ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or other jurisdiction of incorporation or organization)
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30-0641353
(I.R.S. Employer Identification No.)
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933 MacArthur Boulevard, Mahwah, New Jersey
(Address of principal executive offices)
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07430
(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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The NASDAQ Stock Market LLC
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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Fiscal 2015
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Fiscal 2014
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Fiscal 2013
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||||||
Net sales:
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(millions)
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||||||||||
Justice
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$
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1,276.8
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$
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1,384.3
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$
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1,407.4
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Lane Bryant
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1,095.9
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1,080.0
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1,050.1
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|||
maurices
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1,060.6
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971.4
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917.6
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dressbarn
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1,023.6
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1,022.5
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1,020.7
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Catherines
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346.0
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332.4
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319.1
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Total net sales
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$
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4,802.9
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$
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4,790.6
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$
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4,714.9
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Fiscal 2015
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Fiscal 2014
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Fiscal 2013
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Operating (loss) income:
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(millions)
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||||||||||
Justice
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$
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(62.8
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)
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$
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99.3
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$
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182.3
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Lane Bryant
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(308.0
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)
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(4.3
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)
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(30.1
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)
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maurices
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125.9
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86.0
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107.0
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dressbarn
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10.7
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39.4
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30.3
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Catherines
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31.0
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24.4
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10.4
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Unallocated acquisition and integration expenses
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(31.7
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)
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(34.0
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)
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(34.6
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)
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Total operating (loss) income
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$
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(234.9
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)
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$
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210.8
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$
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265.3
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Type of Facility
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Justice
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Lane Bryant
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maurices
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dressbarn
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Catherines
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Total
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||||||
Strip Shopping Centers
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220
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400
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539
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605
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364
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2,128
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Free Standing, Downtown and Enclosed Malls
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547
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194
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345
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54
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7
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1,147
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Outlet Malls and Outlet Strip Centers
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112
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111
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49
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165
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3
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440
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Lifestyle Centers
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99
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60
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18
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—
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3
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180
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Total
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978
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765
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951
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824
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377
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3,895
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Fiscal 2015
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Justice
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Lane
Bryant
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maurices
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dressbarn
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Catherines
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Total
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||||||
Beginning of Period
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997
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771
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922
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820
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386
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3,896
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Opened
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30
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35
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41
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34
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—
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140
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Closed
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(49
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)
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(41
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)
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(12
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)
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(30
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)
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(9
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)
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(141
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)
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End of Period
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978
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765
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951
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824
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377
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3,895
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Fiscal 2014
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||||||||||||||||
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Justice
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Lane
Bryant
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maurices
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dressbarn
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Catherines
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Total
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Beginning of Period
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971
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788
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877
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826
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397
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3,859
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Opened
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49
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36
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55
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34
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—
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174
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Closed
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(23
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)
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(53
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)
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(10
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(40
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)
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(11
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(137
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)
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End of Period
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997
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771
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922
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820
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386
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3,896
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•
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Justice
segment
– www.shopjustice.com
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•
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Lane Bryant
segment
– www.lanebryant.com
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•
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maurices
segment
– www.maurices.com
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•
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dressbarn
segment
– www.dressbarn.com
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•
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Catherines
segment
– www.catherines.com
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Name
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Age
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Positions
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Elliot S. Jaffe
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89
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Co-founder and Non-Executive Chairman of the Board
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David Jaffe
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56
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President and Chief Executive Officer
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John Pershing
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44
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Executive Vice President, Chief Human Resources Officer
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Robb Giammatteo
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43
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Executive Vice President and Chief Financial Officer
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Ernest LaPorte
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63
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Senior Vice President, Chief Accounting Officer
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Gene Wexler
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60
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Former Senior Vice President, General Counsel and Assistant Secretary
(a)
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•
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unsuccessful, delayed, or more costly integration;
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•
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demands on management related to the increase in our size and the loss of key employees;
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•
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the diversion of management’s attention from the management of daily operations to the integration of operations;
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•
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expected cost savings not being achieved in full, or taking longer or requiring greater investment to achieve; and
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•
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not achieving the anticipated omni-channel growth potential.
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•
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financial or political instability in any of the countries in which our merchandise is manufactured, or the channels through which it passes;
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•
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fluctuations in the value of the U.S. Dollar against foreign currencies;
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•
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inability of our manufacturers to comply with local laws, including labor laws, health and safety laws or labor practices;
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•
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increased security and regulatory requirements applicable to imported goods;
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•
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imposition or increases of duties, taxes and other charges on imports;
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•
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imposition of new legislation relating to import quotas or other restrictions that may limit the quantity of our merchandise that may be imported into the United States from countries in regions where we do business;
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•
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impact of natural disasters and public health concerns on our foreign sourcing offices and vendor manufacturing operations;
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•
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delays in shipping due to port security considerations or labor disputes;
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•
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regulations under the United States Foreign Corrupt Practices Act; and
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•
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increased costs of transportation.
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•
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computer system failures, including but not limited to, inadequate system capacity, computer viruses, human error, change in programming, security breaches, system upgrades or migrations, Internet service, or power outages;
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•
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reliance on third-party computer hardware/software fulfillment and delivery providers;
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•
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unfavorable federal or state regulations and laws;
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•
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violations of federal, state or other applicable laws, including those related to online privacy;
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•
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disruptions in telephone service or power outages;
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•
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credit card fraud;
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•
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constantly evolving and changing technology;
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•
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liability for online content;
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•
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diversion of sales from our stores; and
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•
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natural disasters or adverse weather conditions.
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•
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identify suitable markets and sites for store locations;
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•
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address the different operational characteristics present in each country to which we expand, including employment and labor, transportation, logistics, real estate, lease provisions and local reporting or legal requirements;
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•
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negotiate acceptable lease terms, in some cases in locations in which the relative rights and obligations of landlords and tenants differ significantly from the customs and practices in the U.S.;
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•
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hire, train and retain competent store personnel;
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•
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gain and retain acceptance from foreign customers;
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•
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manage inventory effectively to meet the needs of new and existing stores on a timely basis;
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•
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expand infrastructure to accommodate growth;
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•
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manage foreign government regulations;
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•
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manage foreign currency exchange risk effectively; and
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•
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achieve acceptable operating margins from new stores.
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Fiscal Years
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Leases Expiring
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Number with
Renewal Options
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Number without
Renewal Options
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2016
|
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636
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225
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411
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2017
|
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680
|
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368
|
|
312
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2018
|
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625
|
|
393
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232
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2019
|
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478
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315
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163
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2020
|
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346
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|
207
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139
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2021 and thereafter
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1,130
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497
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|
633
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Total
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3,895
|
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2,005
|
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1,890
|
|
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Fiscal 2015
|
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Fiscal 2014
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||||
Fiscal
|
|
High
|
|
Low
|
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High
|
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Low
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First Quarter
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$17.54
|
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$11.85
|
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$20.94
|
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$16.15
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Second Quarter
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$13.51
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$10.52
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$23.14
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$19.43
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Third Quarter
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$15.36
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$11.52
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$19.99
|
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$16.37
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Fourth Quarter
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$17.41
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$12.56
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$18.25
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$15.94
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Period
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Total
Number of
Shares
Purchased
|
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Average Price
Paid per
Share
|
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Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(a)
|
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Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(a)
|
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||||
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Month # 1 (April 26, 2015 – May 23, 2015)
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—
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$—
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|
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—
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|
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$90 million
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Month # 2 (May 24, 2015 – June 27, 2015)
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|
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—
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$—
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|
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—
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|
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$90 million
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Month # 3 (June 28, 2015 – July 25, 2015)
|
|
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—
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$—
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|
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—
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$90 million
|
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•
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Overview.
This section includes recent developments, our objectives and risks, and a summary of our financial performance for Fiscal 2015. In addition, this section includes a discussion of recent developments and transactions affecting comparability that we believe are important in understanding our operational results and financial condition, and in anticipating future trends.
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•
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Results of operations.
This section provides an analysis of our operational results for Fiscal 2015, Fiscal 2014 and Fiscal 2013.
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•
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Financial condition and liquidity.
This section provides an analysis of our cash flows for Fiscal 2015, Fiscal 2014 and Fiscal 2013, as well as a discussion of our financial condition and liquidity as of July 25, 2015. The discussion of our financial condition and liquidity includes (i) our available financial capacity under our revolving credit agreement, (ii) a summary of our outstanding debt and commitments as of July 25, 2015, (iii) debt incurred subsequent to July 25, 2015 in connection with the ANN Acquisition and (iv) a summary of our contractual and other obligations as of July 25, 2015.
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•
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Market risk management.
This section discusses how we manage our risk exposures related to interest rates, foreign currency exchange rates and our investments, as well as the underlying market conditions as of July 25, 2015.
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•
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Critical accounting policies.
This section discusses accounting policies considered to be important to our operational results and financial condition, which require significant judgment and estimation on the part of management in their application. In addition, all of our significant accounting policies, including our critical accounting policies, are summarized in Note 3 to our accompanying consolidated financial statements.
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•
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Recently issued accounting pronouncements.
This section discusses the potential impact to our reported operational results and financial condition of accounting standards that have been recently issued.
|
•
|
Net sales and gross margin rate for Fiscal 2015 were essentially flat;
|
•
|
Combined comparable sales decreased
1%
, with store comparable sales down
3%
and ecommerce sales up
15%
;
|
•
|
$306.4 million
of impairment losses related to goodwill and a trade name at
Lane Bryant
were recognized in Fiscal 2015;
|
•
|
Establishment of a legal reserve of approximately $50 million in connection with the
Justice
pricing lawsuits;
|
•
|
Operating loss of
$234.9 million
, compared to operating income of
$210.8 million
for Fiscal 2014; and
|
•
|
Net loss per diluted share of
$1.46
, compared to net income per diluted share of
$0.81
for Fiscal 2014.
|
•
|
We were in a net cash and investments position (total cash and cash equivalents, plus short-term investments, less total debt) of
$138.0 million
as of the end of Fiscal 2015, compared to
$15.3 million
as of the end of Fiscal 2014;
|
•
|
Cash from operations was
$431.3 million
for Fiscal 2015, compared to
$374.7 million
for Fiscal 2014;
|
•
|
We used
$312.5 million
for capital expenditures for Fiscal 2015, compared to
$477.5 million
for Fiscal 2014; and
|
•
|
Net repayments under our credit agreement totaled
$56.0 million
for Fiscal 2015, compared to net borrowings of
$36.4 million
for Fiscal 2014.
|
•
|
Impairment of goodwill and trade name related to
Lane Bryant
in Fiscal 2015 and impairment of a trade name at
maurices
in Fiscal 2014;
|
•
|
Certain acquisition and integration expenses related to the integration of
Lane Bryant
and
Catherines
as well as certain transaction costs incurred in Fiscal 2015 related to the August 2015 acquisition of
ANN
;
|
•
|
Establishment of a legal reserve in connection with the
Justice
pricing lawsuits; and
|
•
|
Accelerated depreciation of fixed assets related to our integration initiatives and the closure of
Brothers
, a separate brand operating within our
Justice
segment which represented less than 1% of total ascena revenue for all periods presented.
|
|
Fiscal Years Ended
|
||||||||||
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
(millions)
|
||||||||||
Impairment of
Lane Bryant
's goodwill and intangible assets (see Note 8)
|
$
|
(306.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Impairment of
maurices
' intangible assets (see Note 8)
|
—
|
|
|
(13.0
|
)
|
|
—
|
|
|||
Justice
Pricing Lawsuits (see Note 14)
|
(50.8
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration expenses
|
(31.7
|
)
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|||
Accelerated depreciation associated with the Company’s supply chain and technological integration efforts and the closure of
Brothers
(see Note 7)
|
(6.5
|
)
|
|
(8.6
|
)
|
|
(14.2
|
)
|
|||
Certain costs related to the closure of
Brothers
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|||
Non-cash inventory expense associated with the purchase accounting write-up of inventory to fair market value of
Lane Bryant
and
Catherines
|
—
|
|
|
—
|
|
|
(19.9
|
)
|
|||
Loss on extinguishment of debt (see Note 11)
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|||
Total
|
$
|
(397.3
|
)
|
|
$
|
(55.6
|
)
|
|
$
|
(78.0
|
)
|
•
|
in addition to operating income, we use this measure to evaluate our consolidated performance, the performance of our operating segments and to allocate resources and capital to our operating segments;
|
•
|
it eliminates the significant level of non-cash depreciation and amortization expense that resulted from the significant capital expenditures and acquisitions we have undertaken over the last few fiscal years;
|
•
|
it enhances investors' ability to analyze trends in our business and underlying cash flow capability; and
|
•
|
it is a significant performance measure in our annual incentive compensation programs.
