Dive Brief:

• Apparel retail company Ascena Group, which runs Ann Taylor, Maurices, Dress Barn, Lane Bryant and other specialty chains, late Thursday reported first quarter 2017 same-store sales declines of 5%, missing Retail Metrics analyst expectations for a 4% decrease.

• "While we believe the extraordinary election cycle and warmer weather contributed to lackluster consumer activity, ultimately we were disappointed with our sales performance," Ascena CEO David Jaffe said on the company's earnings call, according to a Seeking Alpha transcript.

• Ascena posted Q1 net income of $14 million, or 7 cents per diluted share, up from a net loss of $18 million last year, or 10 cents per diluted share, the company said. Earnings missed by 2 cents, according to Retail Metrics, while operating income plunged 47% from the same period last year.

Dive Insight:

Once again, Ascena’s brands are being buffeted from outside forces: In the first quarter they took a hit from election anxiety, according to Jaffe, while earlier this year the company blamed unseasonable weather for muted sales and traffic.

Ascena ended the first quarter of its fiscal 2017 with inventory of $808 million, down 9% from $889 million at the end of the first quarter of fiscal 2016. The inventory balance included some $23 million of unamortized inventory step-up related to last year’s $2.16 billion Ann Inc. acquisition, which includes the Ann Taylor and Loft brands. On a conference call Thursday, Jaffe told analysts that the company will work to ensure that promotions are well-targeted in order to protect margins, inventory control, and cost and expenditure reductions.

For Ascena's fiscal second quarter, which includes the all-important holiday season, Jaffe said that while it’s too early to predict results, sales have already picked up since Election Day, which ended a period of difficulty for many of the company’s brands, adding that e-commerce is helping offset declining store traffic.

“Total comp sales were up 2% for the nine day period from the Sunday preceding Thanksgiving through Cyber Monday,” he said. “Importantly, total merchandise margin dollars were up 2% as well reflecting effective promotional strategies of our brand. Double-digit e-commerce growth over this period more than offset negative brick-and-mortar performance that resulted from continued traffic headwind.”

Despite those difficulties, Cowen & Co. analyst Oliver Chen sees hope. "We like [Ascena’s] inventory cleanliness on markdown actions, working capital focus, and comps outpacing bad traffic declines on higher customer spend,” he said in a note Friday, according to StreetInsider. “But [Ascena’s] banners all negative comped for a variety of reasons: not enough wear now at [tween apparel retailer] Justice, lack of a strong new view at Ann Taylor, and assortment planning issues at Dress Barn."