Dress Barn, Inc. Reports Fourth Quarter and Fiscal Year 2009 Sales and Earnings Results

Dress Barn, Inc. (NASDAQ - DBRN) today reported sales and earnings results for its fourth quarter and fiscal year ended July 25, 2009.

Fiscal Fourth Quarter Results

Net sales for the fiscal fourth quarter ended July 25, 2009 increased 4% to $398.9 million from $382.3 million for the fiscal fourth quarter ended July 26, 2008. Comparable store sales for the quarter increased 1%.

By division, net sales for dressbarn stores increased 6% to $253.7 million compared to $238.5 million for the fourth quarter of fiscal 2008, driven primarily by a comparable store sales increase of 4% for the quarter. Net sales for maurices stores increased 1% to $145.2 million compared to $143.8 million for the fourth quarter of fiscal 2008. The increase was driven by new stores offset by a comparable store sales decrease of 5% for the quarter.

Net earnings for the fiscal fourth quarter were $26.4 million, or $0.41 per diluted share. During the quarter the Company incurred certain unusual items that are not indicative of on-going operations. Accordingly, a GAAP to non-GAAP reconciliation of these items is provided later in this release for a more valid comparison to the prior year. Net earnings on this non-GAAP basis were $25.2 million, or $0.39 per diluted share. This compares to net earnings of $22.1 million, or $0.34 per diluted share for the fourth quarter of fiscal 2008.

2009 Fiscal Year Results

Net sales for the fiscal year ended July 25, 2009 increased 3% to $1.494 billion from $1.444 billion for the fiscal year ended July 26, 2008. Comparable store sales for the year were flat.

By division, net sales for dressbarn stores increased 2% to $906.2 million compared to $887.6 million for fiscal 2008; comparable store sales for the fiscal year were flat. Net sales for maurices increased 6% to $588.0 million, compared to $556.6 million for fiscal 2008; comparable store sales for the year decreased 1%.

Net earnings for fiscal 2009 were $69.7 million, or $1.11 per diluted share. Net earnings on the non-GAAP basis described later in this release were $68.5 million or $1.09 per diluted share. This compares to net earnings of $74.1 million, or $1.15 per diluted share for fiscal 2008.

Commentary

David R. Jaffe, President and Chief Executive Officer commented, “We are pleased with our performance in a challenging environment due largely to effective merchandising that has communicated an appealing combination of fashion and value to consumers. At the same time, we have continued to carefully control costs and inventory levels and remain focused on generating cash.”

Mr. Jaffe continued, “This year, we generated $115 million of free cash flow. Our long-held belief continues to be that a highly liquid balance sheet positions us well to continue to grow our business.

We are awaiting completion of our previously announced merger with Tween Brands, whose dominant position in the tween specialty retailing market can further extend our demographic reach and create significant value for our shareholders.”

Mr. Jaffe concluded, “As we move forward, we believe that there remains an excellent opportunity for our concepts to perform well and for our company to expand the scope of its business. We will continue to have significant untapped liquidity and look to maximize the performance of our operations in the year ahead. While we expect the consumer environment to remain challenging, we believe we are in the right position to make the most of the opportunities for growth.”

Reconciliation of GAAP to Non-GAAP Earnings and Diluted EPS

Net earnings and diluted earnings per share, excluding the impairment and merger related costs offset by the tax benefit of the prior year’s tax positions are shown below as non-GAAP measures. Because management believes these expenses and tax benefit may not be indicative of normal operating items, management believes these non-GAAP measures are useful to investors as an alternative for measuring the Company’s operating performance and comparing it against the prior year fiscal fourth quarter and fiscal year.

Fourth Quarter Fiscal 2009:
(in millions, except per share amounts)			Earnings before income taxes		Income taxes		Net earnings		Diluted earnings per share
Reported GAAP Basis			$ 35.0		$ 8.6		$ 26.4		$ 0.41
Adjustments to SG&A expenses:
Merger related costs			3.6		1.0		2.6		0.04
Impairment of trade name			2.0		0.8		1.2		0.02
Tax benefit of prior year’s tax positions			--		5.0		(5.0)		(0.08)
Non-GAAP basis			$ 40.6		$ 15.4		$ 25.2		$ 0.39
Fiscal Year 2009:
(in millions, except per share amounts)			Earnings before income taxes		Income taxes		Net earnings		Diluted earnings per share
Reported GAAP Basis			$ 106.6		$ 36.9		$ 69.7		$ 1.11
Adjustments to SG&A expenses:
Merger related costs			3.6		1.0		2.6		0.04
Impairment of trade name			2.0		0.8		1.2		0.02
Tax benefit of prior year’s tax positions			--		5.0		(5.0)		(0.08)
Non-GAAP basis			$ 112.2		$ 43.7		$ 68.5		$ 1.09

Merger Update

On June 24, 2009, the Company entered into a definitive agreement with Tween Brands, Inc. pursuant to which a subsidiary of the Company agreed to merge with Tween Brands, Inc. in a stock-for-stock transaction. The transaction continues to progress with anticipated completion in the fourth quarter of calendar 2009. On July 28, 2009, the Company and Tween Brands, Inc. submitted notification and report forms under the Hart Scott Rodino Act with the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice. The Hart Scott Rodino Act waiting period expired with no comment. In addition, on August 11, 2009, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission. The S-4 contains Tween Brands, Inc. proxy statement. Once the S-4 is declared effective, Tween Brands, Inc. is required to distribute a definitive proxy statement to its stockholders in connection with a meeting of Tween Brands stockholders to approve the merger agreement.

