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 Global Select Market
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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 2017
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Fiscal 2016
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Fiscal 2015
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||||||
Net sales:
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(millions)
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||||||||||
Premium Fashion
(a)
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$
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2,322.6
|
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$
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2,330.9
|
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$
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—
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Value Fashion
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1,950.2
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2,094.6
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2,084.2
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Plus Fashion
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1,353.9
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1,463.6
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1,441.9
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Kids Fashion
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1,023.1
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1,106.3
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1,276.8
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|||
Total net sales
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$
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6,649.8
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$
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6,995.4
|
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$
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4,802.9
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Fiscal 2017
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Fiscal 2016
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Fiscal 2015
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||||||
Operating (loss) income:
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(millions)
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||||||||||
Premium Fashion
(a) (b)
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$
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140.9
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$
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13.3
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$
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—
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Value Fashion
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12.2
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92.0
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136.6
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Plus Fashion
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15.5
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36.9
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29.4
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Kids Fashion
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(36.7
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)
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29.0
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(62.8
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)
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Unallocated acquisition and integration expenses
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(39.4
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)
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(77.4
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)
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(31.7
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)
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|||
Unallocated restructuring and other related charges
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(81.9
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)
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—
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—
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|||
Unallocated impairment of goodwill
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(596.3
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)
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—
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(261.7
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)
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|||
Unallocated impairment of intangible assets
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(728.1
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)
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—
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(44.7
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)
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Total operating (loss) income
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$
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(1,313.8
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)
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$
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93.8
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$
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(234.9
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)
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(a)
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The results of the
Premium Fashion
segment for the post-acquisition period from August 22, 2015 to July 30, 2016 are included within the Company's consolidated results of operations for Fiscal 2016.
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(b)
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The results of the
Premium Fashion
segment
for Fiscal 2016 include approximately
$126.9 million
of non-cash purchase accounting expense related to the amortization of the write-up of inventory to fair market value.
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•
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Ann Taylor – www.anntaylor.com
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•
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LOFT – www.LOFT.com
and
www.louandgrey.com
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•
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Justice
– www.shopjustice.com
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•
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Lane Bryant
– www.lanebryant.com
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•
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maurices
– www.maurices.com
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•
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dressbarn
– www.dressbarn.com
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•
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Catherines
– www.catherines.com
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Type of Facility
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Ann Taylor
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LOFT
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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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3
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53
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195
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380
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583
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582
|
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349
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2,145
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Enclosed Malls
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118
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|
219
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503
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187
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344
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47
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6
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1,424
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Outlet Malls and Outlet Strip Centers
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125
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|
155
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114
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115
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57
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150
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1
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717
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Lifestyle Centers and Downtown Locations
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76
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251
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88
|
|
82
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21
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—
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|
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3
|
|
521
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Total
|
|
322
|
|
678
|
|
900
|
|
764
|
|
1,005
|
|
779
|
|
|
359
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|
4,807
|
|
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Fiscal 2017
|
||||||||||||||||||||||
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Ann Taylor
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LOFT
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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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340
|
|
|
682
|
|
|
937
|
|
|
772
|
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993
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|
809
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373
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4,906
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Opened
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3
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15
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|
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2
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|
|
8
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|
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28
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|
|
6
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|
1
|
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63
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Closed
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(21
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)
|
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(19
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)
|
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(39
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)
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(16
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)
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(16
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)
|
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(36
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)
|
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(15
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)
|
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(162
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)
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End of Period
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322
|
|
|
678
|
|
|
900
|
|
|
764
|
|
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1,005
|
|
|
779
|
|
|
359
|
|
|
4,807
|
|
|
|
Fiscal 2016
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||||||||||||||||||||||
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Ann Taylor
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LOFT
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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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—
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|
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—
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|
|
978
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|
|
765
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|
951
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824
|
|
|
377
|
|
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3,895
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Stores added from
ANN
Acquisition
|
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359
|
|
|
680
|
|
|
—
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|
|
—
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|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,039
|
|
Opened
|
|
6
|
|
|
15
|
|
|
8
|
|
|
30
|
|
|
52
|
|
|
15
|
|
|
3
|
|
|
129
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|
Closed
|
|
(25
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)
|
|
(13
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)
|
|
(49
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)
|
|
(23
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)
|
|
(10
|
)
|
|
(30
|
)
|
|
(7
|
)
|
|
(157
|
)
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End of Period
|
|
340
|
|
|
682
|
|
|
937
|
|
|
772
|
|
|
993
|
|
|
809
|
|
|
373
|
|
|
4,906
|
|
Name
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Age
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Positions
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David Jaffe
|
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59
|
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Chief Executive Officer and Chairman of the Board
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Brian Lynch
|
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59
|
|
President and Chief Operating Officer
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Gary Muto
|
|
58
|
|
President and Chief Executive Officer-ascena Brands
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John Pershing
|
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46
|
|
Executive Vice President, Chief Human Resources Officer
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Duane D. Holloway
|
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45
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|
Executive Vice President, General Counsel and Assistant Secretary
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Robb Giammatteo
|
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45
|
|
Executive Vice President and Chief Financial Officer
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Daniel Lamadrid
|
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42
|
|
Senior Vice President and Chief Accounting Officer
|
•
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higher than anticipated costs in implementing planned workforce reductions;
|
•
|
higher than anticipated lease termination and store closure costs related to the Fleet Optimization, which is discussed below;
|
•
|
failure to meet operational targets or customer requirements due to the loss of employees or inadequate transfer of knowledge;
|
•
|
failure to maintain adequate controls and procedures while executing, and subsequent to, completing the Change for Growth program;
|
•
|
diversion of management’s attention and resources from ongoing business activities and/or a decrease in employee morale;
|
•
|
attrition beyond any planned reduction in workforce; and
|
•
|
damage to our reputation and brand image due to our restructuring-related activities, including certain store closures.
|
•
|
financial or political instability or terrorist acts in any of the countries in which our merchandise is manufactured, or the channels through which it passes;
|
•
|
fluctuations in the value of the U.S. Dollar against foreign currencies or restrictions on the transfer of funds to and from foreign countries;
|
•
|
inability of our manufacturers to comply with local laws, including labor laws, health and safety laws or labor practices;
|
•
|
increased security and regulatory requirements and inspections applicable to imported goods;
|
•
|
imposition or increases of duties, taxes and other charges on imports or exports;
|
•
|
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;
|
•
|
impact of natural disasters, extreme weather, public health concerns or other catastrophes on our foreign sourcing offices and vendor manufacturing operations;
|
•
|
delays in shipping due to port security or congestion issues, labor disputes or shortages, local business practices, vendor compliance with applicable import regulations or weather conditions;
|
•
|
violations under the U.S. Foreign Corrupt Practices Act or similar laws or regulations; and
|
•
|
increased costs of transportation.
|
•
|
computer system failures, including but not limited to, inadequate system capacity, human error, change in programming, website downtimes, system upgrades or migrations, Internet service or power outages;
|
•
|
cyber incidents, including but not limited to, security breaches and computer viruses;
|
•
|
reliance on third-party computer hardware/software fulfillment and delivery providers;
|
•
|
unfavorable federal or state regulations or laws;
|
•
|
violations of federal, state or other applicable laws, including those related to online privacy;
|
•
|
disruptions in telecommunication systems, power outages or other technical failures;
|
•
|
credit card fraud;
|
•
|
constantly evolving technology;
|
•
|
liability for online content; and
|
•
|
natural or man-made disasters or adverse weather conditions.
|
•
|
unsuccessful, delayed or more costly integration;
|
•
|
demands on management related to the increase in our size and the loss of key employees;
|
•
|
the diversion of management’s attention from the management of daily operations to the integration of operations;
|
•
|
expected cost savings not being achieved in full, or taking longer or requiring greater investment to achieve; and
|
•
|
not achieving the anticipated omni-channel growth potential.
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Fiscal Years
|
|
Leases Expiring
|
|
Number with
Renewal Options
|
|
Number without
Renewal Options
|
2018
|
|
1,031
|
|
320
|
|
711
|
2019
|
|
799
|
|
446
|
|
353
|
2020
|
|
540
|
|
311
|
|
229
|
2021
|
|
469
|
|
265
|
|
204
|
2022
|
|
575
|
|
221
|
|
354
|
2023 and thereafter
|
|
1,393
|
|
645
|
|
748
|
Total
|
|
4,807
|
|
2,208
|
|
2,599
|
•
|
a 202,000 square foot campus which serves as the corporate office for the
dressbarn
brand and for ascena located in Mahwah, NJ;
|
•
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a 280,000 square foot campus which serves as the corporate office for the
Justice
brand, located in New Albany, Ohio;
|
•
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a 145,000 square foot building which serves as the corporate office for the
Catherines
brand, located in Bensalem, Pennsylvania;
|
•
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a 200,000 square foot building which serves as the corporate office for the
maurices
brand and for a portion of the Company's brand services operations, located in Duluth, Minnesota; and
|
•
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a 168,000 square foot building which serves as the corporate office for the majority of the Company's brand services operations, located in Etna Township, Ohio, adjacent to our distribution center.
|
|
|
Fiscal 2017
|
|
Fiscal 2016
|
||||
Fiscal
|
|
High
|
|
Low
|
|
High
|
|
Low
|
First Quarter
|
|
$9.02
|
|
$4.75
|
|
$14.20
|
|
$10.73
|
Second Quarter
|
|
$8.11
|
|
$4.70
|
|
$13.98
|
|
$7.56
|
Third Quarter
|
|
$5.41
|
|
$3.64
|
|
$11.06
|
|
$6.48
|
Fourth Quarter
|
|
$3.91
|
|
$1.72
|
|
$9.44
|
|
$6.59
|
Period
|
|
Total
Number of
Shares
Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
(a)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
(a)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Month # 1 (April 30, 2017 – May 27, 2017)
|
|
|
—
|
|
|
$—
|
|
|
—
|
|
|
$181 million
|
|
Month # 2 (May 28, 2017 – July 1, 2017)
|
|
|
—
|
|
|
$—
|
|
|
—
|
|
|
$181 million
|
|
Month # 3 (July 2, 2017 – July 29, 2017)
|
|
|
—
|
|
|
$—
|
|
|
—
|
|
|
$181 million
|
|
•
|
Overview.
This section includes recent developments, our objectives and risks, and a summary of our financial performance for Fiscal 2017. In addition, this section includes a discussion of transactions affecting comparability that we believe are important in understanding our operational results and financial condition, and in anticipating future trends.
|
•
|
Results of operations.
This section provides an analysis of our operational results for Fiscal 2017, Fiscal 2016 and Fiscal 2015.
|
•
|
Financial condition and liquidity.
