NEW YORK — NEW YORK (AP) — Shares of Ascena Retail Group Inc. jumped before Wednesday's opening bell after the company reported significantly better than expected results for its most recent quarter.
In premarket trading, Ascena shares rose $1.80, or 10 percent, to $19.12.
The company, based in Suffern, N.Y., owns the Justice, maurices, dressbarn and Catherines retail chains. It acquired Charming Shoppes Inc. in June 2012 to add plus-size women's clothing chain Lane Bryant. It later shed brands it didn't want, such as Fashion Bug, in an effort to reshape its business.
Ascena got a boost from the acquisition, as well as improved gross margins as it marked down fewer items, particularly at its dressbarn and Catherines chains.
After the market closed Tuesday, the company posted an adjusted profit of 34 cents per share, while analysts expected 20 cents per share. Revenue totaled $1.2 billion, beating average predictions of $1.15 billion.
Citi analyst Oliver Chen backed his "Neutral" rating for the stock, saying that the company has done a good job of boosting revenue at stores open at least a year and posting strong margins, despite a slight decrease in store traffic. But he said that concerns about whether Ascena's esults will be able to exceed its own guidance, along with customer and overall economic concerns, keep him from recommending that investors pick up shares.
Ascena shares closed Tuesday at $17.32, down about 6 percent since the start of the year. The stock has traded between $15.95 and $21.82 in the past 52 weeks.