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
|
July 28,
2012 |
|
July 30,
2011 |
||||||||||
|
(millions)
|
||||||||||||||||||
Adjusted EBITDA
|
$
|
374.1
|
|
|
$
|
438.4
|
|
|
$
|
495.8
|
|
|
$
|
438.9
|
|
|
$
|
391.9
|
|
Impairment of
Lane Bryant
's goodwill and intangible assets
|
(306.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition and integration expenses
|
(31.7
|
)
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|
(25.4
|
)
|
|
(12.3
|
)
|
|||||
Justice
Pricing Lawsuits
|
(50.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Certain costs related to the closure of
Brothers
|
(1.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Non-cash inventory expense associated with the purchase accounting write-up of inventory to fair market value
|
—
|
|
|
—
|
|
|
(19.9
|
)
|
|
(13.5
|
)
|
|
—
|
|
|||||
Depreciation and amortization expense
|
(218.2
|
)
|
|
(193.6
|
)
|
|
(176.0
|
)
|
|
(107.4
|
)
|
|
(89.8
|
)
|
|||||
Operating (loss) income
|
(234.9
|
)
|
|
210.8
|
|
|
265.3
|
|
|
292.6
|
|
|
289.8
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(6.0
|
)
|
|
(6.5
|
)
|
|
(13.8
|
)
|
|
(4.3
|
)
|
|
(2.5
|
)
|
|||||
Interest income and other income (expense), net
|
0.3
|
|
|
(0.8
|
)
|
|
0.4
|
|
|
4.7
|
|
|
1.1
|
|
|||||
Acquisition-related transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(14.0
|
)
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|
—
|
|
|
(4.0
|
)
|
|||||
(Loss) income from continuing operations before provision for income taxes
|
(240.6
|
)
|
|
203.5
|
|
|
242.6
|
|
|
279.0
|
|
|
284.4
|
|
|||||
Benefit (provision) for income taxes from continuing operations
|
3.8
|
|
|
(65.3
|
)
|
|
(87.4
|
)
|
|
(107.2
|
)
|
|
(113.9
|
)
|
|||||
(Loss) income from continuing operations
|
(236.8
|
)
|
|
138.2
|
|
|
155.2
|
|
|
171.8
|
|
|
170.5
|
|
|||||
Loss from discontinued operations, net of taxes
|
—
|
|
|
(4.8
|
)
|
|
(3.9
|
)
|
|
(9.6
|
)
|
|
—
|
|
|||||
Net (loss) income
|
$
|
(236.8
|
)
|
|
$
|
133.4
|
|
|
$
|
151.3
|
|
|
$
|
162.2
|
|
|
$
|
170.5
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net sales
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
12.3
|
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
|
(2,133.7
|
)
|
|
(2,130.6
|
)
|
|
(3.1
|
)
|
|
0.1
|
%
|
|||
Cost of goods sold as % of net sales
|
|
44.4
|
%
|
|
44.5
|
%
|
|
|
|
|
|
|
|||
Gross margin
|
|
2,669.2
|
|
|
2,660.0
|
|
|
9.2
|
|
|
0.3
|
%
|
|||
Gross margin as % of net sales
|
|
55.6
|
%
|
|
55.5
|
%
|
|
|
|
|
|
|
|||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(856.9
|
)
|
|
(832.3
|
)
|
|
(24.6
|
)
|
|
3.0
|
%
|
|||
Buying, distribution and occupancy expenses as % of net sales
|
|
17.8
|
%
|
|
17.4
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
(1,490.9
|
)
|
|
(1,376.3
|
)
|
|
(114.6
|
)
|
|
8.3
|
%
|
|||
SG&A expenses as % of net sales
|
|
31.0
|
%
|
|
28.7
|
%
|
|
|
|
|
|
|
|||
Acquisition and integration expenses
|
|
(31.7
|
)
|
|
(34.0
|
)
|
|
2.3
|
|
|
(6.8
|
)%
|
|||
Impairment of goodwill
|
|
(261.7
|
)
|
|
—
|
|
|
(261.7
|
)
|
|
NM
|
|
|||
Impairment of intangible assets
|
|
(44.7
|
)
|
|
(13.0
|
)
|
|
(31.7
|
)
|
|
243.8
|
%
|
|||
Depreciation and amortization expense
|
|
(218.2
|
)
|
|
(193.6
|
)
|
|
(24.6
|
)
|
|
12.7
|
%
|
|||
Total other operating expenses
|
|
(2,904.1
|
)
|
|
(2,449.2
|
)
|
|
(454.9
|
)
|
|
18.6
|
%
|
|||
Operating (loss) income
|
|
(234.9
|
)
|
|
210.8
|
|
|
(445.7
|
)
|
|
(211.4
|
)%
|
|||
Operating (loss) income as % of net sales
|
|
(4.9
|
)%
|
|
4.4
|
%
|
|
|
|
|
|
|
|||
Interest expense
|
|
(6.0
|
)
|
|
(6.5
|
)
|
|
0.5
|
|
|
(7.7
|
)%
|
|||
Interest income and other income (expense), net
|
|
0.3
|
|
|
(0.8
|
)
|
|
1.1
|
|
|
(137.5
|
)%
|
|||
(Loss) income from continuing operations before provision for income taxes
|
|
(240.6
|
)
|
|
203.5
|
|
|
(444.1
|
)
|
|
(218.2
|
)%
|
|||
Benefit (provision) for income taxes from continuing operations
|
|
3.8
|
|
|
(65.3
|
)
|
|
69.1
|
|
|
(105.8
|
)%
|
|||
Effective tax rate
(a)
|
|
1.6
|
%
|
|
32.1
|
%
|
|
|
|
|
|
|
|||
(Loss) income from continuing operations
|
|
(236.8
|
)
|
|
138.2
|
|
|
(375.0
|
)
|
|
(271.3
|
)%
|
|||
Loss from discontinued operations, net of taxes
(b)
|
|
—
|
|
|
(4.8
|
)
|
|
4.8
|
|
|
(100.0
|
)%
|
|||
Net (loss) income
|
|
$
|
(236.8
|
)
|
|
$
|
133.4
|
|
|
$
|
(370.2
|
)
|
|
(277.5
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net (loss) income per common share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
0.86
|
|
|
$
|
(2.32
|
)
|
|
(269.8
|
)%
|
Discontinued operations
|
|
—
|
|
|
(0.03
|
)
|
|
0.03
|
|
|
(100.0
|
)%
|
|||
Total net (loss) income per basic common share
|
|
$
|
(1.46
|
)
|
|
$
|
0.83
|
|
|
$
|
(2.29
|
)
|
|
(275.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net (loss) income per common share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
0.84
|
|
|
$
|
(2.30
|
)
|
|
(273.8
|
)%
|
Discontinued operations
|
|
—
|
|
|
(0.03
|
)
|
|
0.03
|
|
|
(100.0
|
)%
|
|||
Total net (loss) income per diluted common share
|
|
$
|
(1.46
|
)
|
|
$
|
0.81
|
|
|
$
|
(2.27
|
)
|
|
(280.2
|
)%
|
|
|
Fiscal Years Ended
|
|
|
|
|
|
||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
1,276.8
|
|
|
$
|
1,384.3
|
|
|
$
|
(107.5
|
)
|
|
(7.8
|
)%
|
Lane Bryant
|
|
1,095.9
|
|
|
1,080.0
|
|
|
15.9
|
|
|
1.5
|
%
|
|||
maurices
|
|
1,060.6
|
|
|
971.4
|
|
|
89.2
|
|
|
9.2
|
%
|
|||
dressbarn
|
|
1,023.6
|
|
|
1,022.5
|
|
|
1.1
|
|
|
0.1
|
%
|
|||
Catherines
|
|
346.0
|
|
|
332.4
|
|
|
13.6
|
|
|
4.1
|
%
|
|||
Total net sales
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
12.3
|
|
|
0.3
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Store comparable sales
(a)
|
|
|
|
|
|
|
|
(3
|
)%
|
||||||
Ecommerce sales
|
|
|
|
|
|
|
|
|
|
|
15
|
%
|
|||
Combined comparable sales
(b)
|
|
|
|
|
|
|
|
|
|
(1
|
)%
|
(a)
|
Store comparable sales generally refers to the growth of sales in only stores open in the current period and comparative period in the prior year (including stores relocated within the same shopping center and stores with minor square footage additions). The determination of which stores are included in the store comparable sales calculation normally changes at the beginning of each fiscal year, except for stores that close during the fiscal year, which are excluded from store comparable sales beginning with the fiscal month the store actually closes.
|
(b)
|
The Company believes our ecommerce operations are interdependent with our brick-and-mortar store sales and, as such, we believe that reporting combined comparable sales on a brand-by-brand basis, as discussed below, is a more appropriate presentation.
|
•
|
a decrease of
$118.1 million
, or
10%
, in combined comparable sales during Fiscal 2015 mainly as a result of decreased store performance which was negatively impacted by reduced promotional activity;
|
•
|
a
$16.7 million
increase in non-comparable stores sales, as the positive effect of
30
new store openings was offset in part by
49
store closings in Fiscal 2015; and
|
•
|
a
$6.1 million
decrease in wholesale, licensing operations and other revenues.
|
•
|
an increase of
$19.7 million
, or
2%
, in combined comparable sales during Fiscal 2015;
|
•
|
a
$2.7 million
decrease in non-comparable stores sales, as the positive effects of
35
new store openings was more than offset by
41
store closings during Fiscal 2015; and
|
•
|
a
$1.1 million
decrease in other revenues.
|
•
|
an increase of
$49.5 million
, or
5%
, in combined comparable sales during Fiscal 2015;
|
•
|
a
$40.4 million
increase in non-comparable stores sales, primarily driven by an increase related to
29
net new store openings in Fiscal 2015; and
|
•
|
a
$0.7 million
decrease in other revenues.
|
•
|
a decrease of
$12.8 million
, or
1%
, in combined comparable sales during Fiscal 2015;
|
•
|
an
$11.3 million
increase in non-comparable stores sales, as the positive effect of
34
new store openings was offset in part by
30
store closings in Fiscal 2015; and
|
•
|
a
$2.6 million
increase in other revenues.
|
•
|
an increase of
$15.8 million
, or
5%
, in combined comparable sales during Fiscal 2015;
|
•
|
a
$4.2 million
decrease in non-comparable stores sales, primarily driven by a decrease related to
9
store closings in Fiscal 2015; and
|
•
|
a
$2.0 million
increase in other revenues.