This section provides an analysis of our cash flows for Fiscal 2017, Fiscal 2016 and Fiscal 2015, as well as a discussion of our financial condition and liquidity as of July 29, 2017. The discussion of our financial condition and liquidity includes (i) our available financial capacity under our revolving credit agreement, (ii) a summary of our capital spending, and (iii) a summary of our contractual and other obligations as of July 29, 2017.
|
•
|
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 29, 2017.
|
•
|
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.
|
•
|
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.
|
•
|
Comparable sales decreased by
5%
, and were down at all four segments, primarily due to declines in store traffic;
|
•
|
Gross margin rate increased by
180
basis points to
58.0%
primarily due to an approximately $127 million non-cash purchase accounting expense related to the amortization of the write-up of inventory to fair value recorded in the year-ago period. Excluding the prior year impact of the inventory amortization, gross margin rate was essentially flat;
|
•
|
Operating loss was
$1.314 billion
compared to operating income of
$93.8 million
for the year-ago period, with the loss primarily due to the impairment of goodwill and other intangible assets; and
|
•
|
Net loss per diluted share of
$5.48
in Fiscal 2017 (caused primarily by the aforementioned impairment charges), compared to net loss per diluted share of
$0.06
for Fiscal 2016.
|
•
|
Cash from operations was
$343.6 million
, compared to
$445.4 million
in the year-ago period;
|
•
|
Cash used in investing activities for Fiscal 2017 was
$268.9 million
, consisting primarily of capital expenditures of
$258.1 million
, compared to
$1.836 billion
in the year-ago period, consisting primarily of $1.495 billion of cash paid in the
ANN
Acquisition and capital expenditures of
$366.5 million
; and
|
•
|
Cash used in financing activities for Fiscal 2017 was
$120.9 million
, consisting primarily of term loan repayments of
$122.5 million
, compared to cash provided by financing activities of $1.522 billion in the year-ago period, consisting primarily of $1.8 billion of borrowing under our new term loan, offset in part by net repayments of debt under our amended revolving credit agreement of $116.0 million, $77.4 million of redemptions and principal repayments of our term loan debt and $42.6 million of payments made for deferred financing costs.
|
|
Fiscal Years Ended
|
||||||||||
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
(millions)
|
||||||||||
Acquisition and integration expenses
(a)
|
$
|
(39.4
|
)
|
|
$
|
(77.4
|
)
|
|
$
|
(31.7
|
)
|
Restructuring and other related charges
(b)
|
(81.9
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of goodwill and other intangible assets
(c)
|
(1,324.4
|
)
|
|
—
|
|
|
(306.4
|
)
|
|||
Non-cash inventory expense associated with the purchase accounting write-up of
ANN
's inventory to fair market value
|
—
|
|
|
(126.9
|
)
|
|
—
|
|
|||
Justice
Pricing Lawsuits
|
—
|
|
|
—
|
|
|
(50.8
|
)
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net sales
|
|
$
|
6,649.8
|
|
|
$
|
6,995.4
|
|
|
$
|
(345.6
|
)
|
|
(4.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
|
(2,790.2
|
)
|
|
(3,066.7
|
)
|
|
276.5
|
|
|
9.0
|
%
|
|||
Cost of goods sold as % of net sales
|
|
42.0
|
%
|
|
43.8
|
%
|
|
|
|
|
|
|
|||
Gross margin
|
|
3,859.6
|
|
|
3,928.7
|
|
|
(69.1
|
)
|
|
(1.8
|
)%
|
|||
Gross margin as % of net sales
|
|
58.0
|
%
|
|
56.2
|
%
|
|
|
|
|
|
|
|||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(1,274.3
|
)
|
|
(1,286.5
|
)
|
|
12.2
|
|
|
0.9
|
%
|
|||
Buying, distribution and occupancy expenses as % of net sales
|
|
19.2
|
%
|
|
18.4
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
(2,068.5
|
)
|
|
(2,112.3
|
)
|
|
43.8
|
|
|
2.1
|
%
|
|||
SG&A expenses as % of net sales
|
|
31.1
|
%
|
|
30.2
|
%
|
|
|
|
|
|
|
|||
Acquisition and integration expenses
|
|
(39.4
|
)
|
|
(77.4
|
)
|
|
38.0
|
|
|
49.1
|
%
|
|||
Restructuring and other related charges
|
|
(81.9
|
)
|
|
—
|
|
|
(81.9
|
)
|
|
NM
|
|
|||
Impairment of goodwill
|
|
(596.3
|
)
|
|
—
|
|
|
(596.3
|
)
|
|
NM
|
|
|||
Impairment of intangible assets
|
|
(728.1
|
)
|
|
—
|
|
|
(728.1
|
)
|
|
NM
|
|
|||
Depreciation and amortization expense
|
|
(384.9
|
)
|
|
(358.7
|
)
|
|
(26.2
|
)
|
|
(7.3
|
)%
|
|||
Total other operating expenses
|
|
(5,173.4
|
)
|
|
(3,834.9
|
)
|
|
(1,338.5
|
)
|
|
34.9
|
%
|
|||
Operating (loss) income
|
|
(1,313.8
|
)
|
|
93.8
|
|
|
(1,407.6
|
)
|
|
NM
|
|
|||
Operating (loss) income as % of net sales
|
|
(19.8
|
)%
|
|
1.3
|
%
|
|
|
|
|
|
|
|||
Interest expense
|
|
(102.2
|
)
|
|
(103.3
|
)
|
|
1.1
|
|
|
1.1
|
%
|
|||
Interest and other income, net
|
|
1.8
|
|
|
0.4
|
|
|
1.4
|
|
|
350.0
|
%
|
|||
Gain on extinguishment of debt
|
|
—
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
NM
|
|
|||
Loss before benefit (provision) for income taxes
|
|
(1,414.2
|
)
|
|
(8.3
|
)
|
|
(1,405.9
|
)
|
|
NM
|
|
|||
Benefit (Provision) for income taxes
|
|
346.9
|
|
|
(3.6
|
)
|
|
350.5
|
|
|
NM
|
|
|||
Effective tax rate
(a)
|
|
24.5
|
%
|
|
(43.4
|
)%
|
|
|
|
|
|
|
|||
Net loss
|
|
$
|
(1,067.3
|
)
|
|
$
|
(11.9
|
)
|
|
$
|
(1,055.4
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(5.42
|
)
|
|
NM
|
|
Diluted
|
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(5.42
|
)
|
|
NM
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|
||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
|
|
$
|
2,322.6
|
|
|
$
|
2,330.9
|
|
|
$
|
(8.3
|
)
|
|
(0.4
|
)%
|
Value Fashion
|
|
1,950.2
|
|
|
2,094.6
|
|
|
(144.4
|
)
|
|
(6.9
|
)%
|
|||
Plus Fashion
|
|
1,353.9
|
|
|
1,463.6
|
|
|
(109.7
|
)
|
|
(7.5
|
)%
|
|||
Kids Fashion
|
|
1,023.1
|
|
|
1,106.3
|
|
|
(83.2
|
)
|
|
(7.5
|
)%
|
|||
Total net sales
|
|
$
|
6,649.8
|
|
|
$
|
6,995.4
|
|
|
$
|
(345.6
|
)
|
|
(4.9
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Comparable sales
(a)
|
|
|
|
|
|
|
|
|
|
(5
|
)%
|
•
|
a 52-week period in Fiscal 2017 compared to the 49-week post-acquisition period in the year-ago period;
|
•
|
a decrease of
7%
in comparable sales at
Ann Taylor
and a decrease of
4%
in comparable sales at
LOFT
; and
|
•
|
18
net store closures at
Ann Taylor
and
4
net store closures at
LOFT
in Fiscal 2017.
|
•
|
a decrease of
$88.7 million
, or
9%
, in comparable sales at
maurices
and a decrease of
$46.6 million
, or
5%
, in comparable sales at
dressbarn
during Fiscal 2017;
|
•
|
an increase of
$22.4 million
in non-comparable sales due to
12
net store openings at
maurices
in Fiscal 2017, offset in part by a decrease of
$19.8 million
due to
30
net store closures at
dressbarn
in Fiscal 2017;
|
•
|
a decrease of
$34.5 million
due to the inclusion of the 53
rd
week in the year-ago period; and
|
•
|
an increase of
$22.8 million
in other revenues primarily due to the segment's new private label credit card program.
|
•
|
a decrease of
$67.3 million
, or
7%
, in comparable sales at
Lane Bryant
and a decrease of
$11.3 million
, or
4%
, in comparable sales at
Catherines
during Fiscal 2017;
|
•
|
a decrease of
$2.3 million
in non-comparable sales due to
8
net store closures at
Lane Bryant
and
14
net store closures at
Catherines
in Fiscal 2017;
|
•
|
a decrease of
$23.0 million
due to the inclusion of the 53
rd
week in the year-ago period; and
|
•
|
a decrease of
$5.8 million
in other revenues due to lower revenue from product sell-off and gift card breakage.
|
•
|
a decrease of
$26.3 million
, or
3%
, in comparable sales at
Justice
during Fiscal 2017;
|
•
|
a decrease of
$23.8 million
in non-comparable sales caused by
37
net store closures in Fiscal 2017;
|
•
|
a decrease of
$24.9 million
due to the inclusion of the 53
rd
week in the year-ago period; and
|
•
|
a decrease of
$8.2 million
in other revenue due to lower wholesale and licensing revenue.
|
•
|
Premium Fashion
gross margin rate
performance reflected an approximate $127 million non-cash purchase accounting expense related to the amortization of the write-up of inventory recorded during Fiscal 2016 discussed above. Excluding the prior year impact of the inventory amortization, gross margin rate performance improved by approximately 220 basis points reflecting significant improvement at both
Ann Taylor
and
LOFT
. Both brands benefited from realization of freight cost synergies related to the Company's ongoing supply chain integration and the segment's cost of goods sold initiative.
|
•
|
Value Fashion
gross margin rate
performance declined approximately 110 basis points as a result of a higher level of promotional selling across the segment and increased markdown requirements to maintain appropriate inventory levels on lower than expected customer demand.
|
•
|
Plus Fashion
gross margin rate
performance improved by approximately 120 basis points
mainly due to more effective inventory management at both
Lane Bryant
and
Catherines
.
|
•
|
Kids Fashion
gross margin
rate
performance declined approximately 370 basis points as a result of a higher level of promotional selling and increased markdown requirements to maintain appropriate inventory levels on lower than expected customer demand.
