Ariana Research
Long/short equity, deep value, special situations

Ascena Thesis Reaffirmed: Positive Developments, Undervalued Business Point To Substantial Upside

On 9/24/2013, Ascena Retail Group, Inc. (NASDAQ:ASNA) ("Ascena", "ASNA" or the "Company") reported its Q4 results, which were quite favorable, ultimately leading to the share price increasing over 15% from our initial recommendation. As evidenced in the previous quarter's performance, we believe the Company is "hitting its stride" with accretive results from its Charming Shoppes acquisition as they begin to creep through.

Overall, the quarter was highly positive, with same-store sales up 4% for the year, driven by a 2% same-stores sales growth within its physical store base and an impressive 30% sales growth among its e-commerce segment. Total revenues reached $4.7B in FY2013, compared with $3.3B in the prior year. Gross margins were also favorably impacted, expanding

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