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|||||||||
Operating (loss) income :
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
(62.8
|
)
|
|
$
|
99.3
|
|
|
$
|
(162.1
|
)
|
|
(163.2
|
)%
|
Lane Bryant
|
|
(308.0
|
)
|
|
(4.3
|
)
|
|
(303.7
|
)
|
|
7,062.8
|
%
|
|||
maurices
|
|
125.9
|
|
|
86.0
|
|
|
39.9
|
|
|
46.4
|
%
|
|||
dressbarn
|
|
10.7
|
|
|
39.4
|
|
|
(28.7
|
)
|
|
(72.8
|
)%
|
|||
Catherines
|
|
31.0
|
|
|
24.4
|
|
|
6.6
|
|
|
27.0
|
%
|
|||
Unallocated acquisition and integration expenses
|
|
(31.7
|
)
|
|
(34.0
|
)
|
|
2.3
|
|
|
(6.8
|
)%
|
|||
Total operating (loss) income
|
|
$
|
(234.9
|
)
|
|
$
|
210.8
|
|
|
$
|
(445.7
|
)
|
|
(211.4
|
)%
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 26,
2014 |
|
July 27,
2013 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net sales
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
|
$
|
75.7
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
|
(2,130.6
|
)
|
|
(2,137.7
|
)
|
|
7.1
|
|
|
(0.3
|
)%
|
|||
Cost of goods sold as % of net sales
|
|
44.5
|
%
|
|
45.3
|
%
|
|
|
|
|
|
|
|||
Gross margin
|
|
2,660.0
|
|
|
2,577.2
|
|
|
82.8
|
|
|
3.2
|
%
|
|||
Gross margin as % of net sales
|
|
55.5
|
%
|
|
54.7
|
%
|
|
|
|
|
|
|
|||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(832.3
|
)
|
|
(770.5
|
)
|
|
(61.8
|
)
|
|
8.0
|
%
|
|||
Buying, distribution and occupancy expenses as % of net sales
|
|
17.4
|
%
|
|
16.3
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
(1,376.3
|
)
|
|
(1,330.8
|
)
|
|
(45.5
|
)
|
|
3.4
|
%
|
|||
SG&A expenses as % of net sales
|
|
28.7
|
%
|
|
28.2
|
%
|
|
|
|
|
|
|
|||
Acquisition and integration expenses
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|
0.6
|
|
|
(1.7
|
)%
|
|||
Impairment of intangible assets
|
|
(13.0
|
)
|
|
—
|
|
|
(13.0
|
)
|
|
NM
|
|
|||
Depreciation and amortization expense
|
|
(193.6
|
)
|
|
(176.0
|
)
|
|
(17.6
|
)
|
|
10.0
|
%
|
|||
Total other operating expenses
|
|
(2,449.2
|
)
|
|
(2,311.9
|
)
|
|
(137.3
|
)
|
|
5.9
|
%
|
|||
Operating income
|
|
210.8
|
|
|
265.3
|
|
|
(54.5
|
)
|
|
(20.5
|
)%
|
|||
Operating income as % of net sales
|
|
4.4
|
%
|
|
5.6
|
%
|
|
|
|
|
|
|
|||
Interest expense
|
|
(6.5
|
)
|
|
(13.8
|
)
|
|
7.3
|
|
|
(52.9
|
)%
|
|||
Interest income and other (expense) income, net
|
|
(0.8
|
)
|
|
0.4
|
|
|
(1.2
|
)
|
|
(300.0
|
)%
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
(9.3
|
)
|
|
9.3
|
|
|
(100.0
|
)%
|
|||
Income from continuing operations before provision for income taxes
|
|
203.5
|
|
|
242.6
|
|
|
(39.1
|
)
|
|
(16.1
|
)%
|
|||
Provision for income taxes from continuing operations
|
|
(65.3
|
)
|
|
(87.4
|
)
|
|
22.1
|
|
|
(25.3
|
)%
|
|||
Effective tax rate
(a)
|
|
32.1
|
%
|
|
36.0
|
%
|
|
|
|
|
|
|
|||
Income from continuing operations
|
|
138.2
|
|
|
155.2
|
|
|
(17.0
|
)
|
|
(11.0
|
)%
|
|||
Loss from discontinued operations, net of taxes
(b)
|
|
(4.8
|
)
|
|
(3.9
|
)
|
|
(0.9
|
)
|
|
23.1
|
%
|
|||
Net income
|
|
$
|
133.4
|
|
|
$
|
151.3
|
|
|
$
|
(17.9
|
)
|
|
(11.8
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net income per common share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
0.86
|
|
|
$
|
0.99
|
|
|
$
|
(0.13
|
)
|
|
(13.1
|
)%
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
—
|
%
|
|||
Total net income per basic common share
|
|
$
|
0.83
|
|
|
$
|
0.96
|
|
|
$
|
(0.13
|
)
|
|
(13.5
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net income per common share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
0.84
|
|
|
$
|
0.95
|
|
|
$
|
(0.11
|
)
|
|
(11.6
|
)%
|
Discontinued operations
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
(0.01
|
)
|
|
50.0
|
%
|
|||
Total net income per diluted common share
|
|
$
|
0.81
|
|
|
$
|
0.93
|
|
|
$
|
(0.12
|
)
|
|
(12.9
|
)%
|
|
|
Fiscal Years Ended
|
|
|
|
|
|
||||||||
|
|
July 26,
2014
|
|
July 27,
2013 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
1,384.3
|
|
|
$
|
1,407.4
|
|
|
$
|
(23.1
|
)
|
|
(1.6
|
)%
|
Lane Bryant
|
|
1,080.0
|
|
|
1,050.1
|
|
|
29.9
|
|
|
2.8
|
%
|
|||
maurices
|
|
971.4
|
|
|
917.6
|
|
|
53.8
|
|
|
5.9
|
%
|
|||
dressbarn
|
|
1,022.5
|
|
|
1,020.7
|
|
|
1.8
|
|
|
0.2
|
%
|
|||
Catherines
|
|
332.4
|
|
|
319.1
|
|
|
13.3
|
|
|
4.2
|
%
|
|||
Total net sales
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
|
$
|
75.7
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Store comparable sales
(a)
|
|
|
|
|
|
|
|
(2
|
)%
|
||||||
Ecommerce sales
|
|
|
|
|
|
|
|
|
|
|
22
|
%
|
|||
Combined comparable sales
(b)
|
|
|
|
|
|
|
|
|
|
Flat
|
|
(a)
|
Store comparable sales generally refers to the growth of sales in only stores open in the current period and comparative period in the prior year (including stores relocated within the same shopping center and stores with minor square footage additions). The determination of which stores are included in the store comparable sales calculation normally changes at the beginning of each fiscal year, except for stores that close during the fiscal year, which are excluded from store comparable sales beginning with the fiscal month the store actually closes.
|
(b)
|
The Company believes our ecommerce operations are interdependent with our brick-and-mortar store sales and, as such, we believe that reporting combined store and ecommerce sales on a brand-by-brand basis, as discussed below, is a more appropriate presentation.
|
•
|
a decrease of $48.2 million, or 4%, in combined comparable sales during Fiscal 2014;
|
•
|
a $29.9 million increase in non-comparable stores sales, primarily driven by an increase related to 26 net new store openings in Fiscal 2014; and
|
•
|
a $4.8 million decrease in wholesale, licensing operations and other revenues.
|
•
|
an increase of $30.2 million, or 3%, in combined comparable sales during Fiscal 2014;
|
•
|
a $5.8 million decrease in non-comparable stores sales, as the positive effects of 36 new store openings was more than offset by 53 store closings during Fiscal 2014; and
|
•
|
a $5.5 million increase in other revenues.
|
•
|
an increase of $9.6 million, or 1%, in combined comparable sales during Fiscal 2014;
|
•
|
a $44.3 million increase in non-comparable stores sales, primarily driven by an increase related to 45 net new store openings in Fiscal 2014; and
|
•
|
a $0.1 million decrease in other revenues.
|
•
|
a decrease of $7.1 million, or 1%, in combined comparable sales during Fiscal 2014;
|
•
|
a $8.3 million increase in non-comparable stores sales, as the positive effect of 34 new store openings was only partially offset by 40 store closings in Fiscal 2014; and
|
•
|
a $0.6 million increase in other revenues.
|
•
|
an increase of $22.1 million, or 8%, in combined comparable sales during Fiscal 2014;
|
•
|
a $10.2 million decrease in non-comparable stores sales, primarily driven by a decrease related to 11 store closings in Fiscal 2014; and
|
•
|
a $1.4 million increase in other revenues.
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 26,
2014 |
|
July 27,
2013
|
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
99.3
|
|
|
$
|
182.3
|
|
|
$
|
(83.0
|
)
|
|
(45.5
|
)%
|
Lane Bryant
|
|
(4.3
|
)
|
|
(30.1
|
)
|
|
25.8
|
|
|
(85.7
|
)%
|
|||
maurices
|
|
86.0
|
|
|
107.0
|
|
|
(21.0
|
)
|
|
(19.6
|
)%
|
|||
dressbarn
|
|
39.4
|
|
|
30.3
|
|
|
9.1
|
|
|
30.0
|
%
|
|||
Catherines
|
|
24.4
|
|
|
10.4
|
|
|
14.0
|
|
|
134.6
|
%
|
|||
Unallocated acquisition and integration expenses
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|
0.6
|
|
|
(1.7
|
)%
|
|||
Total operating income
|
|
$
|
210.8
|
|
|
$
|
265.3
|
|
|
$
|
(54.5
|
)
|
|
(20.5
|
)%
|
|
|
July 25,
2015 |
|
July 26,
2014 |
|
$ Change
|
||||||
|
|
(millions)
|
|
|
||||||||
Cash and cash equivalents
|
|
$
|
240.6
|
|
|
$
|
156.9
|
|
|
$
|
83.7
|
|
Short-term investments
(a)
|
|
13.4
|
|
|
30.4
|
|
|
(17.0
|
)
|
|||
Total debt
|
|
(116.0
|
)
|
|
(172.0
|
)
|
|
56.0
|
|
|||
Net cash and investments
(b)
|
|
$
|
138.0
|
|
|
$
|
15.3
|
|
|
$
|
122.7
|
|
Equity
|
|
$
|
1,518.1
|
|
|
$
|
1,737.7
|
|
|
$
|
(219.6
|
)
|
(a)
|
Short-term investments include restricted cash of $13.4 million as of July 25, 2015 and $3.6 million as of July 26, 2014 which are included within Prepaid expenses and other current assets in the accompanying consolidated financial statements.
|
(b)
|
“Net cash and investments” is defined as total cash and cash equivalents, plus short-term investments, less total debt.
|
|
|
Fiscal Years Ended
|
||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
||||
|
|
(millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
431.3
|
|
|
$
|
374.7
|
|
Net cash used in investing activities
|
|
(298.1
|
)
|
|
(462.7
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(49.5
|
)
|
|
58.5
|
|
||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
83.7
|
|
|
$
|
(29.5
|
)
|
|
|
Fiscal Years Ended
|
||||||
|
|
July 26,
2014 |
|
July 27,
2013 |
||||
|
|
(millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
374.7
|
|
|
$
|
450.0
|
|
Net cash used in investing activities
|
|
(462.7
|
)
|
|
(272.2
|
)
|
||
Net cash provided by (used in) financing activities
|
|
58.5
|
|
|
(155.7
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(29.5
|
)
|
|
$
|
22.1
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Fiscal
2016
|
|
Fiscal 2017-
2018
|
|
Fiscal 2019-
2020
|
|
Fiscal 2021
and
Thereafter
|
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Long-term debt
|
|
$
|
—
|
|
|
$
|
116.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116.0
|
|
Interest payments on long-term debt
|
|
4.8
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
11.8
|
|
|||||
Operating leases
|
|
407.5
|
|
|
634.5
|
|
|
405.4
|
|
|
472.4
|
|
|
1,919.8
|
|
|||||
Inventory purchase commitments
|
|
850.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
850.3
|
|
|||||
Other commitments
|
|
16.0
|
|
|
2.6
|
|
|
2.4
|
|
|
6.5
|
|
|
27.5
|
|
|||||
Total
|
|
$
|
1,278.6
|
|
|
$
|
760.1
|
|
|
$
|
407.8
|
|
|
$
|
478.9
|
|
|
$
|
2,925.4
|
|
•
|
Long-term debt
represents mandatory repayments of outstanding borrowings under our Revolving Credit Agreement;
|
•
|
Interest payments on long-term debt
represent interest payments related to our Revolving Credit Agreement, which was calculated based on the outstanding balance and the interest rates in effect as of July 25, 2015, as if the borrowings remain outstanding until mandatory repayment is required at expiration in June 2018;
|
•
|
Operating lease obligations
represent the minimum lease rental payments for the Company's real estate and operating equipment in various locations around the world and does not include incremental rentals based on a percentage of sales. Although such amounts are generally non-cancelable, certain leases are cancelable if specified sales levels are not achieved. All future minimum rentals under these cancelable leases have been included in the above table. In addition to such amounts, the Company is normally required to pay taxes, insurance and occupancy costs relating to its leased real estate properties, which are not included in the table above; and
|
•
|
Inventory purchase commitments
represent the Company's agreements to purchase fixed or minimum quantities of goods at determinable prices. While a portion of these commitments may be canceled at the Company's option up to 30 days prior to the vendor’s scheduled shipment date, such commitments are generally not canceled and are included in the table above.