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|||||||||
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
|
|
$
|
140.9
|
|
|
$
|
13.3
|
|
|
127.6
|
|
|
NM
|
|
|
Value Fashion
|
|
12.2
|
|
|
92.0
|
|
|
(79.8
|
)
|
|
(86.7
|
)%
|
|||
Plus Fashion
|
|
15.5
|
|
|
36.9
|
|
|
(21.4
|
)
|
|
(58.0
|
)%
|
|||
Kids Fashion
|
|
(36.7
|
)
|
|
29.0
|
|
|
(65.7
|
)
|
|
(226.6
|
)%
|
|||
Unallocated acquisition and integration expenses
|
|
(39.4
|
)
|
|
(77.4
|
)
|
|
38.0
|
|
|
(49.1
|
)%
|
|||
Unallocated restructuring and other related charges
|
|
(81.9
|
)
|
|
—
|
|
|
(81.9
|
)
|
|
NM
|
|
|||
Unallocated impairment of goodwill
|
|
(596.3
|
)
|
|
—
|
|
|
(596.3
|
)
|
|
NM
|
|
|||
Unallocated impairment of intangible assets
|
|
(728.1
|
)
|
|
—
|
|
|
(728.1
|
)
|
|
NM
|
|
|||
Total operating (loss) income
|
|
$
|
(1,313.8
|
)
|
|
$
|
93.8
|
|
|
$
|
(1,407.6
|
)
|
|
NM
|
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 30,
2016 |
|
July 25,
2015 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions, except per share data)
|
|
|
|||||||||||
Net sales
|
|
$
|
6,995.4
|
|
|
$
|
4,802.9
|
|
|
$
|
2,192.5
|
|
|
45.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
|
(3,066.7
|
)
|
|
(2,133.7
|
)
|
|
(933.0
|
)
|
|
(43.7
|
)%
|
|||
Cost of goods sold as % of net sales
|
|
43.8
|
%
|
|
44.4
|
%
|
|
|
|
|
|
|
|||
Gross margin
|
|
3,928.7
|
|
|
2,669.2
|
|
|
1,259.5
|
|
|
47.2
|
%
|
|||
Gross margin as % of net sales
|
|
56.2
|
%
|
|
55.6
|
%
|
|
|
|
|
|
|
|||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(1,286.5
|
)
|
|
(856.9
|
)
|
|
(429.6
|
)
|
|
(50.1
|
)%
|
|||
Buying, distribution and occupancy expenses as % of net sales
|
|
18.4
|
%
|
|
17.8
|
%
|
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
|
(2,112.3
|
)
|
|
(1,490.9
|
)
|
|
(621.4
|
)
|
|
(41.7
|
)%
|
|||
SG&A expenses as % of net sales
|
|
30.2
|
%
|
|
31.0
|
%
|
|
|
|
|
|
|
|||
Acquisition and integration expenses
|
|
(77.4
|
)
|
|
(31.7
|
)
|
|
(45.7
|
)
|
|
(144.2
|
)%
|
|||
Impairment of goodwill
|
|
—
|
|
|
(261.7
|
)
|
|
261.7
|
|
|
NM
|
|
|||
Impairment of intangible assets
|
|
—
|
|
|
(44.7
|
)
|
|
44.7
|
|
|
NM
|
|
|||
Depreciation and amortization expense
|
|
(358.7
|
)
|
|
(218.2
|
)
|
|
(140.5
|
)
|
|
(64.4
|
)%
|
|||
Total other operating expenses
|
|
(3,834.9
|
)
|
|
(2,904.1
|
)
|
|
(930.8
|
)
|
|
(32.1
|
)%
|
|||
Operating income (loss)
|
|
93.8
|
|
|
(234.9
|
)
|
|
328.7
|
|
|
NM
|
|
|||
Operating income (loss) as % of net sales
|
|
1.3
|
%
|
|
(4.9
|
)%
|
|
|
|
|
|
|
|||
Interest expense
|
|
(103.3
|
)
|
|
(6.0
|
)
|
|
(97.3
|
)
|
|
NM
|
|
|||
Interest and other income, net
|
|
0.4
|
|
|
0.3
|
|
|
0.1
|
|
|
33.3
|
%
|
|||
Gain on extinguishment of debt
|
|
0.8
|
|
|
—
|
|
|
0.8
|
|
|
NM
|
|
|||
Loss before (provision) benefit for income taxes
|
|
(8.3
|
)
|
|
(240.6
|
)
|
|
232.3
|
|
|
(96.6
|
)%
|
|||
(Provision) Benefit for income taxes
|
|
(3.6
|
)
|
|
3.8
|
|
|
(7.4
|
)
|
|
NM
|
|
|||
Effective tax rate
(a)
|
|
(43.4
|
)%
|
|
1.6
|
%
|
|
|
|
|
|
|
|||
Net loss
|
|
$
|
(11.9
|
)
|
|
$
|
(236.8
|
)
|
|
$
|
224.9
|
|
|
(95.0
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
|
$
|
1.40
|
|
|
(95.9
|
)%
|
Diluted
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
|
$
|
1.40
|
|
|
(95.9
|
)%
|
|
|
Fiscal Years Ended
|
|
|
|
|
|
||||||||
|
|
July 30,
2016 |
|
July 25,
2015 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
|
|
$
|
2,330.9
|
|
|
$
|
—
|
|
|
$
|
2,330.9
|
|
|
NM
|
|
Value Fashion
|
|
2,094.6
|
|
|
2,084.2
|
|
|
10.4
|
|
|
0.5
|
%
|
|||
Plus Fashion
|
|
1,463.6
|
|
|
1,441.9
|
|
|
21.7
|
|
|
1.5
|
%
|
|||
Kids Fashion
|
|
1,106.3
|
|
|
1,276.8
|
|
|
(170.5
|
)
|
|
(13.4
|
)%
|
|||
Total net sales
|
|
$
|
6,995.4
|
|
|
$
|
4,802.9
|
|
|
$
|
2,192.5
|
|
|
45.6
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Comparable sales
(a)
|
|
|
|
|
|
|
|
|
|
(5
|
)%
|
•
|
a decrease of $16.2 million, or 2%, in comparable sales at
maurices
and a decrease of $45.5 million, or 5%, in comparable sales at
dressbarn
during Fiscal 2016;
|
•
|
an increase of $36.0 million in non-comparable sales due to 42 net store openings at
maurices
in Fiscal 2016, offset in part by a decrease of $0.9 million in non-comparable sales due to the timing of 15 net store closures at
dressbarn
in Fiscal 2016;
|
•
|
incremental revenue of $34.5 million due to the inclusion of the 53
rd
week in Fiscal 2016; and
|
•
|
a $2.5 million increase in other revenues.
|
•
|
an increase of $12.7 million, or 1%, in comparable sales at
Lane Bryant
and a decrease of $14.2 million, or 4%, in comparable sales at
Catherines
during Fiscal 2016;
|
•
|
a decrease of $2.7 million in non-comparable sales primarily due to the timing of 7 net store openings at
Lane Bryant
in Fiscal 2016 and a decrease of $3.8 million in non-comparable sales due to 4 net store closures at
Catherines
in Fiscal 2016;
|
•
|
incremental revenue of $23.0 million due to the inclusion of the 53
rd
week in Fiscal 2016; and
|
•
|
a $6.7 million increase in other revenues.
|
•
|
a decrease of $150.8 million, or 13%, in comparable sales during Fiscal 2016 mainly as a result of an anticipated decrease in customer transactions, which was caused by the less promotional selling model;
|
•
|
a $28.8 million decrease in non-comparable stores sales, caused by 41 net store closures during Fiscal 2016;
|
•
|
incremental revenues of $24.9 million due to the inclusion of the 53
rd
week in Fiscal 2016; and
|
•
|
a $15.8 million decrease in wholesale, licensing operations and other revenues.
|
•
|
Value Fashion
gross margin rate
performance improved mainly due to higher mark-on resulting from an increased internally-sourced product mix.
|
•
|
Plus Fashion
gross margin rate
performance improved slightly as a result of reduced promotional selling and tighter inventory management.
|
•
|
Kids Fashion
gross margin
rate
performance improved by approximately 980 basis points as a result of an increased mix of full-ticket selling and tighter inventory management. The gross margin performance reflected a significant reduction in promotional activity, supported by execution of the new strategy, which was based on a hybrid of everyday low price merchandise, along with full ticket fashion merchandise, supported by focused, category-level promotions.
|
|
|
Fiscal Years Ended
|
|
|
|
|
|||||||||
|
|
July 30,
2016 |
|
July 25,
2015 |
|
$ Change
|
|
% Change
|
|||||||
|
|
(millions)
|
|
|
|
|
|||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
|
|
$
|
13.3
|
|
|
$
|
—
|
|
|
$
|
13.3
|
|
|
NM
|
|
Value Fashion
|
|
92.0
|
|
|
136.6
|
|
|
(44.6
|
)
|
|
(32.7
|
)%
|
|||
Plus Fashion
|
|
36.9
|
|
|
29.4
|
|
|
7.5
|
|
|
25.5
|
%
|
|||
Kids Fashion
|
|
29.0
|
|
|
(62.8
|
)
|
|
91.8
|
|
|
(146.2
|
)%
|
|||
Unallocated acquisition and integration expenses
|
|
(77.4
|
)
|
|
(31.7
|
)
|
|
(45.7
|
)
|
|
144.2
|
%
|
|||
Unallocated impairment of goodwill
|
|
—
|
|
|
(261.7
|
)
|
|
261.7
|
|
|
NM
|
|
|||
Unallocated impairment of intangible assets
|
|
—
|
|
|
(44.7
|
)
|
|
44.7
|
|
|
NM
|
|
|||
Total operating income (loss)
|
|
$
|
93.8
|
|
|
$
|
(234.9
|
)
|
|
$
|
328.7
|
|
|
NM
|
|
|
|
Fiscal Years Ended
|
||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
|
(millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
343.6
|
|
|
$
|
445.4
|
|
Net cash used in investing activities
|
|
(268.9
|
)
|
|
(1,835.7
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(120.9
|
)
|
|
1,521.5
|
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(46.2
|
)
|
|
$
|
131.2
|
|
|
|
Fiscal Years Ended
|
||||||
|
|
July 30,
2016 |
|
July 25,
2015 |
||||
|
|
(millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
445.4
|
|
|
$
|
431.3
|
|
Net cash used in investing activities
|
|
(1,835.7
|
)
|
|
(298.1
|
)
|
||
Net cash provided (used in) financing activities
|
|
1,521.5
|
|
|
(49.5
|
)
|
||
Net increase in cash and cash equivalents
|
|
$
|
131.2
|
|
|
$
|
83.7
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Fiscal
2018
|
|
Fiscal 2019-
2020
|
|
Fiscal 2021-
2022
|
|
Fiscal 2023
and
Thereafter
|
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Long-term debt
|
|
$
|
44.0
|
|
|
$
|
157.5
|
|
|
$
|
180.0
|
|
|
$
|
1,215.0
|
|
|
$
|
1,596.5
|
|
Interest payments on long-term debt
|
|
89.6
|
|
|
166.6
|
|
|
146.4
|
|
|
5.3
|
|
|
407.9
|
|
|||||
Operating leases
|
|
585.1
|
|
|
941.6
|
|
|
672.3
|
|
|
608.1
|
|
|
2,807.1
|
|
|||||
Inventory purchase commitments
|
|
761.1
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
762.1
|
|
|||||
Other commitments
|
|
32.0
|
|
|
52.3
|
|
|
19.7
|
|
|
—
|
|
|
104.0
|
|
|||||
Total
|
|
$
|
1,511.8
|
|
|
$
|
1,319.0
|
|
|
$
|
1,018.4
|
|
|
$
|
1,828.4
|
|
|
$
|
5,677.6
|
|
•
|
Long-term debt
represents contractual payments of outstanding borrowings under our borrowing agreements as of
July 29, 2017
.
