This summary is based on the fourth quarter fiscal 2008 earnings call conducted by The Dress Barn, Inc. (DBRN) on September 17, 2008.

Management:

President, Chief Executive Officer: David R. Jaffe
Senior Vice President, Chief Financial Officer: Armand Correia
Chief Merchandising Officer of Dress Barn: Keith Fulsher
Chief Merchandising Officer of Maurice''s: Lisa Rhodes

Key Investors Issues

- EPS were 34 cents per share compared to 48 cents per share last year.
- Net earnings were $22.1 million compared to $33.6 million for the same period a year ago.
- Net sales increased 1% to $382.3 million versus a year-ago quarter.

Fourth Quarter Highlights

Net earnings were $22.1 million, or 34 cents per share compared to net earnings of $33.6 million, or 48 cents per share for the same period a year ago.

- Net sales increased 1% to $382.3 million versus a year-ago quarter. The increase reflected the overall growth from new stores but offset by a comparable store sales decline of 2%. Sales results were mixed by division.
- Dress Barn''s stores quarterly sales decreased 5% versus last year to $238.5 million, reflecting a comparable store sales decrease of 5%. By region, the northeast had the better performance, while the west coast had the weaker performance.

- Sales transactions decreased 4% to last year while average dollar sales remained flat at $63.59, with units per transaction also flat to last year at three.
- Maurice''s sales increased 12% versus last year to $143.8 million. The increase was primarily driven by new store growth, along with a comparable store sales increase of 4%. All regions posted an increase in comparable store sales, with the Midwest region the stronger performer.
- Key sales components for the Maurice''s stores were all positive compared to last year and more than offset a traffic decline of 4.5%.
- Average dollar sales increased 6.5% to $46.31, which included a 6.5% increase in average unit price to $16.64, with units per transaction flat at 2.8.

Gross profit came in at 39.5%, declined 360 basis points compared to last year.

250 basis points were from merchandise margin and 110 basis points on buying and occupancy costs from comparable store sales deleverage. Within the merchandise margin, increased markdowns accounted for 220 basis points of the 250 point merchandise margin decrease.
- By division, gross profit for Dress Barn stores was 38.1%, a decline of 510 basis points to last year. 320 basis points from merchandise margin, primarily due to higher markdowns, and 190 basis points from buying and occupancy cost deleveraging.
- Gross profit for the Maurice''s stores was 41.8%, a decline of 120 basis points to last year, with the breakdown being 90 basis points on merchandise margin, again primarily from higher markdowns, and 30 basis points from buying and occupancy costs, primarily from new stores’ increased occupancy costs.

- SG&A was $101.9 million, 2% above last year, despite a 5% increase in the net number of stores. SG&A as a percent of sales came in at 26.6%, an increase of 20 basis points versus last year’s 26.4%, and reflected good expense control given the deleverage from the decrease in comparable store sales.
- Operating income was $36.7 million, or 9.6% of sales. This compares to operating income of $51.9 million, or 13.6% of sales last year. Operating income as a percent of sales for Dress Barn stores was 8.2% compared to 14.2% last year. The decrease of 600 basis points to last year was primarily to sales and gross profit related.
- Maurice''s stores operating income came in at 12% of sales compared to 12.7% last year. The decrease of 70 basis points to last year was primarily in gross profit from the higher markdowns.

- Effective tax rate was 39.6% compared to 37.4% last year.
- Weighted average shares outstanding of 64.5 million shares declined 8% from last year’s 70 million shares outstanding. This year’s decrease of 5.5 million shares was due to a decrease of 2.7 million shares less from the convergence feature, about 2.5% convertible senior notes, along with a decrease of 2.2 million resulting from share buy-back during the early part of the year and a decrease of approximately 600,000 shares in share-based compensation.
- Although Dress Barn stores comparable store sales decreased 5% for fourth quarter, there were marked differences in monthly results. May was difficult but June and July showed improvement. This improvement in the sales trend was due to the strong performance of wear now transitional and fall product. The traditional summer categories such as shorts and tees under-performed and required additional markdowns to move out the merchandise.

Fiscal 2008 Highlights

- Net sales were $1.444 billion versus $1.427 billion for fiscal 2007. Comparable store sales declined 3%, with Dress Barn stores decreasing 7% and Maurice''s increasing 4%.
- Operating income as a percent of sales decreased 310 basis points to 7.8%, compared to 10.9% last year. By division, Dress Barn stores decreased 530 basis points for the year to 4.8% compared to 10.1% last year, while Maurice''s stores increased 30 basis points to 12.6% compared to 12.3% last year.
- Net earnings were $74.1 million, or $1.15 per share. This compares to $101.2 million or $1.45 per share for fiscal 2007. Fiscal 2008’s earnings per share compared to the company’s previous earnings per share guidance of $1.05 to $1.10.
- The company ended the year with cash and marketable securities of $278 million compared to $245 million the prior year. This year’s total includes approximately $58 million of auction rate securities that are classified as long-term investments. These investments reflect a temporary mark-to-market adjustment of approximately $4 million.

- Total inventories at cost ending fiscal year was $187 million, down 5%, or a decrease of 10% on a per square footage basis versus the prior year. By division, Dress Barn stores total inventory ending fiscal year were $117.9 million at cost, down 10% or a decrease of 11% on a per square footage basis versus the year ago, while average store inventory levels ending the year were down 10%.
- Maurice''s stores total inventory ending fiscal year was $69.1 million at cost, an increase of 3.5%. However, on a per square footage basis, inventory decreased 7% versus last year with average store inventory levels down 7%, with overall freshness very comparable to the prior year.
- Capital expenditures came in at $61.4 million. This is less than the $70 million previously estimated and is due to some carryover to 2009 IT projects.
- Dress Barn opened 38 stores and closed 33 throughout the year for a net square footage increase of 2%.
- Maurice''s opened 72 stores and closed two, for net square footage increase of 12%.

Fiscal 2009 Outlook

- The company anticipates opening 35 to 40 stores and closing 20 to 25 for net square footage increase of 2%.
- The company is planning on 55 openings and 10 closings, a 9% net square footage growth.
- Balance sheet will continue to be strengthened by a projected $75 million of free cash flow this year.
- The company is projecting EPS in the $1.23 to $1.28 range, based on low-single-digit comparable store sales increases at both divisions for the balance of the year.

Key questions from the fourth quarter earnings call conducted by The Dress Barn, Inc. on September 17, 2008.

Gary Giblen (Goldsmith & Harris): How promotional the holiday season will be?