|
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Plan Category
|
|
Number of Securities
to be Issued upon
Exercise of
Outstanding Options
|
|
Weighted-Average
Exercise Price of
Outstanding Options
|
|
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column
(a)
)
|
||||
Equity compensation plans approved by security holders
|
|
14,103,932
|
|
|
$
|
14.13
|
|
|
8,329,838
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
14,103,932
|
|
|
$
|
14.13
|
|
|
8,329,838
|
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Agreement and Plan of Merger, dated as of May 1, 2012, among the Company, Colombia Acquisition Corp. and Charming Shoppes, Inc. is incorporated by reference to Exhibit 2.1 to the Form 8-K filed on May 2, 2012.
|
|
|
|
2.2
|
|
Agreement and Plan of Merger, dated as of May 17, 2015, among the Company, Avian Acquisition Corp. and ANN INC., is incorporated by reference to Exhibit 2.1 to the Form 8-K filed on May 18, 2015.
|
|
|
|
3.1
|
|
Second Amended and Restated Certificate of Incorporation of Ascena Retail Group, Inc. is incorporated by reference to Annex II to the Proxy Statement dated November 18, 2010.
|
|
|
|
3.2
|
|
Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Ascena Retail Group, Inc. is incorporated by reference to Exhibit 3.1 to the Form 8-K filed on January 3, 2011.
|
|
|
|
3.3
|
|
By-Laws of Ascena Retail Group, Inc., as amended and restated, are incorporated by reference to Exhibit 3.1 to the Form 8-K filed on March 6, 2015.
|
|
|
|
10.1
|
|
2010 Stock Incentive Plan is incorporated by reference to Annex A to the Proxy Statement dated November 9, 2012. *
|
|
|
|
10.2
|
|
Amended and Restated Executive 162(m) Bonus Plan, effective as of December 12, 2013, is incorporated by reference to Annex A to the Proxy Statement dated November 5, 2013. *
|
|
|
|
10.3
|
|
Employment Agreement dated May 2, 2002 with Elliot S. Jaffe is incorporated by reference to Exhibit 10(u)(u) to the Form 10-K filed for the fiscal year ended July 27, 2002. *
|
|
|
|
10.4
|
|
Amendment dated July 10, 2006 to Employment Agreement dated May 2, 2002 with Elliot S. Jaffe is incorporated by reference to Exhibit 99.1 to the Form 8-K filed on July 13, 2006. *
|
|
|
|
10.5
|
|
Employment Agreement dated March 5, 2014 with David Jaffe is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on March 6, 2014. *
|
|
|
|
10.6
|
|
Employment Letter dated January 23, 2015 with John Pershing, filed herewith as Exhibit 10.6.*
|
|
|
|
10.7
|
|
Employment Letter dated July 20, 2015 with Robb Giammatteo, filed herewith as Exhibit 10.7.*
|
|
|
|
10.8
|
|
Employment Letter dated July 26, 2005 with Gene Wexler is incorporated by reference to Exhibit 10.25 to the Form 10-K filed for the fiscal year ended July 30, 2005.*
|
|
|
|
10.9
|
|
Supplemental Retirement Benefit Agreement dated August 29, 2006 with Mrs. Roslyn Jaffe is incorporated by reference to Exhibit 99.1 to the Form 8-K filed on August 30, 2006.*
|
|
|
|
10.10
|
|
Executive Severance Plan, as amended and restated effective as of September 23, 2014, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on September 24, 2014. *
|
|
|
|
Exhibit
Number
|
|
Description
|
10.11
|
|
Form of Indemnification Agreement, adopted January 1, 2011, for Members of the Board of Directors and certain executive officers is incorporated by reference to Exhibit 10.24 to the Form 10-K filed for the fiscal year ended July 30, 2011. *
|
|
|
|
10.12
|
|
Amendment and Restatement Agreement dated as of July 24, 2015 and effective as of August 21, 2015, among the Company, the Borrowing Subsidiaries, the Loan Parties, the Lenders and JPMorgan Chase Bank, N.A., as Administrative Agent, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 27, 2015.
|
|
|
|
10.13
|
|
Term Credit Agreement dated as of August 21, 2015 among the Company, AnnTaylor Retail, Inc., the Lenders and Goldman Sachs Bank USA, as Administrative Agent, is incorporated by reference to Exhibit 10.2 to the Form 8-K filed on August 27, 2015.
|
|
|
|
14
|
|
Code of Ethics for the Chief Executive Officer and Senior Financial Officers is incorporated by reference to Exhibit 14 to the Form 10-K filed for the fiscal year ended July 26, 2003.
|
|
|
|
21
|
|
Subsidiaries of the Registrant, filed herewith.
|
|
|
|
23
|
|
Consent of Independent Registered Public Accounting Firm, filed herewith
|
|
|
|
31.1
|
|
Section 302 Certification of President and Chief Executive Officer, filed herewith
|
|
|
|
31.2
|
|
Section 302 Certification of Chief Financial Officer, filed herewith
|
|
|
|
32.1
|
|
Section 906 Certification of President and Chief Executive Officer, filed herewith
|
|
|
|
32.2
|
|
Section 906 Certification of Chief Financial Officer, filed herewith
|
101.INS
|
|
XBRL Instance Document†
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document†
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document†
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document†
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document†
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document†
|
|
|
Ascena Retail Group, Inc.
|
|
|
|
|
|
Date: September 16, 2015
|
|
by
|
/s/ DAVID JAFFE
|
|
|
|
David Jaffe
|
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ ELLIOT S. JAFFE
|
|
|
|
|
Elliot S. Jaffe
|
|
Non-Executive Chairman of the Board and Founder
|
|
September 16, 2015
|
|
|
|
|
|
/s/ DAVID JAFFE
|
|
|
|
|
David Jaffe
|
|
Director, President and Chief Executive Officer (Principal Executive Officer)
|
|
September 16, 2015
|
|
|
|
|
|
/s/ KATE BUGGELN
|
|
|
|
|
Kate Buggeln
|
|
Director
|
|
September 16, 2015
|
|
|
|
|
|
/s/ KLAUS EPPLER
|
|
|
|
|
Klaus Eppler
|
|
Director
|
|
September 16, 2015
|
|
|
|
|
|
/s/ RANDY L. PEARCE
|
|
|
|
|
Randy L. Pearce
|
|
Director
|
|
September 16, 2015
|
|
|
|
|
|
/s/ JOHN USDAN
|
|
|
|
|
John Usdan
|
|
Director
|
|
September 16, 2015
|
|
|
|
|
|
/s/ ROBB GIAMMATTEO
|
|
|
|
|
Robb Giammatteo
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
September 16, 2015
|
|
|
|
|
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/s/ ERNEST LAPORTE
|
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|
|
|
Ernest LaPorte
|
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
|
September 16, 2015
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
Consolidated Balance Sheets
|
F-
2
|
Consolidated Statements of Operations
|
F-
3
|
Consolidated Statements of Comprehensive (Loss) Income
|
F-
4
|
Consolidated Statements of Cash Flows
|
F-
5
|
Consolidated Statements of Equity
|
F-
6
|
Notes to Consolidated Financial Statements
|
F-
7
|
Reports of Independent Registered Public Accounting Firm
|
F-
38
|
Supplementary Information:
|
|
Quarterly Financial Information (Unaudited)
|
F-
40
|
Selected Financial Information
|
F-
41
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions, except per share data)
|
||||||||||
Net sales
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
Cost of goods sold
|
|
(2,133.7
|
)
|
|
(2,130.6
|
)
|
|
(2,137.7
|
)
|
|||
Gross margin
|
|
2,669.2
|
|
|
2,660.0
|
|
|
2,577.2
|
|
|||
|
|
|
|
|
|
|
||||||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(856.9
|
)
|
|
(832.3
|
)
|
|
(770.5
|
)
|
|||
Selling, general and administrative expenses
|
|
(1,490.9
|
)
|
|
(1,376.3
|
)
|
|
(1,330.8
|
)
|
|||
Acquisition and integration expenses
|
|
(31.7
|
)
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|||
Impairment of goodwill
|
|
(261.7
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of intangible assets
|
|
(44.7
|
)
|
|
(13.0
|
)
|
|
—
|
|
|||
Depreciation and amortization expense
|
|
(218.2
|
)
|
|
(193.6
|
)
|
|
(176.0
|
)
|
|||
Total other operating expenses
|
|
(2,904.1
|
)
|
|
(2,449.2
|
)
|
|
(2,311.9
|
)
|
|||
Operating (loss) income
|
|
(234.9
|
)
|
|
210.8
|
|
|
265.3
|
|
|||
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(6.0
|
)
|
|
(6.5
|
)
|
|
(13.8
|
)
|
|||
Interest income and other income (expense), net
|
|
0.3
|
|
|
(0.8
|
)
|
|
0.4
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(9.3
|
)
|
|||
(Loss) income from continuing operations before provision for income taxes
|
|
(240.6
|
)
|
|
203.5
|
|
|
242.6
|
|
|||
Benefit (provision) for income taxes from continuing operations
|
|
3.8
|
|
|
(65.3
|
)
|
|
(87.4
|
)
|
|||
(Loss) income from continuing operations
|
|
(236.8
|
)
|
|
138.2
|
|
|
155.2
|
|
|||
Loss from discontinued operations, net of taxes
(a)
|
|
—
|
|
|
(4.8
|
)
|
|
(3.9
|
)
|
|||
Net (loss) income
|
|
$
|
(236.8
|
)
|
|
$
|
133.4
|
|
|
$
|
151.3
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share - basic:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
0.86
|
|
|
$
|
0.99
|
|
Discontinued operations
|
|
—
|
|
|
(0.03
|
)
|
|
(0.03
|
)
|
|||
Total net (loss) income per basic common share
|
|
$
|
(1.46
|
)
|
|
$
|
0.83
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
||||||
Net (loss) income per common share – diluted:
|
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
|
$
|
(1.46
|
)
|
|
$
|
0.84
|
|
|
$
|
0.95
|
|
Discontinued operations
|
|
—
|
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|||
Total net (loss) income per diluted common share
|
|
$
|
(1.46
|
)
|
|
$
|
0.81
|
|
|
$
|
0.93
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
162.6
|
|
|
160.6
|
|
|
157.3
|
|
|||
Diluted
|
|
162.6
|
|
|
165.1
|
|
|
163.3
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions)
|
||||||||||
Net (loss) income
|
|
$
|
(236.8
|
)
|
|
$
|
133.4
|
|
|
$
|
151.3
|
|
Other comprehensive (loss) income, net of tax
:
|
|
|
|
|
|
|
|
|
|
|||
Net change in unrealized gains on available-for-sale investments
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|||