|
•
|
Interest payments on long-term debt
represent interest payments related to our borrowing agreements. Interest payments on our Term Loan were calculated based on the interest rates in effect as of
July 29, 2017
and the estimated outstanding balance, giving effect to the contractual repayments in future periods. Interest payments on our Amended Revolving Credit Agreement, if any, were calculated based on the outstanding balance and the interest rates in effect as of
July 29, 2017
, as if the borrowings remain outstanding until mandatory repayment is required at expiration in August 2020.
|
•
|
Operating lease obligations
represent the estimated minimum lease rental payments for the Company's real estate and operating equipment in various locations around the world and do 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 or co-tenancy requirements are not being satisfied. 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.
|
•
|
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.
|
•
|
Other commitments
represent contractual payments primarily related to information technology services. While these commitments may be canceled at the Company's option for a termination fee, 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
|
|
16,413,717
|
|
|
$
|
11.42
|
|
|
17,449,970
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
16,413,717
|
|
|
$
|
11.42
|
|
|
17,449,970
|
|
Exhibit
Number
|
|
Description
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Amendment to Amended and Restated By-Laws of Ascena Retail Group, Inc., adopted November 2, 2015, is incorporated by reference to Exhibit 3.1 to the Form 8-K filed on November 3, 2015.
|
|
|
|
|
|
2016 Omnibus Incentive Plan is incorporated by reference to Annex A to the Proxy Statement dated November 3, 2015.*
|
|
|
|
|
|
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.*
|
|
|
|
|
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.*
|
|
|
|
|
|
Employment Letter dated January 23, 2015 with John Pershing is incorporated by reference to Exhibit 10.6 to the Form 10-K filed for the fiscal year ended July 25, 2015.*
|
|
|
|
|
|
Employment Letter dated July 20, 2015 with Robb Giammatteo is incorporated by reference to Exhibit 10.7 to the Form 10-K filed for the fiscal year ended July 25, 2015.*
|
|
|
|
|
10.8
|
|
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.*
|
|
|
|
|
Amendment and Restatement of the Company's Executive Severance Plan effective as of December 9, 2015, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on December 11, 2015.*
|
|
|
|
|
|
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.*
|
|
|
|
|
|
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.
|
|
|
|
|
|
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.
|
|
|
|
|
|
Amendment and Restatement of the Company’s Executive Severance Plan effective March 2, 2016, is incorporated by reference to Exhibit 10.2 to the Form 10-Q for the fiscal quarter ended April 29, 2017.*
|
|
|
|
|
|
Employment Letter dated December 4, 2015 with Duane D. Holloway is incorporated by reference to Exhibit 10.14 to the Form 10-K filed for the fiscal year ended July 30, 2016.*
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Amendment No. 1 to the Company’s Executive Severance Plan effective December 7, 2016, is incorporated by reference to Exhibit 10.3 to the Form 10-Q for the fiscal quarter ended April 29, 2017.*
|
|
|
|
|
|
Employment Letter dated October 4, 2016 with Brian Lynch is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on October 7, 2016.*
|
|
|
|
|
|
Ascena Retail Group, Inc. Transformation Bonus Program Terms and Conditions under the 2016 Omnibus Incentive Plan (as Amended and Restated effective December 10, 2015) effective as of March 30, 2017, filed herewith as Exhibit 10.17.*
|
|
|
|
|
|
Form of Award Agreement pursuant to the Ascena Retail Group, Inc. Transformation Bonus Program under the 2016 Omnibus Incentive Plan (as Amended and Restated effective December 10, 2015) effective as of March 30, 2017, filed herewith as Exhibit 10.18.*
|
|
|
|
|
|
Amended and Restated Credit Card Program Agreement dated April 28, 2017, by and between Ascena Retail Group, Inc. and Capital One, National Association, is incorporated by reference to Exhibit 10.1 to the Form 10-Q for the fiscal quarter ended April 29, 2017.
|
|
|
|
|
|
Amendment and Restatement of the Company's Executive Severance Plan effective as of June 8, 2017, is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on June 8, 2017.*
|
|
|
|
|
|
Employment Letter dated July 29, 2017 with David Jaffe is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 1, 2017.*
|
|
|
|
|
|
Employment Letter dated June 12, 2017 with Brian Lynch is incorporated by reference to Exhibit 10.2 to the Form 8-K filed on August 1, 2017.*
|
|
|
|
|
|
Employment Letter dated June 1, 2017 with Gary Muto is incorporated by reference to Exhibit 10.3 to the Form 8-K filed on August 1, 2017.*
|
|
|
|
|
|
Employment Letter dated August 23, 2017 with Daniel Lamadrid is incorporated by reference to Exhibit 10.1 to the Form 8-K filed on August 28, 2017.*
|
|
|
|
|
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.
|
|
|
|
|
Subsidiaries of the Registrant, filed herewith.
|
|
|
|
|
|
Consent of Independent Registered Public Accounting Firm, filed herewith.
|
|
|
|
|
|
Section 302 Certification of President and Chief Executive Officer, filed herewith.
|
|
|
|
|
|
Section 302 Certification of Chief Financial Officer, filed herewith.
|
|
|
|
|
|
Section 906 Certification of President and Chief Executive Officer, filed herewith.**
|
|
|
|
|
|
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 25, 2017
|
|
by
|
/s/ DAVID JAFFE
|
|
|
|
David Jaffe
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ DAVID JAFFE
|
|
|
|
|
David Jaffe
|
|
Chief Executive Officer, Chairman of the Board of Directors and Director (Principal Executive Officer)
|
|
September 25, 2017
|
|
|
|
|
|
/s/ ROBB GIAMMATTEO
|
|
|
|
|
Robb Giammatteo
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
September 25, 2017
|
|
|
|
|
|
/s/ KEVIN TROLARO
|
|
|
|
|
Kevin Trolaro
|
|
Vice President, Financial Reporting (Interim Principal Accounting Officer)
|
|
September 25, 2017
|
|
|
|
|
|
/s/ KATIE J. BAYNE
|
|
|
|
|
Katie J. Bayne
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ KATE BUGGELN
|
|
|
|
|
Kate Buggeln
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ STEVEN L. KIRSHENBAUM
|
|
|
|
|
Steven L. Kirshenbaum
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ KATHERINE L. KRILL
|
|
|
|
|
Katherine L. Krill
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ MARC LASRY
|
|
|
|
|
Marc Lasry
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ RANDY L. PEARCE
|
|
|
|
|
Randy L. Pearce
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ STACEY RAUCH
|
|
|
|
|
Stacey Rauch
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ CARL S. RUBIN
|
|
|
|
|
Carl S. Rubin
|
|
Director
|
|
September 25, 2017
|
|
|
|
|
|
/s/ LINDA YACCARINO
|
|
|
|
|
Linda Yaccarino
|
|
Director
|
|
September 25, 2017
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
Consolidated Balance Sheets
|
F-
2
|
Consolidated Statements of Operations
|
F-
3
|
Consolidated Statements of Comprehensive Loss
|
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-
42
|
Supplementary Information:
|
|
Quarterly Financial Information (Unaudited)
|
F-
44
|
Selected Financial Information
|
F-
45
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions, except per share data)
|
||||||||||
Net sales
|
|
$
|
6,649.8
|
|
|
$
|
6,995.4
|
|
|
$
|
4,802.9
|
|
Cost of goods sold
|
|
(2,790.2
|
)
|
|
(3,066.7
|
)
|
|
(2,133.7
|
)
|
|||
Gross margin
|
|
3,859.6
|
|
|
3,928.7
|
|
|
2,669.2
|
|
|||
|
|
|
|
|
|
|
||||||
Other operating expenses:
