment (Ann Taylor, LOFT and Lou & Grey), the Value Fashion Segment (dressbarn and maurices), the Plus Fashion Segment (Lane Bryant and Catherines), and for tween girls under the Kids Fashion Segment (Justice). ascena retail group, inc. operates e-commerce websites and approximately 4,800 stores throughout the United States, Canada and Puerto Rico.

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Here is some news from the company’s recent press:

Effective today, Gary Muto has been appointed to the newly created position of President and CEO of ascena Brands, with responsibility for reinvigorating and driving top-line growth across ascena’s full brand portfolio. Mr. Muto will continue to lead the Company’s Premium Fashion segment, and will now also provide strategic direction and leadership for the Company’s Plus, Value and Kids Fashion segments. Mr. Muto’s new role complements the enterprise platform support responsibilities held by Brian Lynch, who has been elevated to President and Chief Operating Officer of ascena retail group. Mr. Lynch will continue to have responsibility for the Company’s operating platform and infrastructure, and will remain focused on the development and delivery of top-tier enterprise capabilities in supply chain, technology, product sourcing, real estate, and non-merchandise procurement in support of the Company’s brand portfolio. Both Mr. Muto and Mr. Lynch will continue to report to David Jaffe, Chairman and Chief Executive Officer of ascena retail group.

David Jaffe commented, “To date, our Change for Growth transformation program has focused on the ‘change’ piece – a complete organizational reset with an emphasis on efficiency that we expect to deliver $250 to $300 million in cost savings through fiscal 2019. We are confident we will meet or exceed this cost takeout target, and are now turning to the ‘growth’ piece of our transformation.”

Jaffe continued, “Our new executive management structure will enable faster decision making, accelerate implementation of company-wide initiatives, and foster greater accountability. Our segment teams will benefit from Gary’s deep knowledge of fashion merchandising, customer experience, and brand management as they work to reinvigorate and drive growth at our brands. And the continued maturity of our shared services platform under Brian’s leadership will enable our brands to meet evolving customer expectations and drive enterprise value.”

For ASNA, the company now has $300.1 Million of cash on the books. You can get a sense of how sustainable that is by a levered free cash flow of $268.1 Million over the past twelve months. Generally speaking, earnings are expected to grow in coming quarters. Analysts are forecasting earnings of $-0.03 on a per share basis this quarter. Perhaps, that suggests something about why 96.36% of the outstanding share supply is held by institutional investors.

Ascena Retail Group Inc (NASDAQ:ASNA) is getting some value busy at this low-price and some analysts, as stated above, believe that sales will soon rise. The company is now carrying a $505.86M market cap with 195M shares out. We wil be watching the volume this week to see if the company starts to fight against the bearish sentiment that has plagued it since earlier this year. For continuing coverage on shares of $ASNA stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $ASNA, either long or short, and we have not been compensated for this article.


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