Foreign currency translation adjustment
|
|
(10.4
|
)
|
|
(1.0
|
)
|
|
(1.1
|
)
|
|||
Total other comprehensive (loss) income
|
|
(10.4
|
)
|
|
(1.0
|
)
|
|
0.1
|
|
|||
Total comprehensive (loss) income
|
|
$
|
(247.2
|
)
|
|
$
|
132.4
|
|
|
$
|
151.4
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Net (loss) income
|
|
$
|
(236.8
|
)
|
|
$
|
133.4
|
|
|
$
|
151.3
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization expense
|
|
218.2
|
|
|
193.6
|
|
|
176.0
|
|
|||
Deferred income tax benefit
|
|
(6.6
|
)
|
|
(17.8
|
)
|
|
(7.9
|
)
|
|||
Deferred rent and other occupancy costs
|
|
(39.1
|
)
|
|
(38.2
|
)
|
|
(36.2
|
)
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
9.3
|
|
|||
Gain on sale of assets
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|||
Non-cash stock-based compensation expense
|
|
18.2
|
|
|
30.6
|
|
|
29.5
|
|
|||
Non-cash impairment of tangible assets
|
|
10.8
|
|
|
4.2
|
|
|
4.6
|
|
|||
Non-cash impairment of goodwill
|
|
261.7
|
|
|
—
|
|
|
—
|
|
|||
Non-cash impairment of intangible assets
|
|
44.7
|
|
|
13.0
|
|
|
—
|
|
|||
Non-cash interest expense, net
|
|
0.9
|
|
|
1.3
|
|
|
1.7
|
|
|||
Other non-cash income, net
|
|
(2.4
|
)
|
|
(2.7
|
)
|
|
(5.7
|
)
|
|||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
(4.2
|
)
|
|
(14.1
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Inventories
|
|
63.9
|
|
|
(12.3
|
)
|
|
(10.1
|
)
|
|||
Accounts payable, accrued liabilities and income tax liabilities
|
|
54.2
|
|
|
32.8
|
|
|
67.6
|
|
|||
Deferred income
|
|
7.7
|
|
|
10.0
|
|
|
25.4
|
|
|||
Lease-related liabilities
|
|
32.6
|
|
|
46.2
|
|
|
39.5
|
|
|||
Other balance sheet changes, net
|
|
4.9
|
|
|
5.0
|
|
|
11.5
|
|
|||
Changes in net assets related to discontinued operations
|
|
—
|
|
|
(20.2
|
)
|
|
7.6
|
|
|||
Net cash provided by operating activities
|
|
431.3
|
|
|
374.7
|
|
|
450.0
|
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
|
(312.5
|
)
|
|
(477.5
|
)
|
|
(290.9
|
)
|
|||
Proceeds from the sale of assets
|
|
8.9
|
|
|
42.2
|
|
|
15.9
|
|
|||
Purchases of investments
|
|
(22.3
|
)
|
|
(27.5
|
)
|
|
(2.8
|
)
|
|||
Proceeds from sales and maturities of investments
|
|
27.8
|
|
|
0.1
|
|
|
5.6
|
|
|||
Net cash used in investing activities
|
|
(298.1
|
)
|
|
(462.7
|
)
|
|
(272.2
|
)
|
|||
|
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from borrowings
|
|
832.3
|
|
|
1,249.2
|
|
|
446.7
|
|
|||
Repayments of debt
|
|
(888.3
|
)
|
|
(1,212.8
|
)
|
|
(641.4
|
)
|
|||
Payment of deferred financing costs
|
|
(2.2
|
)
|
|
—
|
|
|
(3.8
|
)
|
|||
Proceeds from stock options exercised and employee stock purchases
|
|
8.7
|
|
|
17.9
|
|
|
28.7
|
|
|||
Excess tax benefits from stock-based compensation
|
|
—
|
|
|
4.2
|
|
|
14.1
|
|
|||
Net cash (used in) provided by financing activities
|
|
(49.5
|
)
|
|
58.5
|
|
|
(155.7
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
|
83.7
|
|
|
(29.5
|
)
|
|
22.1
|
|
|||
Cash and cash equivalents at beginning of period
|
|
156.9
|
|
|
186.4
|
|
|
164.3
|
|
|||
|
|
|
|
|
|
|
||||||
Cash and cash equivalents at end of period
|
|
$
|
240.6
|
|
|
$
|
156.9
|
|
|
$
|
186.4
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
AOCI
(a)
|
|
|
Total
Equity
|
||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(millions)
|
|||||||||||||||||||||
Balance, July 28, 2012
|
154.8
|
|
|
$
|
1.5
|
|
|
$
|
528.8
|
|
|
$
|
811.9
|
|
|
$
|
(1.3
|
)
|
|
$
|
1,340.9
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
151.3
|
|
|
—
|
|
|
151.3
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|||||
Cash settled LTIP conversion
(b)
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
|||||
Shares issued and equity grants made pursuant to stock-based compensation plans
(c)
|
4.7
|
|
|
0.1
|
|
|
70.9
|
|
|
—
|
|
|
—
|
|
|
71.0
|
|
|||||
Balance, July 27, 2013
|
159.5
|
|
|
$
|
1.6
|
|
|
$
|
592.8
|
|
|
$
|
963.2
|
|
|
$
|
(1.2
|
)
|
|
$
|
1,556.4
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
133.4
|
|
|
—
|
|
|
133.4
|
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|||||
Shares issued and equity grants made pursuant to stock-based compensation plans
(c)
|
2.3
|
|
|
—
|
|
|
49.4
|
|
|
—
|
|
|
—
|
|
|
49.4
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
|||||
Balance, July 26, 2014
|
161.8
|
|
|
$
|
1.6
|
|
|
$
|
642.2
|
|
|
$
|
1,096.1
|
|
|
$
|
(2.2
|
)
|
|
$
|
1,737.7
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(236.8
|
)
|
|
—
|
|
|
(236.8
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.4
|
)
|
|
(10.4
|
)
|
|||||
Shares issued and equity grants made pursuant to stock-based compensation plans
(c)
|
1.4
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
|
—
|
|
|
27.6
|
|
|||||
Balance, July 25, 2015
|
163.2
|
|
|
$
|
1.6
|
|
|
$
|
669.8
|
|
|
$
|
859.3
|
|
|
$
|
(12.6
|
)
|
|
$
|
1,518.1
|
|
(a)
|
Accumulated other comprehensive loss (“AOCI”) consists of foreign currency translation adjustments and net unrealized gains on available-for-sale securities.
|
(b)
|
Approximately
0.6 million
of performance and market-based shares were canceled and replaced with a corresponding amount of new awards that will be settled in cash with the underlying value reclassified to liabilities.
|
(c)
|
Includes excess tax benefits of approximately
$(1.2) million
in Fiscal 2015,
$4.2 million
in Fiscal 2014 and
$14.1 million
in Fiscal 2013 resulting from stock-based compensation arrangements.
|
Buildings and improvements
|
10-40 years
|
Distribution center equipment and machinery
|
3-20 years
|
Leasehold improvements
|
Shorter of the useful life or expected term of the lease
|
Furniture, fixtures, and equipment
|
2-10 years
|
Information technology
|
3-10 years
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
|
|
(millions)
|
||||||
Justice
|
|
$
|
136.0
|
|
|
$
|
198.6
|
|
Lane Bryant
|
|
126.5
|
|
|
125.6
|
|
||
maurices
|
|
103.8
|
|
|
105.5
|
|
||
dressbarn
|
|
93.3
|
|
|
97.1
|
|
||
Catherines
|
|
29.7
|
|
|
26.4
|
|
||
Total inventories
|
|
$
|
489.3
|
|
|
$
|
553.2
|
|
Level 1
|
Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2
|
Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
|
Level 3
|
Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques.
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
|
|
(millions)
|
||||||
Property and Equipment:
|
|
|
|
|
|
|
||
Land
|
|
$
|
30.4
|
|
|
$
|
33.1
|
|
Buildings and improvements
|
|
189.3
|
|
|
177.9
|
|
||
Leasehold improvements
|
|
652.7
|
|
|
604.0
|
|
||
Furniture, fixtures and equipment
|
|
572.7
|
|
|
545.7
|
|
||
Information technology
(a)
|
|
356.2
|
|
|
237.3
|
|
||
Construction in progress
(a)
|
|
148.6
|
|
|
156.8
|
|
||
|
|
1,949.9
|
|
|
1,754.8
|
|
||
Less: accumulated depreciation
|
|
(779.9
|
)
|
|
(644.2
|
)
|
||
Property and equipment, net
|
|
$
|
1,170.0
|
|
|
$
|
1,110.6
|
|
|
|
Justice
|
|
Lane Bryant
|
|
maurices
|
|
dressbarn
|
|
Catherines
|
|
Total
|
||||||||||||
|
|
(millions)
|
||||||||||||||||||||||
Balance at July 27, 2013
|
|
$
|
103.6
|
|
|
$
|
319.1
|
|
|
$
|
130.7
|
|
|
$
|
—
|
|
|
$
|
28.0
|
|
|
$
|
581.4
|
|
Acquisition-related activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at July 26, 2014
|
|
103.6
|
|
|
319.1
|
|
|
130.7
|
|
|
—
|
|
|
28.0
|
|
|
581.4
|
|
||||||
Impairment losses
(a)
|
|
—
|
|
|
(261.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(261.7
|
)
|
||||||
Balance at July 25, 2015
|
|
$
|
103.6
|
|
|
$
|
57.4
|
|
|
$
|
130.7
|
|
|
$
|
—
|
|
|
$
|
28.0
|
|
|
$
|
319.7
|
|
|
|
July 25, 2015
|
|
July 26, 2014
|
||||||||||||||||||||
Description
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets subject to amortization
:
|
|
(millions)
|
||||||||||||||||||||||
Proprietary technology
|
|
$
|
5.8
|
|
|
$
|
(5.8
|
)
|
|
$
|
—
|
|
|
$
|
6.5
|
|
|
$
|
(5.7
|
)
|
|
$
|
0.8
|
|
Customer relationships
|
|
2.7
|
|
|
(2.7
|
)
|
|
—
|
|
|
2.7
|
|
|
(2.6
|
)
|
|
0.1
|
|
||||||
Trade names
|
|
5.3
|
|
|
(5.3
|
)
|
|
—
|
|
|
5.3
|
|
|
(3.8
|
)
|
|
1.5
|
|
||||||
Total intangible assets subject to amortization
|
|
13.8
|
|
|
(13.8
|
)
|
|
—
|
|
|
14.5
|
|
|
(12.1
|
)
|
|
2.4
|
|
||||||
Intangible assets not subject to amortization
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Brands and trade names
(a)
|
|
377.4
|
|
|
—
|
|
|
377.4
|
|
|
422.1
|
|
|
—
|
|
|
422.1
|
|
||||||
Franchise rights
|
|
10.9
|
|
|
—
|
|
|
10.9
|
|
|
10.9
|
|
|
—
|
|
|
10.9
|
|
||||||
Total intangible assets not subject to amortization
|
|
388.3
|
|
|
—
|
|
|
388.3
|
|
|
433.0
|
|
|
—
|
|
|
433.0
|
|
||||||
Total intangible assets
|
|
$
|
402.1
|
|
|
$
|
(13.8
|
)
|
|
$
|
388.3
|
|
|
$
|
447.5
|
|
|
$
|
(12.1
|
)
|
|
$
|
435.4
|
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
|
|
(millions)
|
||||||
Prepaid expenses
|
|
$
|
45.6
|
|
|
$
|
40.6
|
|
Accounts and other receivables
|
|
70.8
|
|
|
90.8
|
|
||
Short-term investments
|
|
13.4
|
|
|
30.4
|
|
||
Other current assets
|
|
1.7
|
|
|
5.0
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
131.5
|
|
|
$
|
166.8
|
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
|
|
(millions)
|
||||||
Accrued salary, wages and related expenses
(a)
|
|
$
|
176.9
|
|
|
$
|
120.6
|
|
Accrued operating expenses
(b)
|
|
202.1
|
|
|
164.0
|
|
||
Sales and other taxes payable
|
|
14.2
|
|
|
15.7
|
|
||
Other
|
|
10.0
|
|
|
8.6
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
403.2
|
|
|
$
|
308.9
|
|
(a)
|
The increase is primarily due to the reclassification of approximately
$35 million
of retirement compensation from Other non-current liabilities to Accrued expenses and other current liabilities during Fiscal 2015, as more fully described in
Employment Agreements
section in Note 14.