|
|
|
|
|
|
|
|
|
|
|||
Buying, distribution and occupancy expenses
|
|
(1,274.3
|
)
|
|
(1,286.5
|
)
|
|
(856.9
|
)
|
|||
Selling, general and administrative expenses
|
|
(2,068.5
|
)
|
|
(2,112.3
|
)
|
|
(1,490.9
|
)
|
|||
Acquisition and integration expenses
|
|
(39.4
|
)
|
|
(77.4
|
)
|
|
(31.7
|
)
|
|||
Restructuring and other related charges
|
|
(81.9
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of goodwill
|
|
(596.3
|
)
|
|
—
|
|
|
(261.7
|
)
|
|||
Impairment of intangible assets
|
|
(728.1
|
)
|
|
—
|
|
|
(44.7
|
)
|
|||
Depreciation and amortization expense
|
|
(384.9
|
)
|
|
(358.7
|
)
|
|
(218.2
|
)
|
|||
Total other operating expenses
|
|
(5,173.4
|
)
|
|
(3,834.9
|
)
|
|
(2,904.1
|
)
|
|||
Operating (loss) income
|
|
(1,313.8
|
)
|
|
93.8
|
|
|
(234.9
|
)
|
|||
|
|
|
|
|
|
|
|
|||||
Interest expense
|
|
(102.2
|
)
|
|
(103.3
|
)
|
|
(6.0
|
)
|
|||
Interest income and other income, net
|
|
1.8
|
|
|
0.4
|
|
|
0.3
|
|
|||
Gain on extinguishment of debt
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|||
Loss before benefit (provision) for income taxes
|
|
(1,414.2
|
)
|
|
(8.3
|
)
|
|
(240.6
|
)
|
|||
Benefit (provision) for income taxes
|
|
346.9
|
|
|
(3.6
|
)
|
|
3.8
|
|
|||
Net loss
|
|
$
|
(1,067.3
|
)
|
|
$
|
(11.9
|
)
|
|
$
|
(236.8
|
)
|
|
|
|
|
|
|
|
||||||
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
Diluted
|
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
194.8
|
|
|
192.2
|
|
|
162.6
|
|
|||
Diluted
|
|
194.8
|
|
|
192.2
|
|
|
162.6
|
|
|
Fiscal Years Ended
|
||||||||||
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
(millions)
|
||||||||||
Net loss
|
$
|
(1,067.3
|
)
|
|
$
|
(11.9
|
)
|
|
$
|
(236.8
|
)
|
Other comprehensive income (loss), net of tax
:
|
|
|
|
|
|
|
|
|
|||
Net actuarial loss on a defined benefit pension plan, net of income tax benefit of $0.4 million and $2.5 million, respectively
|
(0.7
|
)
|
|
(3.8
|
)
|
|
—
|
|
|||
Foreign currency translation adjustment
|
3.5
|
|
|
(1.3
|
)
|
|
(10.4
|
)
|
|||
Total other comprehensive income (loss) before reclassification
|
2.8
|
|
|
(5.1
|
)
|
|
(10.4
|
)
|
|||
Reclassification of settlement charges for
ANN's
pension plan, net of income tax benefit of $2.9 million
|
4.5
|
|
|
—
|
|
|
—
|
|
|||
Total comprehensive loss
|
$
|
(1,060.0
|
)
|
|
$
|
(17.0
|
)
|
|
$
|
(247.2
|
)
|
|
Fiscal Years Ended
|
||||||||||
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
(millions)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net loss
|
$
|
(1,067.3
|
)
|
|
$
|
(11.9
|
)
|
|
$
|
(236.8
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization expense
|
384.9
|
|
|
358.7
|
|
|
218.2
|
|
|||
Deferred income tax benefit
|
(371.3
|
)
|
|
(26.8
|
)
|
|
(6.6
|
)
|
|||
Deferred rent and other occupancy costs
|
(62.7
|
)
|
|
(74.4
|
)
|
|
(39.1
|
)
|
|||
Gain on extinguishment of debt
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|||
Amortization of acquisition-related inventory write-up
|
—
|
|
|
126.9
|
|
|
—
|
|
|||
Non-cash stock-based compensation expense
|
24.5
|
|
|
26.2
|
|
|
18.2
|
|
|||
Non-cash impairment of tangible assets
|
35.6
|
|
|
13.3
|
|
|
10.8
|
|
|||
Non-cash impairment of goodwill
|
596.3
|
|
|
—
|
|
|
261.7
|
|
|||
Non-cash impairment of intangible assets
|
728.1
|
|
|
—
|
|
|
44.7
|
|
|||
Non-cash interest expense, net
|
12.1
|
|
|
11.3
|
|
|
0.9
|
|
|||
Other non-cash expense (income), net
|
10.9
|
|
|
(0.9
|
)
|
|
(2.4
|
)
|
|||
Excess tax benefits from stock-based compensation
|
—
|
|
|
(1.5
|
)
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Inventories
|
10.0
|
|
|
111.4
|
|
|
63.9
|
|
|||
Accounts payable, accrued liabilities and income taxes payable
|
(26.0
|
)
|
|
(133.6
|
)
|
|
54.2
|
|
|||
Deferred income
|
15.6
|
|
|
7.8
|
|
|
7.7
|
|
|||
Lease-related liabilities
|
31.4
|
|
|
52.5
|
|
|
32.6
|
|
|||
Other balance sheet changes, net
|
21.5
|
|
|
(12.8
|
)
|
|
4.9
|
|
|||
Net cash provided by operating activities
|
343.6
|
|
|
445.4
|
|
|
431.3
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Cash paid for the acquisition of ANN INC., net of cash acquired (Note 5)
|
—
|
|
|
(1,494.6
|
)
|
|
—
|
|
|||
Capital expenditures
|
(258.1
|
)
|
|
(366.5
|
)
|
|
(312.5
|
)
|
|||
Acquisition of intangible assets
|
(11.6
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the sale of assets
|
—
|
|
|
—
|
|
|
8.9
|
|
|||
Purchases of investments
|
—
|
|
|
(1.1
|
)
|
|
(22.3
|
)
|
|||
Proceeds from sales and maturities of investments
|
0.8
|
|
|
26.5
|
|
|
27.8
|
|
|||
Net cash used in investing activities
|
(268.9
|
)
|
|
(1,835.7
|
)
|
|
(298.1
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from revolver borrowings
|
1,221.9
|
|
|
1,510.5
|
|
|
832.3
|
|
|||
Repayments of revolver borrowings
|
(1,221.9
|
)
|
|
(1,626.5
|
)
|
|
(888.3
|
)
|
|||
Proceeds from term loan, net of original issue discount
|
—
|
|
|
1,764.0
|
|
|
—
|
|
|||
Redemptions and repayments of term loan
|
(122.5
|
)
|
|
(77.4
|
)
|
|
—
|
|
|||
Payment of deferred financing costs
|
—
|
|
|
(42.6
|
)
|
|
(2.2
|
)
|
|||
Purchases and retirements of common stock
|
—
|
|
|
(18.6
|
)
|
|
—
|
|
|||
Proceeds from stock options exercised and employee stock purchases
|
1.6
|
|
|
10.6
|
|
|
8.7
|
|
|||
Excess tax benefits from stock-based compensation
|
—
|
|
|
1.5
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(120.9
|
)
|
|
1,521.5
|
|
|
(49.5
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(46.2
|
)
|
|
131.2
|
|
|
83.7
|
|
|||
Cash and cash equivalents at beginning of year
|
371.8
|
|
|
240.6
|
|
|
156.9
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at end of year
|
$
|
325.6
|
|
|
$
|
371.8
|
|
|
$
|
240.6
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained (Deficit)
Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(millions)
|
|||||||||||||||||||||
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
|
1.4
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
|
—
|
|
|
27.6
|
|
|||||
Balance, July 25, 2015
|
163.2
|
|
|
1.6
|
|
|
669.8
|
|
|
859.3
|
|
|
(12.6
|
)
|
|
1,518.1
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11.9
|
)
|
|
—
|
|
|
(11.9
|
)
|
|||||
Common stock issued in connection with the acquisition of ANN INC. (Note 5)
|
31.2
|
|
|
0.3
|
|
|
344.6
|
|
|
—
|
|
|
—
|
|
|
344.9
|
|
|||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.1
|
)
|
|
(5.1
|
)
|
|||||
Shares issued and equity grants made pursuant to stock-based compensation plans
|
1.9
|
|
|
—
|
|
|
35.9
|
|
|
—
|
|
|
—
|
|
|
35.9
|
|
|||||
Purchases and retirements of common stock
|
(2.1
|
)
|
|
—
|
|
|
—
|
|
|
(18.6
|
)
|
|
|
|
(18.6
|
)
|
||||||
Balance, July 30, 2016
|
194.2
|
|
|
1.9
|
|
|
1,050.3
|
|
|
828.8
|
|
|
(17.7
|
)
|
|
1,863.3
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,067.3
|
)
|
|
—
|
|
|
(1,067.3
|
)
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|
7.3
|
|
|||||
Shares issued and equity grants made pursuant to stock-based compensation plans
|
0.9
|
|
|
0.1
|
|
|
17.9
|
|
|
—
|
|
|
—
|
|
|
18.0
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||||
Balance, July 29, 2017
|
195.1
|
|
|
$
|
2.0
|
|
|
$
|
1,068.2
|
|
|
$
|
(238.8
|
)
|
|
$
|
(10.4
|
)
|
|
$
|
821.0
|
|
Buildings and improvements
|
5-40 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
|
2-10 years
|
|
Final Purchase Price Allocation
|
||
|
(millions)
|
||
Cash and cash equivalents
|
$
|
257.6
|
|
Inventories
|
398.3
|
|
|
Prepaid expenses and other current assets
|
118.5
|
|
|
Property and equipment
|
453.3
|
|
|
Goodwill
(a)
|
959.6
|
|
|
Other intangible assets (Note 6):
|
|
||
Trade names
(a)
|
815.0
|
|
|
Customer relationships
|
51.5
|
|
|
Favorable leases
|
38.4
|
|
|
Other assets
|
3.5
|
|
|
Total assets acquired
|
3,095.7
|
|
|
|
|
||
Accounts payable
|
155.6
|
|
|
Accrued expenses and other current liabilities