Fiscal July 2010 Guidance

The Company’s guidance for earnings per diluted share for fiscal July 2010 is in the range of $1.10 to $1.20. This guidance is based solely on dressbarn and maurices estimated results. We expect to update this guidance after the completion of the Tween Brands merger. This estimate is also based upon various assumptions for the year including a low single digit increase in comparable store sales. Fiscal 2010 is a 53-week year, with the fourth quarter including 14 weeks. The Company plans to open approximately 50 stores and close 25 stores, ending fiscal 2010 with approximately 1,585 dressbarn and maurices stores in operation.

Conference Call Information

The Company will conduct a conference call today, September 16, 2009 at 4:30 PM Eastern Time to review its fourth quarter and year-end financial results followed by a question and answer session. Parties interested in participating in this call should dial in at (617) 213-8836 prior to the start time, the passcode is 61075161. The call will also be simultaneously broadcast at www.dressbarn.com. A recording of the call will be available shortly after its conclusion and until October 16, 2009 by dialing (617) 801-6888, the passcode is 61288879.

ABOUT DRESS BARN, INC.

Dress Barn, Inc. (NASDAQ - DBRN), is a leading national specialty apparel retailer offering quality career and casual fashion apparel through its dressbarn and maurices brands. As of July 25, 2009, the Company operated 838 dressbarn stores in 47 states and 721 maurices stores in 44 states. For more information, please visit www.dressbarn.com and www.maurices.com.

Forward-Looking Statements

Certain statements made within this press release may constitute “forward-looking statements”, within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially. The Company does not undertake to publicly update or review its forward-looking statements even if experience or future changes make it clear that our projected results expressed or implied will not be achieved. Detailed information concerning a number of factors that could cause actual results to differ materially from the information contained herein is available in our most recent report on Form 10-K for the year ended July 26, 2008 and Form 10-Q for the quarter ended April 25, 2009.

Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings- Unaudited
Amounts in thousands, except per share amounts
		Thirteen Weeks Ended
		July 25,				July 26,
		2009				2008
Net sales		$398,928		100.0%		$382,303		100.0%
Cost of sales, including
occupancy and buying costs		237,994		59.7%		231,309		60.5%
Gross Profit		160,934		40.3%		150,994		39.5%
Selling, general and
administrative expenses		113,640		28.5%		101,854		26.6%
Depreciation and amortization		12,505		3.1%		12,474		3.3%
Operating income		34,789		8.7%		36,666		9.6%
Interest income		924		0.2%		1,826		0.5%
Interest expense		(1,175)		-0.3%		(1,192)		-0.3%
Other income (loss)		453		0.1%		(671)		-0.2%
Earnings before income taxes		34,991		8.8%		36,629		9.6%
Income taxes		8,570		2.1%		14,515		3.8%
Net earnings		$26,421		6.6%		$22,114		5.8%
Earnings per share:
Basic		$0.44				$0.37
Diluted		$0.41				$0.34
Weighted average shares outstanding:
Basic		60,047				60,175
Diluted		64,747				64,495

Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Statements of Earnings- Unaudited
Amounts in thousands, except per share amounts
		Fiscal Year Ended
		July 25,				July 26,
		2009				2008
Net sales		$1,494,236		100.0%		$1,444,165		100.0%
Cost of sales, including
occupancy and buying costs		918,350		61.5%		885,927		61.3%
Gross Profit		575,886		38.5%		558,238		38.7%
Selling, general and
administrative expenses		422,372		28.3%		397,424		27.5%
Depreciation and amortization		48,535		3.2%		48,200		3.3%
Operating income		104,979		7.0%		112,614		7.8%
Interest income		5,394		0.4%		7,817		0.5%
Interest expense		(4,795)		-0.3%		(4,825)		-0.3%
Other income		1,062		0.1%		512		0.0%
Earnings before income taxes		106,640		7.1%		116,118		8.0%
Income taxes		36,952		2.5%		42,030		2.9%
Net earnings		$69,688		4.7%		$74,088		5.1%
Earnings per share:
Basic		$1.16				$1.23
Diluted		$1.11				$1.15
Weighted average shares outstanding:
Basic		60,044				60,102
Diluted		62,990				64,467

Dress Barn, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets- Unaudited
Amounts in thousands
		July 25,		July 26,
ASSETS		2009		2008
Current Assets:
Cash and cash equivalents		$240,763		$127,226
Investment Securities		112,998		92,697
Merchandise inventories		193,979		186,983
Prepaid expenses and other		17,874		24,882
Total Current Assets		565,614		431,788
Property, Plant and Equipment		556,085		525,605
Less accumulated depreciation and amortization		278,172		251,326
Property, Plant and Equipment, net		277,913		274,279
Deferred Tax Asset		3,091		-
Intangible Assets, net		104,932		107,802
Goodwill		131,368		130,656
Investment Securities		30,813		58,404
Other Assets		18,090		21,530
TOTAL ASSETS		$1,131,821		$1,024,459
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable – trade		$138,940		$121,084
Accrued salaries, wages and related expenses		32,116		27,934
Other accrued expenses		49,450		50,970
Customer credits		13,999		14,822
Income taxes payable		7,491		-
Current portion of deferred tax		2,775		401
Current portion of long-term debt		1,347		1,277
Convertible senior notes		115,000		115,000
Total Current Liabilities		361,118		331,488
Long-Term Debt		26,062		27,263
Deferred Rent and Lease Incentives		67,772		62,003
Deferred Compensation and Other Long Term Liabilities		50,789		44,391
Deferred Tax Liability		-		3,232
Total Liabilities		505,741		468,377
Shareholders' Equity		626,080		556,082
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$1,131,821		$1,024,459