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
|
|
(millions)
|
||||||
Revolving credit agreement
|
|
$
|
116.0
|
|
|
$
|
172.0
|
|
Less: current portion
|
|
—
|
|
|
—
|
|
||
Total long-term debt
|
|
$
|
116.0
|
|
|
$
|
172.0
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions)
|
||||||||||
Domestic
|
|
$
|
(303.1
|
)
|
|
$
|
144.7
|
|
|
$
|
189.8
|
|
Foreign
|
|
62.5
|
|
|
58.8
|
|
|
52.8
|
|
|||
Total (loss) income from continuing operations before provision for income taxes
|
|
$
|
(240.6
|
)
|
|
$
|
203.5
|
|
|
$
|
242.6
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
Current:
|
|
(millions)
|
||||||||||
Federal
(a)
|
|
$
|
(20.8
|
)
|
|
$
|
15.2
|
|
|
$
|
30.6
|
|
State and local
(a)
|
|
8.8
|
|
|
13.5
|
|
|
5.7
|
|
|||
Foreign
|
|
14.8
|
|
|
12.3
|
|
|
10.6
|
|
|||
|
|
2.8
|
|
|
41.0
|
|
|
46.9
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
0.9
|
|
|
24.9
|
|
|
38.6
|
|
|||
State and local
|
|
(6.5
|
)
|
|
(0.2
|
)
|
|
1.4
|
|
|||
Foreign
|
|
(1.0
|
)
|
|
(0.4
|
)
|
|
0.5
|
|
|||
|
|
(6.6
|
)
|
|
24.3
|
|
|
40.5
|
|
|||
Total (benefit) provision for income taxes from continuing operations
|
|
$
|
(3.8
|
)
|
|
$
|
65.3
|
|
|
$
|
87.4
|
|
(a)
|
Excludes excess tax benefits of approximately
$(1.2) million
in Fiscal 2015,
$4.2 million
in Fiscal 2014 and
$14.1 million
in Fiscal 2013 resulting from stock-based compensation arrangements. Such amounts were recorded within equity.
|
|
Fiscal Years Ended
|
||||||||||
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
(millions)
|
||||||||||
(Benefit) provision for income taxes from continuing operations at the U.S. federal statutory rate
|
$
|
(84.3
|
)
|
|
$
|
71.2
|
|
|
$
|
84.9
|
|
Increase (decrease) due to:
|
|
|
|
|
|
|
|||||
State and local income taxes, net of federal benefit
|
4.1
|
|
|
8.8
|
|
|
8.4
|
|
|||
Tax benefit related to deferred compensation
|
(13.7
|
)
|
|
—
|
|
|
—
|
|
|||
Goodwill impairment
|
91.6
|
|
|
—
|
|
|
—
|
|
|||
Net change relating to uncertain income tax benefits
|
(0.7
|
)
|
|
(2.3
|
)
|
|
(6.4
|
)
|
|||
Indefinitely reinvested foreign earnings
|
1.7
|
|
|
(11.6
|
)
|
|
(0.9
|
)
|
|||
Other – net
|
(2.5
|
)
|
|
(0.8
|
)
|
|
1.4
|
|
|||
Total (benefit) provision for income taxes from continuing operations
|
$
|
(3.8
|
)
|
|
$
|
65.3
|
|
|
$
|
87.4
|
|
|
|
July 25,
2015 |
|
July 26,
2014 |
||||
Deferred tax assets:
|
|
(millions)
|
||||||
Inventories
|
|
$
|
18.7
|
|
|
$
|
14.3
|
|
Tax credits and net operating loss carryforwards
|
|
18.7
|
|
|
14.2
|
|
||
Accrued payroll and benefits
|
|
78.3
|
|
|
59.9
|
|
||
Legal reserve
|
|
21.0
|
|
|
—
|
|
||
Share-based compensation
|
|
23.7
|
|
|
23.1
|
|
||
Straight-line rent
|
|
45.7
|
|
|
50.0
|
|
||
Federal benefit of uncertain tax positions
|
|
14.7
|
|
|
15.5
|
|
||
Other
|
|
19.2
|
|
|
18.8
|
|
||
Total deferred tax assets
|
|
240.0
|
|
|
195.8
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Depreciation
|
|
113.0
|
|
|
85.8
|
|
||
Amortization
|
|
168.6
|
|
|
171.7
|
|
||
Foreign unremitted earnings
|
|
32.8
|
|
|
20.7
|
|
||
Other
|
|
14.0
|
|
|
15.8
|
|
||
Total deferred tax liabilities
|
|
328.4
|
|
|
294.0
|
|
||
Valuation allowance
|
|
(4.9
|
)
|
|
(2.8
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(93.3
|
)
|
|
$
|
(101.0
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||
|
|
(millions)
|
||||||||||
Unrecognized tax benefit beginning balance
|
|
$
|
29.9
|
|
|
$
|
31.2
|
|
|
$
|
40.5
|
|
Additions related to acquisitions
|
|
—
|
|
|
—
|
|
|
2.8
|
|
|||
Additions related to current period tax positions
|
|
1.6
|
|
|
1.5
|
|
|
1.5
|
|
|||
Additions related to tax positions in prior years
|
|
6.7
|
|
|
4.3
|
|
|
2.2
|
|
|||
Reductions related to prior period tax positions
|
|
(3.2
|
)
|
|
—
|
|
|
(3.0
|
)
|
|||
Reductions related to settlements with taxing authorities
|
|
(0.3
|
)
|
|
(1.5
|
)
|
|
(5.7
|
)
|
|||
Reductions related to expiration of statute of limitations
|
|
(0.6
|
)
|
|
(5.6
|
)
|
|
(7.1
|
)
|
|||
Unrecognized tax benefit ending balance
|
|
$
|
34.1
|
|
|
$
|
29.9
|
|
|
$
|
31.2
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||
|
|
(millions)
|
||||||||||
Accrued interest and penalties beginning balance
|
|
$
|
13.8
|
|
|
$
|
16.5
|
|
|
$
|
21.2
|
|
Reductions credited to expense, net
|
|
(2.3
|
)
|
|
(2.7
|
)
|
|
(4.7
|
)
|
|||
Accrued interest and penalties ending balance
|
|
$
|
11.5
|
|
|
$
|
13.8
|
|
|
$
|
16.5
|
|
A summary of occupancy costs follows:
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions)
|
||||||||||
Base rentals
|
|
$
|
404.4
|
|
|
$
|
395.5
|
|
|
$
|
391.6
|
|
Percentage rentals
|
|
20.5
|
|
|
23.2
|
|
|
21.0
|
|
|||
Other occupancy costs, primarily CAM and real estate taxes
|
|
143.6
|
|
|
133.5
|
|
|
128.6
|
|
|||
Total
|
|
$
|
568.5
|
|
|
$
|
552.2
|
|
|
$
|
541.2
|
|
Fiscal Years
|
Minimum Operating
Lease Payments
(a) (b)
|
||
|
(millions)
|
||
2016
|
$
|
407.5
|
|
2017
|
350.1
|
|
|
2018
|
284.4
|
|
|
2019
|
225.1
|
|
|
2020
|
180.3
|
|
|
Subsequent years
|
472.4
|
|
|
Total future minimum rentals
|
$
|
1,919.8
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
July 25,
2015
(a)
|
|
July 26,
2014
|
|
July 27,
2013
|
|||
|
|
(millions)
|
|||||||
Basic
|
|
162.6
|
|
|
160.6
|
|
|
157.3
|
|
Dilutive effect of stock options, restricted stock and restricted stock units
|
|
—
|
|
|
4.5
|
|
|
6.0
|
|
Diluted shares
|
|
162.6
|
|
|
165.1
|
|
|
163.3
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
|
|
(millions)
|
||||||||||
Compensation expense
|
|
$
|
18.2
|
|
|
$
|
30.6
|
|
|
$
|
29.5
|
|
Income tax benefit
|
|
$
|
(6.8
|
)
|
|
$
|
(11.5
|
)
|
|
$
|
(11.0
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
Expected term (years)
|
|
3.9
|
|
|
3.9
|
|
|
3.9
|
|
|||
Expected volatility
|
|
38.8
|
%
|
|
40.0
|
%
|
|
41.6
|
%
|
|||
Risk-free interest rate
|
|
1.8
|
%
|
|
1.5
|
%
|
|
0.7
|
%
|
|||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted-average grant date fair value
|
|
$
|
4.97
|
|
|
$
|
7.11
|
|
|
$
|
7.29
|
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average Remaining Contractual
Terms
|
|
Aggregate
Intrinsic
Value
(a)
|
|||||
|
|
(thousands)
|
|
|
|
|
(years)
|
|
(millions)
|
||||
Options outstanding – July 26, 2014
|
|
12,714.4
|
|
|
$
|
14.04
|
|
|
5.6
|
|
$
|
45.7
|
|
Granted
|
|
3,287.4
|
|
|
14.08
|
|
|
|
|
|
|
||
Exercised
|
|
(908.1
|
)
|
|
9.21
|
|
|
|
|
|
|
||
Canceled/Forfeited
|
|
(989.8
|
)
|
|
17.26
|
|
|
|
|
|
|
||
Options outstanding – July 25, 2015
|
|
14,103.9
|
|
|
$
|
14.13
|
|
|
5.1
|
|
$
|
17.3
|
|
Options vested and expected to vest at July 25, 2015
(b)
|
|
13,755.8
|
|
|
$
|
14.49
|
|
|
5.1
|
|
$
|
17.3
|
|
Options exercisable at July 25, 2015
|
|
7,958.3
|
|
|
$
|
12.25
|
|
|
4.3
|
|
$
|
17.2
|
|
(a)
|
The intrinsic value is the amount by which the market price at the end of the period of the underlying share of stock exceeds the exercise price of the stock option.
|
(b)
|
The number of options expected to vest takes into consideration estimated expected forfeitures.