|
209.0
|
|
|
Deferred income
|
46.0
|
|
|
Lease-related liabilities
|
175.0
|
|
|
Deferred income taxes
|
374.1
|
|
|
Other non-current liabilities
|
38.8
|
|
|
Total liabilities assumed
|
998.5
|
|
|
|
|
||
Total net assets acquired
|
$
|
2,097.2
|
|
|
For the period from August 22, 2015 to July 30, 2016
|
||
|
(millions)
|
||
Net sales
|
$
|
2,330.9
|
|
Net loss
|
$
|
(40.3
|
)
|
|
Fiscal Years Ended
|
||||||
|
July 30,
2016 |
|
July 25,
2015 |
||||
|
(millions, except per share data)
(unaudited)
|
||||||
Pro forma net sales
|
$
|
7,119.1
|
|
|
$
|
7,332.6
|
|
Pro forma net income (loss)
|
$
|
70.3
|
|
|
$
|
(254.0
|
)
|
Pro forma net income (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
0.36
|
|
|
$
|
(1.31
|
)
|
Diluted
|
$
|
0.36
|
|
|
$
|
(1.31
|
)
|
|
|
Premium Fashion
(a)
|
|
Value Fashion
(b)
|
|
Plus Fashion
(c)
|
|
Kids Fashion
|
|
Total
|
||||||||||
|
|
(millions)
|
||||||||||||||||||
Balance at July 25, 2015
|
|
$
|
—
|
|
|
$
|
130.7
|
|
|
$
|
85.4
|
|
|
$
|
103.6
|
|
|
$
|
319.7
|
|
Acquisition-related activity (Note 5)
|
|
733.9
|
|
|
70.0
|
|
|
89.9
|
|
|
65.8
|
|
|
959.6
|
|
|||||
Balance at July 30, 2016
|
|
733.9
|
|
|
200.7
|
|
|
175.3
|
|
|
169.4
|
|
|
1,279.3
|
|
|||||
Impairment losses
|
|
(428.9
|
)
|
|
(107.2
|
)
|
|
(60.2
|
)
|
|
—
|
|
|
(596.3
|
)
|
|||||
Balance at July 29, 2017
|
|
$
|
305.0
|
|
|
$
|
93.5
|
|
|
$
|
115.1
|
|
|
$
|
169.4
|
|
|
$
|
683.0
|
|
|
July 29, 2017
|
|
July 30, 2016
|
||||||||||||||||||||
Description
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets subject to amortization
(a)
:
|
(millions)
|
||||||||||||||||||||||
Proprietary technology
|
$
|
5.3
|
|
|
$
|
(5.3
|
)
|
|
$
|
—
|
|
|
$
|
5.3
|
|
|
$
|
(5.3
|
)
|
|
$
|
—
|
|
Customer relationships
|
54.2
|
|
|
(32.4
|
)
|
|
21.8
|
|
|
54.2
|
|
|
(19.9
|
)
|
|
34.3
|
|
||||||
Favorable leases
|
38.2
|
|
|
(14.4
|
)
|
|
23.8
|
|
|
38.2
|
|
|
(7.1
|
)
|
|
31.1
|
|
||||||
Trade names
|
5.3
|
|
|
(5.3
|
)
|
|
—
|
|
|
5.3
|
|
|
(5.3
|
)
|
|
—
|
|
||||||
Total intangible assets subject to amortization
|
103.0
|
|
|
(57.4
|
)
|
|
45.6
|
|
|
103.0
|
|
|
(37.6
|
)
|
|
65.4
|
|
||||||
Intangible assets not subject to amortization
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Brands and trade names
(b)
|
475.9
|
|
|
—
|
|
|
475.9
|
|
|
1,192.4
|
|
|
—
|
|
|
1,192.4
|
|
||||||
Franchise rights
|
10.9
|
|
|
—
|
|
|
10.9
|
|
|
10.9
|
|
|
—
|
|
|
10.9
|
|
||||||
Total intangible assets not subject to amortization
|
486.8
|
|
|
—
|
|
|
486.8
|
|
|
1,203.3
|
|
|
—
|
|
|
1,203.3
|
|
||||||
Total intangible assets
|
$
|
589.8
|
|
|
$
|
(57.4
|
)
|
|
$
|
532.4
|
|
|
$
|
1,306.3
|
|
|
$
|
(37.6
|
)
|
|
$
|
1,268.7
|
|
|
Expected Amortization
|
||
|
(millions)
|
||
2018
|
$
|
9.4
|
|
2019
|
7.0
|
|
|
2020
|
5.4
|
|
|
Total
|
$
|
21.8
|
|
|
Fiscal Year Ended July 29, 2017
|
||
Cash restructuring charges:
|
(millions)
|
||
Severance and benefit costs
|
$
|
33.2
|
|
Lease termination and store closure costs
|
1.3
|
|
|
Other related charges
(a)
|
33.4
|
|
|
Total cash charges
|
67.9
|
|
|
|
|
||
Non-cash charges:
|
|
||
Impairment of store assets
|
14.0
|
|
|
Total non-cash charges
|
14.0
|
|
|
|
|
||
Total restructuring and other related charges
|
$
|
81.9
|
|
|
Severance and benefit costs
|
|
Lease termination and store closure costs
|
|
Other related charges
|
|
Total
|
||||||||
|
(millions)
|
||||||||||||||
Balance at July 30, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions charged to expense
|
33.2
|
|
|
1.3
|
|
|
33.4
|
|
|
67.9
|
|
||||
Cash payments
|
(15.9
|
)
|
|
(1.3
|
)
|
|
(28.3
|
)
|
|
(45.5
|
)
|
||||
Balance at July 29, 2017
|
$
|
17.3
|
|
|
$
|
—
|
|
|
$
|
5.1
|
|
|
$
|
22.4
|
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
|
(millions)
|
||||||
Premium Fashion
|
|
$
|
208.2
|
|
|
$
|
198.6
|
|
Value Fashion
|
|
180.6
|
|
|
188.8
|
|
||
Plus Fashion
|
|
161.9
|
|
|
154.4
|
|
||
Kids Fashion
|
|
88.6
|
|
|
107.5
|
|
||
Total inventories
|
|
$
|
639.3
|
|
|
$
|
649.3
|
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
|
(millions)
|
||||||
Property and Equipment:
|
|
|
|
|
|
|
||
Land
|
|
$
|
31.1
|
|
|
$
|
32.0
|
|
Buildings and improvements
|
|
257.6
|
|
|
250.8
|
|
||
Leasehold improvements
|
|
950.7
|
|
|
948.7
|
|
||
Furniture, fixtures and equipment
|
|
791.4
|
|
|
718.2
|
|
||
Information technology
|
|
708.0
|
|
|
572.1
|
|
||
Construction in progress
|
|
54.3
|
|
|
155.1
|
|
||
|
|
2,793.1
|
|
|
2,676.9
|
|
||
Less: accumulated depreciation
|
|
(1,355.5
|
)
|
|
(1,046.8
|
)
|
||
Property and equipment, net
|
|
$
|
1,437.6
|
|
|
$
|
1,630.1
|
|
|
Fiscal Years Ended
|
||||||||||
|
July 29, 2017
(a)
|
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
(millions)
|
||||||||||
Premium Fashion
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Value Fashion
|
11.1
|
|
|
8.1
|
|
|
3.8
|
|
|||
Plus Fashion
|
6.3
|
|
|
2.8
|
|
|
0.6
|
|
|||
Kids Fashion
|
3.5
|
|
|
2.4
|
|
|
6.4
|
|
|||
Total impairment charges
|
$
|
21.6
|
|
|
$
|
13.3
|
|
|
$
|
10.8
|
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
|
(millions)
|
||||||
Prepaid expenses
|
|
$
|
73.6
|
|
|
$
|
132.1
|
|
Accounts and other receivables
|
|
82.3
|
|
|
84.7
|
|
||
Short-term investments
|
|
1.0
|
|
|
1.8
|
|
||
Other current assets
|
|
0.5
|
|
|
0.3
|
|
||
Total prepaid expenses and other current assets
|
|
$
|
157.4
|
|
|
$
|
218.9
|
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
|
(millions)
|
||||||
Accrued salary, wages and related expenses
|
|
$
|
147.4
|
|
|
$
|
183.8
|
|
Accrued operating expenses
|
|
151.4
|
|
|
161.6
|
|
||
Sales tax payable
|
|
20.6
|
|
|
34.1
|
|
||
Other
|
|
33.5
|
|
|
34.2
|
|
||
Total accrued expenses and other current liabilities
|
|
$
|
352.9
|
|
|
$
|
413.7
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
|
(millions)
|
||||||
Revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
Less: unamortized debt issuance costs
(a)
|
(4.4
|
)
|
|
(5.8
|
)
|
||
|
(4.4
|
)
|
|
(5.8
|
)
|
||
|
|
|
|
||||
Term loan
|
1,596.5
|
|
|
1,719.0
|
|
||
Less: unamortized original issue discount
(b)
|
(25.2
|
)
|
|
(30.1
|
)
|
||
unamortized debt issuance costs
(b)
|
(28.8
|
)
|
|
(34.6
|
)
|
||
|
1,542.5
|
|
|
1,654.3
|
|
||
|
|
|
|
||||
Less: current portion
|
(44.0
|
)
|
|
(54.0
|
)
|
||
Total long-term debt
|
$
|
1,494.1
|
|
|
$
|
1,594.5
|
|
Fiscal Year
|
|
Amount
|
||
|
|
(millions)
|
||
2018
|
|
$
|
44.0
|
|
2019
|
|
90.0
|
|
|
2020
|
|
67.5
|
|
|
2021
|
|
90.0
|
|
|
2022
|
|
90.0
|
|
|
Thereafter
|
|
1,215.0
|
|
|
Total maturities
|
|
$
|
1,596.5
|
|
Level 1
|
Quoted prices for identical instruments in active markets;
|
Level 2
|
Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are recently traded (not active); and
|
Level 3
|
Instruments with little, if any, market activity are valued using significant unobservable inputs or valuation techniques.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Domestic
|
|
$
|
(1,451.0
|
)
|
|
$
|
(56.0
|
)
|
|
$
|
(303.1
|
)
|
Foreign
|
|
36.8
|
|
|
47.7
|
|
|
62.5
|
|
|||
Total loss before (benefit) provision for income taxes
|
|
$
|
(1,414.2
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(240.6
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
Current:
|
|
(millions)
|
||||||||||
Federal
|
|
$
|
6.9
|
|
|
$
|
7.7
|
|
|
$
|
(20.8
|
)
|
State and local
|
|
12.6
|
|
|
10.2
|
|
|
8.8
|
|
|||
Foreign
|
|
4.9
|
|
|
12.5
|
|
|
14.8
|
|
|||
|
|
24.4
|
|
|
30.4
|
|
|
2.8
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
(308.3
|
)
|
|
(21.7
|
)
|
|
0.9
|
|
|||
State and local
|
|
(64.8
|
)
|
|
(3.2
|
)
|
|
(6.5
|
)
|
|||
Foreign
|
|
1.8
|
|
|
(1.9
|
)
|
|
(1.0
|
)
|
|||
|
|
(371.3
|
)
|
|
(26.8
|
)
|
|
(6.6
|
)
|
|||
Total (benefit) provision for income taxes
|
|
$
|
(346.9
|
)
|
|
$
|
3.6
|
|
|
$
|
(3.8
|
)
|
|
Fiscal Years Ended
|
||||||||||
