Ascena Retail FY 4Q16 Earnings Call Notes

Ascena Retail Group’s (ASNA) CEO David Jaffe on Q4 2016 Results

The world is a different place than it was when we made our comp assumptions

” let me just, at a high level to say that, when we made that assumption or that guidance or those goals, I think the world is a little bit of a different place. I think what we are seeing specifically [indiscernible] is a very cautious consumer, with respect to apparel spending. And all of you are smart guys and read all the same articles and the reports that I do. It’s tough out there. There is no question that the female apparel shopper has pulled back. We have all seen the reports and so we can’t really put our finger on what it is that has brought her back from where she was, in terms of her spending. And as we look out, we keep [indiscernible] and saying are these trends secular or cyclical, and I wanted to think that they were simply timing issues. It was very cyclical, and it would come back. And what we saw this season is, maybe some of it is a little secular. And so we are trying to rebalance our business model to understand and incorporate those changes that we are seeing from our customer.”

Not clear that stores don’t still have a role

“So I will go first on the second question, and that’s a really tough one, because as we develop our omnichannel model, Dana, we think that our stores still have a role. So the easy answer is, oh shut all your stores and move everything online. I don’t know if that’s the right answer. So we are developing better systems, better analysis that will enable us to understand the impact that a store has in a market on omnichannel sales, online sales and vice versa. So just to give you a quick kneejerk, when we open up a new store, we find that our online sales in that market go up. So that’s important information. So what happens is when we close a store in the market, do they go down, can we transfer some of those store sales online. So that’s the analysis that we are working through, and we will use that to help us determine how many stores we need in a particular market, and by inference in the fleet.”

Robb Giammatteo

Don’t think we should be materially impacted by Hanjin

“And Dana, your question on Hanjin; we have no direct relationship with Hanjin for our Ascena Global Sourcing Network; so pretty modest exposure. There are some relationships Hanjin has with other operators with alliances. But we think our direct source business is relatively isolated, and not going to be impacted materially.”