|
|
Service-based
Restricted Equity Awards
|
|
Performance-based
Restricted Equity Awards
|
|
Market-based
Restricted Equity Awards
|
|||||||||||||||
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value Per
Share
|
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value Per
Share
|
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value Per
Share
|
|||||||||
|
(thousands)
|
|
|
|
(thousands)
|
|
|
|
(thousands)
|
|
|
|
||||||||
Nonvested at July 26, 2014
|
1,247.7
|
|
|
$
|
17.66
|
|
|
662.1
|
|
|
$
|
17.18
|
|
|
176.6
|
|
|
$
|
16.68
|
|
Granted
|
506.5
|
|
|
13.96
|
|
|
164.0
|
|
|
13.75
|
|
|
61.0
|
|
|
13.34
|
|
|||
Vested
|
(451.1
|
)
|
|
17.33
|
|
|
(109.1
|
)
|
|
12.91
|
|
|
—
|
|
|
—
|
|
|||
Canceled/Forfeited
|
(201.2
|
)
|
|
17.49
|
|
|
(267.9
|
)
|
|
16.80
|
|
|
(52.8
|
)
|
|
12.25
|
|
|||
Nonvested at July 25, 2015
|
1,101.9
|
|
|
$
|
16.13
|
|
|
449.1
|
|
|
$
|
17.20
|
|
|
184.8
|
|
|
$
|
16.84
|
|
|
Service-based
Restricted Equity Awards
|
|
Performance-based
Restricted Equity Awards
|
|
Market-based
Restricted Equity Awards
|
||||||
Total unrecognized compensation at July 25, 2015 (millions)
|
$
|
8.5
|
|
|
$
|
1.5
|
|
|
$
|
0.9
|
|
Weighted-average years expected to be recognized over (years)
|
3.0
|
|
|
1.9
|
|
|
1.7
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015 |
|
July 26,
2014 |
|
July 27,
2013 |
||||||
Service-based Restricted Equity Awards:
|
|
|
|
|
|
|
|
|
|
|||
Weighted-average grant date fair value of awards granted
|
|
$
|
13.96
|
|
|
$
|
19.23
|
|
|
$
|
20.22
|
|
Total fair value of awards vested (millions)
|
|
7.1
|
|
|
12.9
|
|
|
10.0
|
|
|||
|
|
|
|
|
|
|
||||||
Performance-based Restricted Equity Awards:
|
|
|
|
|
|
|
|
|
||||
Weighted-average grant date fair value of awards granted
|
|
$
|
13.75
|
|
|
$
|
20.06
|
|
|
$
|
18.61
|
|
Total fair value of awards vested (millions)
|
|
1.4
|
|
|
2.6
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
||||||
Market-based Restricted Equity Awards:
|
|
|
|
|
|
|
|
|
||||
Weighted-average grant date fair value of awards granted
|
|
$
|
13.34
|
|
|
$
|
19.46
|
|
|
$
|
18.13
|
|
Total fair value of awards vested (millions)
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
Cash-Settled LTIP Awards
|
|
|
Number of Shares
|
|
|
(thousands)
|
|
Nonvested at July 26, 2014
|
858.0
|
|
Granted
|
809.4
|
|
Vested
|
(107.5
|
)
|
Canceled/Forfeited
|
(282.0
|
)
|
Nonvested at July 25, 2015
|
1,277.9
|
|
•
|
Justice
segment – consists of the specialty retail, outlet, ecommerce and licensing operations of the
Justice
brand.
|
•
|
Lane Bryant
segment – consists of the specialty retail, outlet and ecommerce operations of the
Lane Bryant
and
Cacique
brands.
|
•
|
maurices
segment – consists of the specialty retail, outlet and ecommerce operations of the
maurices
brand.
|
•
|
dressbarn
segment – consists of the specialty retail, outlet and ecommerce operations of the
dressbarn
brand.
|
•
|
Catherines
segment - consists of the specialty retail and ecommerce operations of the
Catherines
brand.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||
Net sales:
|
|
(millions)
|
||||||||||
Justice
|
|
$
|
1,276.8
|
|
|
$
|
1,384.3
|
|
|
$
|
1,407.4
|
|
Lane Bryant
|
|
1,095.9
|
|
|
1,080.0
|
|
|
1,050.1
|
|
|||
maurices
|
|
1,060.6
|
|
|
971.4
|
|
|
917.6
|
|
|||
dressbarn
|
|
1,023.6
|
|
|
1,022.5
|
|
|
1,020.7
|
|
|||
Catherines
|
|
346.0
|
|
|
332.4
|
|
|
319.1
|
|
|||
Total net sales
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
|
|
|
|
|
|
|
||||||
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
(62.8
|
)
|
|
$
|
99.3
|
|
|
$
|
182.3
|
|
Lane Bryant
|
|
(308.0
|
)
|
|
(4.3
|
)
|
|
(30.1
|
)
|
|||
maurices
|
|
125.9
|
|
|
86.0
|
|
|
107.0
|
|
|||
dressbarn
|
|
10.7
|
|
|
39.4
|
|
|
30.3
|
|
|||
Catherines
|
|
31.0
|
|
|
24.4
|
|
|
10.4
|
|
|||
Unallocated acquisition and integration expenses
|
|
(31.7
|
)
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|||
Total operating (loss) income
|
|
$
|
(234.9
|
)
|
|
$
|
210.8
|
|
|
$
|
265.3
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||
Depreciation and amortization expense:
|
|
(millions)
|
||||||||||
Justice
|
|
$
|
70.2
|
|
|
$
|
60.7
|
|
|
$
|
56.3
|
|
Lane Bryant
|
|
46.8
|
|
|
45.6
|
|
|
43.7
|
|
|||
maurices
|
|
43.3
|
|
|
39.5
|
|
|
31.5
|
|
|||
dressbarn
|
|
50.7
|
|
|
40.5
|
|
|
38.5
|
|
|||
Catherines
|
|
7.2
|
|
|
7.3
|
|
|
6.0
|
|
|||
Total depreciation and amortization expense
|
|
$
|
218.2
|
|
|
$
|
193.6
|
|
|
$
|
176.0
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures
(a)
:
|
|
|
|
|
|
|
|
|
|
|||
Justice
|
|
$
|
51.5
|
|
|
$
|
93.5
|
|
|
$
|
65.9
|
|
Lane Bryant
|
|
47.9
|
|
|
53.5
|
|
|
49.1
|
|
|||
maurices
|
|
56.3
|
|
|
54.0
|
|
|
45.1
|
|
|||
dressbarn
|
|
47.6
|
|
|
93.5
|
|
|
50.3
|
|
|||
Catherines
|
|
6.2
|
|
|
7.3
|
|
|
2.7
|
|
|||
Corporate
(b)
|
|
103.0
|
|
|
175.7
|
|
|
77.8
|
|
|||
Total capital expenditures
|
|
$
|
312.5
|
|
|
$
|
477.5
|
|
|
$
|
290.9
|
|
|
|
July 25,
2015
|
|
July 26,
2014
|
||||
Assets:
|
|
(millions)
|
||||||
Justice
|
|
$
|
826.8
|
|
|
$
|
858.3
|
|
Lane Bryant
(a)
|
|
597.3
|
|
|
866.4
|
|
||
maurices
|
|
562.2
|
|
|
535.5
|
|
||
dressbarn
|
|
336.1
|
|
|
358.2
|
|
||
Catherines
|
|
98.9
|
|
|
86.6
|
|
||
Corporate
(
b
)
|
|
494.4
|
|
|
418.8
|
|
||
Total assets
|
|
$
|
2,915.7
|
|
|
$
|
3,123.8
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
|||
|
|
(millions)
|
|||||||
Apparel
|
|
84
|
%
|
|
83
|
%
|
|
83
|
%
|
Accessories and other
|
|
16
|
%
|
|
17
|
%
|
|
17
|
%
|
Total net sales
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Fiscal Years Ended
|
||||||||||
Cash Interest and Taxes:
|
|
July 25,
2015
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||
|
|
(millions)
|
||||||||||
Cash paid for interest
|
|
$
|
4.6
|
|
|
$
|
4.6
|
|
|
$
|
15.6
|
|
Cash (received) paid for income taxes
|
|
$
|
(5.9
|
)
|
|
$
|
42.1
|
|
|
$
|
19.7
|
|
Fiscal Year Ended July 25, 2015
|
|
Fourth
Quarter
(a)(b)(c)(d)
|
|
Third
Quarter
(a)(b)
|
|
Second
Quarter
(a)(b)
|
|
First
Quarter
(a)(b)
|
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
1,169.8
|
|
|
$
|
1,150.3
|
|
|
$
|
1,288.6
|
|
|
$
|
1,194.2
|
|
Gross margin
|
|
637.6
|
|
|
675.1
|
|
|
662.0
|
|
|
694.5
|
|
||||
(Loss) income from continuing operations
|
|
(323.4
|
)
|
|
24.4
|
|
|
8.7
|
|
|
53.5
|
|
||||
Loss from discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net (loss) income
|
|
(323.4
|
)
|
|
24.4
|
|
|
8.7
|
|
|
53.5
|
|
||||
Net (loss) income per common share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(1.98
|
)
|
|
$
|
0.15
|
|
|
$
|
0.05
|
|
|
$
|
0.33
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net (loss) income per common share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(1.98
|
)
|
|
$
|
0.15
|
|
|
$
|
0.05
|
|
|
$
|
0.32
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fiscal Year Ended July 26, 2014
|
|
Fourth
Quarter
(a)(b)(c)
|
|
Third
Quarter
(a)(b)
|
|
Second
Quarter
(a)(b)
|
|
First
Quarter
(a)(b)
|
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
1,182.4
|
|
|
$
|
1,145.1
|
|
|
$
|
1,266.5
|
|
|
$
|
1,196.6
|
|
Gross margin
|
|
647.2
|
|
|
657.7
|
|
|
661.9
|
|
|
693.2
|
|
||||
Income from continuing operations
|
|
15.9
|
|
|
35.6
|
|
|
32.4
|
|
|
54.3
|
|
||||
Loss from discontinued operations, net of taxes
|
|
(0.2
|
)
|
|
(2.4
|
)
|
|
(0.5
|
)
|
|
(1.7
|
)
|
||||
Net income
|
|
15.7
|
|
|
33.2
|
|
|
31.9
|
|
|
52.6
|
|
||||
Net income per common share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
$
|
0.34
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
Net income per common share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.10
|
|
|
$
|
0.22
|
|
|
$
|
0.19
|
|
|
$
|
0.33
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
(0.02
|
)
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
(a)
|
Fiscal 2015 includes Acquisition and integration expenses of $9.0 million, $5.3 million, $4.6 million and $12.8 million in the first, second, third and fourth quarters, respectively. Fiscal 2014 includes Acquisition and integration expenses of $5.3 million, $6.9 million, $12.7 million and $9.1 million in the first, second, third and fourth quarters, respectively.
|
(d)
|
In the
fourth quarter of Fiscal 2015, the Company established a legal reserve of approximately $50 million in connection with the
Justice
pricing lawsuits. Refer to Note 14 to the consolidated financial statements for additional information.
|
|
|
Fiscal Years Ended
(a)
|
||||||||||||||||||
|
|
July 25,
2015
(b)(c)(d)(e)
|
|
July 26,
2014
(b)(d)(e)
|
|
July 27,
2013
(b)(d)(f)
|
|
July 28,
2012
(b)(h)(i)
|
|
July 30,
2011
(f)
|
||||||||||
|
|
(millions, except for share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
||||||||||||||||||
Net sales
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
|
$
|
3,353.3
|
|
|
$
|
2,914.0
|
|
Impairment of goodwill
|
|
(261.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment of intangible assets
|
|
(44.7
|
)
|
|
(13.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization expense
|
|
(218.2
|
)
|
|
(193.6
|
)
|
|
(176.0
|
)
|
|
(107.4
|
)
|
|
(89.8
|
)
|
|||||
Operating (loss) income
|
|
(234.9
|
)
|
|
210.8
|
|
|
265.3
|
|
|
292.6
|
|
|
289.8
|
|
|||||
(Loss) income from continuing operations
|
|
(236.8
|
)
|
|
138.2
|
|
|
155.2
|
|
|
171.8
|
|
|
170.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income from continuing operations per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(1.46
|
)
|
|
$
|
0.86
|
|
|
$
|
0.99
|
|
|
$
|
1.12
|
|
|
$
|
1.09
|
|
Diluted
|
|
(1.46
|
)
|
|
0.84
|
|
|
0.95
|
|
|
$
|
1.08
|
|
|
$
|
1.05
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
$
|
240.6
|
|
|
$
|
156.9
|
|
|
$
|
186.4
|
|
|
$
|
164.3
|
|
|
$
|
243.5
|
|
Working capital
(g)
|
|
232.2
|
|
|
291.7
|
|
|
306.3
|
|
|
325.6
|
|
|
384.6
|
|
|||||
Total assets
(g)
|
|
2,915.7
|
|
|
3,123.8
|
|
|
2,871.7
|
|
|
2,807.1
|
|
|
1,839.6
|
|
|||||
Total debt
|
|
116.0
|
|
|
172.0
|
|
|
135.6
|
|
|
326.6
|
|
|
—
|
|
|||||
Total equity
|
|
$
|
1,518.1
|
|
|
$
|
1,737.7
|
|
|
$
|
1,556.4
|
|
|
$
|
1,340.9
|
|
|
$
|
1,158.0
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-GAAP Financial Data (Unaudited):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
(j)
|
|
$
|
374.1
|
|
|
$
|
438.4
|
|
|
$
|
495.8
|
|
|
$
|
438.9
|
|
|
$
|
391.9
|
|
Incentive Compensation:
|
Participation in the Incentive Compensation program at a target level of 75% of your annual base salary. For the Spring FY15 season, you will receive the greater of the two calculations, 70/30 dressbarn and ascena (current) or 100% ascena. For the Fall FY16 season, your bonus will be tied to ascena corporate results, 100%. The bonus will be paid out in two portions following the end of each six month fiscal season (fall and spring). To be eligible for a bonus, you must be employed by Ascena at the time of the bonus payout.