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
(millions)
|
||||||||||
Benefit for income taxes at the U.S. federal statutory rate
|
$
|
(495.0
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
(84.3
|
)
|
Increase (decrease) due to:
|
|
|
|
|
|
||||||
State and local income taxes, net of federal benefit
|
(39.7
|
)
|
|
2.4
|
|
|
4.1
|
|
|||
Tax benefit related to deferred compensation
|
—
|
|
|
—
|
|
|
(13.7
|
)
|
|||
Goodwill impairment
|
184.3
|
|
|
—
|
|
|
91.6
|
|
|||
Net change relating to uncertain income tax benefits
|
3.2
|
|
|
3.3
|
|
|
(0.7
|
)
|
|||
Indefinitely reinvested foreign earnings
|
—
|
|
|
0.1
|
|
|
1.7
|
|
|||
Other – net
|
0.3
|
|
|
0.7
|
|
|
(2.5
|
)
|
|||
Total (benefit) provision for income taxes
|
$
|
(346.9
|
)
|
|
$
|
3.6
|
|
|
$
|
(3.8
|
)
|
|
|
July 29,
2017 |
|
July 30,
2016 |
||||
Deferred tax assets
(a)
:
|
|
(millions)
|
||||||
Inventories
|
|
$
|
35.6
|
|
|
$
|
31.4
|
|
Net operating loss carryforwards and tax credits
|
|
66.6
|
|
|
38.3
|
|
||
Accrued payroll and benefits
|
|
83.1
|
|
|
91.5
|
|
||
Share-based compensation
|
|
25.0
|
|
|
24.8
|
|
||
Straight-line rent
|
|
62.2
|
|
|
57.3
|
|
||
Federal benefit of uncertain tax positions
|
|
20.6
|
|
|
19.4
|
|
||
Gift cards and merchandise credits
|
|
16.8
|
|
|
14.3
|
|
||
Other
|
|
23.2
|
|
|
23.1
|
|
||
Total deferred tax assets
|
|
333.1
|
|
|
300.1
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Depreciation
|
|
125.0
|
|
|
148.9
|
|
||
Amortization
|
|
197.7
|
|
|
512.8
|
|
||
Foreign unremitted earnings
|
|
47.1
|
|
|
40.1
|
|
||
Other
|
|
21.7
|
|
|
22.7
|
|
||
Total deferred tax liabilities
|
|
391.5
|
|
|
724.5
|
|
||
Valuation allowance
|
|
(16.9
|
)
|
|
(12.9
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(75.3
|
)
|
|
$
|
(437.3
|
)
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Unrecognized tax benefit beginning balance
|
|
$
|
43.2
|
|
|
$
|
34.1
|
|
|
$
|
29.9
|
|
Additions related to the
ANN
Acquisition
|
|
—
|
|
|
9.6
|
|
|
—
|
|
|||
Additions related to current period tax positions
|
|
2.0
|
|
|
2.2
|
|
|
1.6
|
|
|||
Additions related to tax positions in prior years
|
|
1.9
|
|
|
1.0
|
|
|
6.7
|
|
|||
Reductions related to prior period tax positions
|
|
(0.2
|
)
|
|
(3.0
|
)
|
|
(3.2
|
)
|
|||
Reductions related to settlements with taxing authorities
|
|
(0.1
|
)
|
|
—
|
|
|
(0.3
|
)
|
|||
Reductions related to expiration of statute of limitations
|
|
(1.5
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|||
Unrecognized tax benefit ending balance
|
|
$
|
45.3
|
|
|
$
|
43.2
|
|
|
$
|
34.1
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Accrued interest and penalties beginning balance
|
|
$
|
17.2
|
|
|
$
|
11.5
|
|
|
$
|
13.8
|
|
Additions related to the
ANN
Acquisition
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|||
Additions (reductions) charged to expense, net
|
|
2.2
|
|
|
1.4
|
|
|
(2.3
|
)
|
|||
Accrued interest and penalties ending balance
|
|
$
|
19.4
|
|
|
$
|
17.2
|
|
|
$
|
11.5
|
|
A summary of occupancy costs follows:
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Base rentals
|
|
$
|
611.1
|
|
|
$
|
608.1
|
|
|
$
|
404.4
|
|
Percentage rentals
|
|
27.4
|
|
|
33.7
|
|
|
20.5
|
|
|||
Other occupancy costs, primarily CAM and real estate taxes
|
|
225.0
|
|
|
210.5
|
|
|
143.6
|
|
|||
Total
|
|
$
|
863.5
|
|
|
$
|
852.3
|
|
|
$
|
568.5
|
|
Fiscal Years
|
Minimum Operating
Lease Payments
(a) (b)
|
||
|
(millions)
|
||
2018
|
$
|
585.1
|
|
2019
|
502.4
|
|
|
2020
|
439.2
|
|
|
2021
|
370.2
|
|
|
2022
|
302.1
|
|
|
Thereafter
|
608.1
|
|
|
Total future minimum rentals
|
$
|
2,807.1
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
July 29,
2017
|
|
July 30,
2016
|
|
July 25,
2015
|
|||
|
|
(millions)
|
|||||||
Basic
|
|
194.8
|
|
|
192.2
|
|
|
162.6
|
|
Dilutive effect of stock options, restricted stock and restricted stock units
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
Diluted shares
|
|
194.8
|
|
|
192.2
|
|
|
162.6
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Compensation expense
|
|
$
|
24.5
|
|
|
$
|
26.2
|
|
|
$
|
18.2
|
|
Income tax benefit
|
|
$
|
9.3
|
|
|
$
|
10.1
|
|
|
$
|
6.8
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
Expected term (years)
|
|
3.0
|
|
|
3.1
|
|
|
3.9
|
|
|||
Expected volatility
|
|
37.6
|
%
|
|
35.4
|
%
|
|
38.8
|
%
|
|||
Risk-free interest rate
|
|
1.3
|
%
|
|
1.5
|
%
|
|
1.8
|
%
|
|||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted-average grant date fair value
|
|
$
|
1.87
|
|
|
$
|
4.14
|
|
|
$
|
4.97
|
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average Remaining Contractual
Terms
|
|
Aggregate
Intrinsic
Value
(a)
|
|||||
|
|
(thousands)
|
|
|
|
|
(years)
|
|
(millions)
|
||||
Options outstanding – July 30, 2016
|
|
14,813.4
|
|
|
$
|
14.33
|
|
|
4.8
|
|
$
|
0.9
|
|
Granted
|
|
6,409.2
|
|
|
5.33
|
|
|
|
|
|
|
||
Exercised
|
|
(13.6
|
)
|
|
8.03
|
|
|
|
|
|
|
||
Canceled/Forfeited
|
|
(4,795.3
|
)
|
|
12.29
|
|
|
|
|
|
|
||
Options outstanding – July 29, 2017
|
|
16,413.7
|
|
|
$
|
11.42
|
|
|
4.5
|
|
$
|
0.2
|
|
Options vested and expected to vest at July 29, 2017
(b)
|
|
16,093.0
|
|
|
$
|
11.52
|
|
|
4.5
|
|
$
|
0.1
|
|
Options exercisable at July 29, 2017
|
|
8,332.1
|
|
|
$
|
14.29
|
|
|
3.5
|
|
$
|
—
|
|
(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
|
|||||
|
Number of
Shares
|
|
Weighted-
Average
Grant Date
Fair Value Per
Share
|
|||
|
(thousands)
|
|
|
|||
Nonvested at July 30, 2016
|
2,258.8
|
|
|
$
|
13.62
|
|
Granted
|
2,504.4
|
|
|
5.28
|
|
|
Vested
|
(681.2
|
)
|
|
13.01
|
|
|
Canceled/Forfeited
|
(972.0
|
)
|
|
10.37
|
|
|
Nonvested at July 29, 2017
|
3,110.0
|
|
|
$
|
8.05
|
|
•
|
Premium Fashion
segment – consists primarily of the specialty retail, outlet and ecommerce operations of the
Ann Taylor
and
LOFT
brands.
|
•
|
Value Fashion
segment – consists of the specialty retail, outlet and ecommerce operations of the
maurices
and
dressbarn
brands.
|
•
|
Plus Fashion
segment – consists of the specialty retail, outlet and ecommerce operations of the
Lane Bryant
and
Catherines
brands.
|
•
|
Kids Fashion
segment – consists of the specialty retail, outlet, ecommerce and licensing operations of the
Justice
brand.
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
Net sales:
|
|
(millions)
|
||||||||||
Premium Fashion
(a)
|
|
$
|
2,322.6
|
|
|
$
|
2,330.9
|
|
|
$
|
—
|
|
Value Fashion
|
|
1,950.2
|
|
|
2,094.6
|
|
|
2,084.2
|
|
|||
Plus Fashion
|
|
1,353.9
|
|
|
1,463.6
|
|
|
1,441.9
|
|
|||
Kids Fashion
|
|
1,023.1
|
|
|
1,106.3
|
|
|
1,276.8
|
|
|||
Total net sales
|
|
$
|
6,649.8
|
|
|
$
|
6,995.4
|
|
|
$
|
4,802.9
|
|
|
|
|
|
|
|
|
||||||
Operating (loss) income:
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
(a) (b)
|
|
140.9
|
|
|
13.3
|
|
|
—
|
|
|||
Value Fashion
|
|
12.2
|
|
|
92.0
|
|
|
136.6
|
|
|||
Plus Fashion
|
|
15.5
|
|
|
36.9
|
|
|
29.4
|
|
|||
Kids Fashion
|
|
(36.7
|
)
|
|
29.0
|
|
|
(62.8
|
)
|
|||
Unallocated acquisition and integration expenses
|
|
(39.4
|
)
|
|
(77.4
|
)
|
|
(31.7
|
)
|
|||
Unallocated restructuring and other related charges
(c)
|
|
(81.9
|
)
|
|
—
|
|
|
—
|
|
|||
Unallocated impairment of goodwill
(Note 6)
|
|
(596.3
|
)
|
|
—
|
|
|
(261.7
|
)
|
|||
Unallocated impairment of intangible assets
(Note 6)
|
|
(728.1
|
)
|
|
—
|
|
|
(44.7
|
)
|
|||
Total operating (loss) income
|
|
$
|
(1,313.8
|
)
|
|
$
|
93.8
|
|
|
$
|
(234.9
|
)
|
(a)
|
The results of the
Premium Fashion
segment for the post-acquisition period from August 22, 2015 to July 30, 2016 are included within the Company's consolidated results of operations for Fiscal 2016.
|
(b)
|
The results of the
Premium Fashion
segment
for Fiscal 2016 include approximately
$126.9 million
of non-cash purchase accounting expense related to the amortization of the write-up of inventory to fair market value.