|
Incentive Compensation:
|
Cash Bonus:
Participation in the Incentive Compensation (IC) program at a target level of 75% of your annual base salary. Your initial annual target level (100%) is $375,000. Maximum annual payout is double your target level (200%) ($750,000 at maximum).
|
Stock Awards:
|
You will continue to be eligible for an Annual Grant effective in September 2015. All stock grants are contingent upon the approval from the Board of Directors. All grants are subject to the Plan Description/Prospectus.
|
|
|
State of Incorporation
|
Subsidiaries of Ascena Retail Group, Inc.
|
|
or Formation
|
|
|
|
The Dress Barn, Inc.
|
|
Connecticut
|
|
|
|
Maurices Incorporated
|
|
Delaware
|
|
|
|
Tween Brands, Inc. d/b/a “Justice”
|
|
Delaware
|
|
|
|
Charming Shoppes, Inc.
|
|
Pennsylvania
|
|
|
|
GC Fulfillment, LLC
|
|
Delaware
|
|
|
|
Etna Retail DC, LLC
|
|
Delaware
|
|
|
|
Ascena Trade Services, LLC
|
|
Delaware
|
|
|
|
ANN INC.
|
|
Delaware
|
|
|
|
Subsidiaries of The Dress Barn, Inc.
|
|
|
|
|
|
DBX Inc.
|
|
New York
|
|
|
|
Dress Barn Credit Management, LLC
|
|
Virginia
|
|
|
|
933 Inspiration, LLC
|
|
Delaware
|
|
|
|
Subsidiaries of Maurices Incorporated
|
|
|
|
|
|
Maurices Credit Management, Inc.
|
|
Virginia
|
|
|
|
Duluth Holdings, LLC
|
|
Minnesota
|
|
|
|
Duluth Real Estate, LLC
|
|
Delaware
|
|
|
|
Subsidiaries of Tween Brands, Inc.
|
|
|
|
|
|
Tween Brands Store Planning, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Purchasing, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Direct Services, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Direct, LLC
|
|
Ohio
|
|
|
|
Tween Brands Agency, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Investment, LLC
|
|
Ohio
|
|
|
|
Too G.C., LLC
|
|
Ohio
|
|
|
|
Tween Brands Service Co.
|
|
Ohio
|
|
|
|
Ascena Global Sourcing Hong Kong Limited
|
|
Hong Kong
|
|
|
|
Worldwide Retail Holdings, Inc.
|
|
Delaware
|
|
|
|
Worldwide Retail Holdings, B.V.
|
|
Netherlands
|
Worldwide Retail Holdings, Cooperatief UA
|
|
Netherlands
|
|
|
|
Tween Brands Canada Stores Ltd.
|
|
Ontario, Canada
|
|
|
|
Ascena Global Sourcing (Shanghai) Limited
|
|
Shanghai, China
|
|
|
|
Maurices Canada Stores, Ltd.
|
|
Ontario, Canada
|
|
|
|
Dress Barn Canada Stores, Ltd.
|
|
Ontario, Canada
|
|
|
|
Kirkstone Company Limited
|
|
Hong Kong
|
|
|
|
KS Investments Ltd.
|
|
Bermuda
|
|
|
|
CSI Trade Services Limited
|
|
Hong Kong
|
|
|
|
FSHC, LLC
|
|
Delaware
|
|
|
|
Huambo Limited
|
|
Hong Kong
|
|
|
|
Saddle Sound Company Limited
|
|
Hong Kong
|
|
|
|
Trimoland Limited
|
|
Hong Kong
|
|
|
|
Yardarm Trading Limited
|
|
Hong Kong
|
|
|
|
LB International Sales Limited
|
|
Hong Kong
|
|
|
|
Kirkstone India Private Limited
|
|
India
|
|
|
|
Subsidiaries of Charming Shoppes, Inc.
|
|
|
|
|
|
C.S.A.C. LLC
|
|
Delaware
|
|
|
|
C.S.F. Corp.
|
|
Delaware
|
|
|
|
C.S.I.C., Inc.
|
|
Delaware
|
|
|
|
Catalog Fulfillment Co, Inc.
|
|
Arizona
|
|
|
|
Catalog Receivables LLC
|
|
Delaware
|
|
|
|
Catalog Seller LLC
|
|
Delaware
|
|
|
|
Catherines C.S.A.C., Inc.
|
|
Delaware
|
|
|
|
Catherines C.S.I.C., Inc.
|
|
Delaware
|
|
|
|
Catherines of California, Inc.
|
|
California
|
|
|
|
Catherines of Nevada, Inc.
|
|
Nevada
|
|
|
|
Catherines of Pennsylvania, Inc.
|
|
Tennessee
|
|
|
|
Catherines Partners-Washington, G.P.
|
|
Washington
|
|
|
|
Catherines Partners-Indiana, LLP
|
|
Indiana
|
|
|
|
Catherines Stores Corporation
|
|
Tennessee
|
|
|
|
Catherines Stores of Indiana, Inc.
|
|
Indiana
|
|
|
|
Catherines Woman Delaware, Inc.
|
|
Delaware
|
|
|
|
Catherines Woman Michigan, Inc.
|
|
Michigan
|
|
|
|
Catherines, Inc.
|
|
Delaware
|
|
|
|
Catherines.com, Inc.
|
|
Tennessee
|
|
|
|
CCTM, Inc.
|
|
Delaware
|
|
|
|
Charm-Fin Stores, Inc.
|
|
Delaware
|
|
|
|
Charming Direct, Inc.
|
|
Delaware
|
|
|
|
Charming Shoppes Interactive, Inc.
|
|
Delaware
|
|
|
|
Charming Shoppes of Delaware, Inc.
|
|
Pennsylvania
|
Charming Shoppes Receivables Corp.
|
|
Delaware
|
|
|
|
Charming Shoppes Seller, Inc.
|
|
Delaware
|
|
|
|
Charming Shoppes Street, Inc.
|
|
Delaware
|
|
|
|
Chestnut Acquisition Sub, Inc.
|
|
Delaware
|
|
|
|
Crosstown Traders, Inc.
|
|
Delaware
|
|
|
|
CS Holdco LLC
|
|
Delaware
|
|
|
|
CS Holdco II Inc.
|
|
Delaware
|
|
|
|
CS Insurance Ltd.
|
|
Bermuda
|
|
|
|
CS Investment Company
|
|
Delaware
|
|
|
|
CSD Acquisition Corp.
|
|
Delaware
|
|
|
|
CSGC, Inc.
|
|
Ohio
|
|
|
|
Lane Bryant Charities, Inc.
|
|
Pennsylvania
|
|
|
|
CSI Industries, Inc.
|
|
Delaware
|
|
|
|
CSIM, Inc.
|
|
Delaware
|
|
|
|
CSPE, LLC
|
|
Pennsylvania
|
|
|
|
Fashion Apparel Sourcing, Inc.
|
|
Delaware
|
|
|
|
Fashion Bug of California, Inc.
|
|
California
|
|
|
|
Fashion Service LLC
|
|
Delaware
|
|
|
|
Fashion Service Fulfillment Corporation
|
|
Delaware
|
|
|
|
FB Distro, Inc.
|
|
Indiana
|
|
|
|
FBGC, Inc.
|
|
Ohio
|
|
|
|
Fashion Bug Retail Companies, LLC
|
|
Delaware
|
|
|
|
Charming Sales Co. Two, Inc.
|
|
Wisconsin
|
|
|
|
Charming Sales Co. Four, Inc.
|
|
Wisconsin
|
|
|
|
Charming Sales Co. Three, Inc.
|
|
Wisconsin
|
|
|
|
Charming Sales Co. One, Inc.
|
|
Wisconsin
|
|
|
|
Home ETC, Inc.
|
|
Delaware
|
|
|
|
KAFCO Development Co., Inc.
|
|
Pennsylvania
|
|
|
|
Lane Bryant of Pennsylvania, Inc.
|
|
Pennsylvania
|
|
|
|
Lane Bryant Purchasing Corp.
|
|
Ohio
|
|
|
|
Lane Bryant, Inc.
|
|
Delaware
|
|
|
|
Lane Bryant Woman Catalog, Inc.
|
|
Delaware
|
|
|
|
LOS #8257, LLC
|
|
Arizona
|
|
|
|
Modern Woman, Inc.
|
|
Delaware
|
|
|
|
Modern Woman Holdings, Inc.
|
|
Delaware
|
|
|
|
Modern Woman Specialty, Inc.
|
|
California
|
|
|
|
Outlet Division Management Co., Inc.
|
|
Delaware
|
|
|
|
Outlet Division Store Co., Inc.
|
|
Delaware
|
|
|
|
Petite Sophisticate, Inc.
|
|
Delaware
|
|
|
|
Petite Sophisticate Management Co., Inc.
|
|
Delaware
|
|
|
|
PSTM, Inc.
|
|
Delaware
|
|
|
|
Rolla #2685 Development Co., Inc.
|
|
Missouri
|
|
|
|
Shoetrader, Inc.
|
|
Pennsylvania
|
|
|
|
Sonsi, Inc.
|
|
Delaware
|
|
|
|
White Marsh Distribution, LLC
|
|
Maryland
|
|
|
|
Winks Lane, Inc.
|
|
Pennsylvania
|
|
|
|
Yucca #2524 Development Co., Inc.
|
|
California
|
Subsidiaries of ANN INC.
|
|
|
|
|
|
AnnTaylor, Inc.
|
|
Delaware
|
|
|
|
Annco, Inc.
|
|
Delaware
|
|
|
|
AnnTaylor Retail, Inc.
|
|
Florida
|
|
|
|
ANN Cards Services, Inc.
|
|
Florida
|
|
|
|
AnnTaylor Distribition Services, Inc.
|
|
Delaware
|
|
|
|
ANN Canada Inc.
|
|
Canada (federal)
|
|
|
|
AnnTaylor Sourcing Far East Limited
|
|
Hong Kong
|
|
|
|
AnnTaylor of Puerto Rico, Inc.
|
|
Puerto Rico
|
|
|
|
AnnTaylor Trading (Shanghai) Co., Ltd.
|
|
Shanghai, China
|
Date: September 16, 2015
|
|
/s/ David Jaffe
|
|
David Jaffe
|
|
President, Chief Executive Officer and Director
|
Date: September 16, 2015
|
|
/s/ Robb Giammatteo
|
|
Robb Giammatteo
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David Jaffe
|
|
David Jaffe
|
|
President, Chief Executive Officer and Director
|
|
September 16, 2015
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Robb Giammatteo
|
|
Robb Giammatteo
|
|
Executive Vice President and Chief Financial Officer
|
|
September 16, 2015
|