|
|
Fiscal Year Ended July 29, 2017
|
||
|
(millions)
|
||
Cash related charges:
|
|
|
|
Restructuring charges:
|
|
||
Premium Fashion
|
$
|
3.0
|
|
Value Fashion
|
8.2
|
|
|
Plus Fashion
|
10.6
|
|
|
Kids Fashion
|
2.4
|
|
|
Corporate
|
10.3
|
|
|
Other related charges
|
33.4
|
|
|
|
67.9
|
|
|
Non-cash charges:
|
|
||
Impairment of store assets:
|
|
||
Premium Fashion
|
3.2
|
|
|
Value Fashion
|
4.4
|
|
|
Plus Fashion
|
4.8
|
|
|
Kids Fashion
|
1.6
|
|
|
|
14.0
|
|
|
|
|
||
Total restructuring and other related charges
|
$
|
81.9
|
|
|
|
Fiscal Years Ended
|
||||||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
Depreciation and amortization expense:
|
|
(millions)
|
||||||||||
Premium Fashion
(a)
|
|
$
|
134.2
|
|
|
$
|
128.0
|
|
|
$
|
—
|
|
Value Fashion
|
|
111.2
|
|
|
106.5
|
|
|
94.0
|
|
|||
Plus Fashion
|
|
68.4
|
|
|
52.1
|
|
|
54.0
|
|
|||
Kids Fashion
|
|
71.1
|
|
|
72.1
|
|
|
70.2
|
|
|||
Total depreciation and amortization expense
|
|
$
|
384.9
|
|
|
$
|
358.7
|
|
|
$
|
218.2
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures
(b)
:
|
|
|
|
|
|
|
|
|
|
|||
Premium Fashion
(a)
|
|
$
|
64.2
|
|
|
$
|
57.0
|
|
|
$
|
—
|
|
Value Fashion
|
|
35.6
|
|
|
90.6
|
|
|
103.9
|
|
|||
Plus Fashion
|
|
21.2
|
|
|
40.9
|
|
|
54.1
|
|
|||
Kids Fashion
|
|
17.9
|
|
|
19.8
|
|
|
51.5
|
|
|||
Corporate
(c)
|
|
119.2
|
|
|
158.2
|
|
|
103.0
|
|
|||
Total capital expenditures
|
|
$
|
258.1
|
|
|
$
|
366.5
|
|
|
$
|
312.5
|
|
|
|
Fiscal Years Ended
|
|||||||
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
|||
|
|
(millions)
|
|||||||
Apparel
|
|
85
|
%
|
|
87
|
%
|
|
84
|
%
|
Accessories and other
|
|
15
|
%
|
|
13
|
%
|
|
16
|
%
|
Total net sales
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Fiscal Years Ended
|
||||||||||
Cash Interest and Taxes:
|
|
July 29,
2017 |
|
July 30,
2016 |
|
July 25,
2015 |
||||||
|
|
(millions)
|
||||||||||
Cash paid for interest
|
|
$
|
90.8
|
|
|
$
|
76.3
|
|
|
$
|
4.6
|
|
Cash paid (received) for income taxes
|
|
$
|
3.5
|
|
|
$
|
(9.2
|
)
|
|
$
|
(5.9
|
)
|
Fiscal Year Ended July 29, 2017
|
|
Fourth
Quarter
(a)(b)
|
|
Third
Quarter
(a)(b)(c)
|
|
Second
Quarter
(a)(b)
|
|
First
Quarter
(a)(b)
|
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
1,658.1
|
|
|
$
|
1,565.1
|
|
|
$
|
1,748.2
|
|
|
$
|
1,678.4
|
|
Gross margin
|
|
951.4
|
|
|
948.4
|
|
|
945.8
|
|
|
1,014.0
|
|
||||
Net (loss) income
|
|
(15.8
|
)
|
|
(1,030.7
|
)
|
|
(35.2
|
)
|
|
14.4
|
|
||||
Net (loss) income per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.08
|
)
|
|
$
|
(5.29
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
(0.08
|
)
|
|
$
|
(5.29
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
0.07
|
|
Fiscal Year Ended July 30, 2016
|
|
Fourth
Quarter
(a)(d)
|
|
Third
Quarter
(a)(e)
|
|
Second
Quarter
(a)(e)(f)
|
|
First
Quarter
(a)(e)(f)
|
||||||||
|
|
(millions, except per share data)
|
||||||||||||||
Net sales
|
|
$
|
1,812.3
|
|
|
$
|
1,669.3
|
|
|
$
|
1,841.8
|
|
|
$
|
1,672.0
|
|
Gross margin
|
|
1,041.3
|
|
|
1,016.7
|
|
|
968.0
|
|
|
902.7
|
|
||||
Net income (loss)
|
|
13.8
|
|
|
15.0
|
|
|
(22.6
|
)
|
|
(18.1
|
)
|
||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.10
|
)
|
Diluted
|
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.10
|
)
|
(e)
|
The first quarter of Fiscal 2016 includes the post-acquisition results of our
Premium Fashion
segment,
which was acquired on August 21, 2015. Our
Premium Fashion
segment's first, second and third quarters of Fiscal 2016 ended October 31, 2015, January 30, 2016 and April 30, 2016, respectively, whereas the first, second and third quarters of Fiscal 2016 for the Company's other segments ended October 24, 2015, January 23, 2016 and April 23, 2016, respectively. The effect of the one-week reporting period difference is not material. All segments of the Company are on the same fiscal calendar at the end of Fiscal 2016.
|
|
Fiscal Years Ended
(a)
|
||||||||||||||||||
|
July 29,
2017
|
|
July 30,
2016
(b)
|
|
July 25,
2015
(c)
|
|
July 26,
2014
|
|
July 27,
2013
|
||||||||||
|
(millions, except for share data)
|
||||||||||||||||||
Statement of Operations Data:
|
|
||||||||||||||||||
Net sales
|
$
|
6,649.8
|
|
|
$
|
6,995.4
|
|
|
$
|
4,802.9
|
|
|
$
|
4,790.6
|
|
|
$
|
4,714.9
|
|
Acquisition and integration expenses
|
(39.4
|
)
|
|
(77.4
|
)
|
|
(31.7
|
)
|
|
(34.0
|
)
|
|
(34.6
|
)
|
|||||
Restructuring and other related charges
|
(81.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impairment of goodwill
(d)
|
(596.3
|
)
|
|
—
|
|
|
(261.7
|
)
|
|
—
|
|
|
—
|
|
|||||
Impairment of intangible assets
(d)
|
(728.1
|
)
|
|
—
|
|
|
(44.7
|
)
|
|
(13.0
|
)
|
|
—
|
|
|||||
Depreciation and amortization expense
|
(384.9
|
)
|
|
(358.7
|
)
|
|
(218.2
|
)
|
|
(193.6
|
)
|
|
(176.0
|
)
|
|||||
Operating (loss) income
|
(1,313.8
|
)
|
|
93.8
|
|
|
(234.9
|
)
|
|
210.8
|
|
|
265.3
|
|
|||||
Net (loss) income from continuing operations
|
(1,067.3
|
)
|
|
(11.9
|
)
|
|
(236.8
|
)
|
|
138.2
|
|
|
155.2
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income from continuing operations per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
|
$
|
0.86
|
|
|
$
|
0.99
|
|
Diluted
|
$
|
(5.48
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(1.46
|
)
|
|
$
|
0.84
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
325.6
|
|
|
$
|
371.8
|
|
|
$
|
240.6
|
|
|
$
|
156.9
|
|
|
$
|
186.4
|
|
Working capital
|
185.2
|
|
|
226.3
|
|
|
232.2
|
|
|
291.7
|
|
|
306.3
|
|
|||||
Total assets
|
3,871.5
|
|
|
5,506.3
|
|
|
2,906.2
|
|
|
3,118.6
|
|
|
2,865.2
|
|
|||||
Total debt
|
1,538.1
|
|
|
1,648.5
|
|
|
106.5
|
|
|
166.8
|
|
|
129.1
|
|
|||||
Total equity
|
$
|
821.0
|
|
|
$
|
1,863.3
|
|
|
$
|
1,518.1
|
|
|
$
|
1,737.7
|
|
|
$
|
1,556.4
|
|
Measurement Period
|
$150M in Realized Savings
|
$250M in Realized Savings
|
$350M in Realized Savings
|
$450M in Realized Savings
|
Multiple of 2017 Salary for Realized Savings Achievement
|
||||
Fiscal Year End
|
|
|
|
|
Cumulative
|
|
|
|
|
(a)
|
Require the Covered Person to repay all or a portion of any cash Incentive Compensation paid to the Covered Person with respect to such Look-Back Year;
|
(b)
|
Cancel all or a portion of any vested and unvested Incentive Compensation awarded to the Covered Person with respect to such Look-Back Year; and
|
(c)
|
Require the Covered Person to repay all or a portion of any gains realized by the Covered Person on the: (i) vesting and payment of shares of common stock underlying restricted stock units; (ii) lapsing of restrictions of restricted stock; and (iii) exercise of stock options and the subsequent sale of shares of common stock acquired on the exercise of stock options.
|
|
|
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
|
|
|
|
ASNA Value Fashion LLC
|
|
Delaware
|
|
|
|
Duluth Holdings, LLC
|
|
Minnesota
|
|
|
|
Duluth Real Estate, LLC
|
|
Delaware
|
|
|
|
Subsidiaries of Tween Brands, Inc.
|
|
|
|
|
|
Tween Brands Direct Services, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Agency, Inc.
|
|
Ohio
|
|
|
|
Tween Brands Investment, LLC
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Ohio
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|
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Tween Brands Marketing, Inc.
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Ohio
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Too G.C., LLC
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Ohio
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Tween Brands Service Co.
|
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Ohio
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|
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Ascena Global Sourcing Hong Kong Limited
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Hong Kong
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Worldwide Retail Holdings, Inc.
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Delaware
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Worldwide Retail Holdings, B.V.
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Netherlands
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Worldwide Retail Holdings, Cooperatief UA
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Netherlands
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Tween Brands Canada Stores Ltd.
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Ontario, Canada
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Ascena Global Sourcing (Shanghai) Limited
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Shanghai, China
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Maurices Canada Stores, Ltd.
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Ontario, Canada
|
|
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Dress Barn Canada Stores, Ltd.
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Ontario, Canada
|
|
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Kirkstone Company Limited
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Hong Kong
|
|
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FSHC, LLC
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Delaware
|
|
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Trimoland Limited
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Hong Kong
|
|
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Yardarm Trading Limited
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Hong Kong
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|
|
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Kirkstone India Private Limited
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India
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|
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Subsidiaries of Charming Shoppes, Inc.
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|
|
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Delaware
|
|
|
|
C.S.F. Corp.
|
|
Delaware
|
|
|
|
Catalog Receivables LLC
|
|
Delaware
|
|
|
|
Catalog Seller LLC
|
|
Delaware
|
|
|
|
Catherines Stores Corporation
|
|
Tennessee
|
|
|
|
Catherines, Inc.
|
|
Delaware
|
|
|
|
CCTM, 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 II Inc.
|
|
Delaware
|
CSGC, Inc.
|
|
Ohio
|
|
|
|
Lane Bryant Charities, Inc.
|
|
Pennsylvania
|
|
|
|
CSI Industries, Inc.
|
|
Delaware
|
|
|
|
CSPE, LLC
|
|
Pennsylvania
|
|
|
|
Fashion Apparel Sourcing, Inc.
|
|
Delaware
|
|
|
|
Fashion Service LLC
|
|
Delaware
|
|
|
|
Fashion Service Fulfillment Corporation
|
|
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
|
|
|
|
Lane Bryant of Pennsylvania, Inc.
|
|
Pennsylvania
|
|
|
|
Lane Bryant Purchasing Corp.
|
|
Ohio
|
|
|
|
Lane Bryant, Inc.
|
|
Delaware
|
|
|
|
PSTM, Inc.
|
|
Delaware
|
|
|
|
Sonsi, Inc.
|
|
Delaware
|
|
|
|
Spirit of America, Inc.
|
|
Delaware
|
|
|
|
Winks Lane, Inc.
|
|
Pennsylvania
|
|
|
|
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Subsidiaries of ANN INC.
|
|
|
|
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AnnTaylor, Inc.
|
|
Delaware
|
|
|
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Annco, Inc.
|
|
Delaware
|
|
|
|
AnnTaylor Retail, Inc.
|
|
Florida
|
|
|
|
ANN Cards Services, Inc.
|
|
Florida
|
|
|
|
AnnTaylor Distribution 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 25, 2017
|
|
/s/ David Jaffe
|
|
David Jaffe
|
|
Chief Executive Officer
|
Date: September 25, 2017
|
|
/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
|
|
Chief Executive Officer
|
|
September 25, 2017
|
(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 25, 2017
|