all women. all girls. ANNUAL REPORT 2017 2 We provide all women and girls with fashion and inspiration for living This is our core purpose, the reason we exist and the impact we seek to make in the world. Across all brands at ascena, we have a rich history of supporting our communities and a genuine passion for making a difference in the lives of women and girls. 3 FISCAL 2017: A YEAR OF TRANSFORMATION The retail industry continues to change. Mall traffic is and gross margin. We are implementing new merchandise down and consumer spending patterns are shifting, with planning systems, including advanced demand planning an increasing focus on experiences over things. We have and markdown optimization. These tools will allow us to seen continuing fragmentation of industry demand and improve full ticket sell-through and offer our customers an expanding influence of casual lifestyles in America— improved experience by having the right inventory in the dynamics that have resulted in more players chasing a right store. shrinking pool of demand. All of this has led to a seismic shift in our competitive space. We are also implementing new customer experience management tools, which allow us to better understand In order to be successful in this environment, we can’t run the behaviors and preferences of individual customers, our business the same way we always have. The needs enabling us to tailor communications with them on a one- and wants of our customers have changed, and it’s critical to-one basis. These capabilities will allow our brand teams we reinvent ourselves to better serve our customers and to engage the customer more effectively, and maximize the create a sustainable business model for the future. return on our inventory investment. Despite the progress with our transformation, we were disappointed with our financial performance in fiscal year Retail has transformed, 2017. For the full year, comparable sales were down 5%, reflecting the overall decline in consumer traffic. Full-year and so must we results fell well below our expectations, reflecting the operating leverage on our business and highlighting the importance of our transformation to a lower fixed-cost Over the past year, through our Change for Growth operating model. transformation initiative, we’ve been working aggressively to make ascena—and our collective of brands—better, We anticipate the competitive environment will remain faster and more cost-efficient. challenging in fiscal year 2018. Going forward, we will continue our relentless focus on efficiencies and cost We’ve laid the foundation for a leaner and more sustainable savings, while pushing aggressively to reinvigorate top- operating model. This includes the consolidation of line growth. We believe we have meaningful growth leadership positions; the creation of smaller, more agile opportunities at each of our brands, and we are exploring functional teams at our brands; and the formation of new business opportunities that leverage our strong brand Centers of Excellence, which leverage ascena’s scale and portfolio and brand services platform capabilities. expertise to deliver increased capabilities to our brands in areas such as real estate, procurement and advanced We continue to believe ascena is well positioned for analytics. the future, with a portfolio of iconic brands, a talented leadership team, and leading platform capabilities we As part of our Change for Growth initiative, we have intend to leverage to deliver an exceptional omni-channel achieved fiscal run rate savings of $155 million through experience for our customers. a combination of operating model changes, rent and occupancy savings, and reductions in our level of non- merchandise spend. We are well on our way to our committed target of $250 to $300 million, and we will Focusing our continue to look for additional opportunities to become a more agile, efficient company. collective energy on While taking out costs, we are making targeted investments Efficiency + Growth in leading capabilities designed to drive both our top line 4 FY17 SUMMARY* $ $ 6.65 BILLION 4,800 STORES TOTAL REVENUE ACROSS 8 BRANDS 64,000 ASSOCIATES 95% ARE WOMEN *For more information, see 2017 Financial Highlights on pages 8-9 We remain guided by our core purpose, which is the Change is never easy, and we’ve asked a lot of our team enduring reason we exist and the impact we seek to make members this year. We appreciate the commitment they in the world: We provide all women and girls with make every day to our customers, our business, and each fashion and inspiration for living confidently other. every day. Our core purpose is in the DNA of our brands, nearly all of which were family-owned and founded With the collective strength of our 64,000 associates by visionaries with a passion to meet the unmet needs of working together, we will continue to transform ascena their customers. Many of these early entrepreneurs were into a lean, agile competitor that is capable of delivering women, including Roslyn Jaffe, a mother of three who sustainable shareholder value. founded the first dressbarn store in Stamford, Connecticut in 1962. Today, we are proud to reflect and serve the full diversity and evolving expectations of our customers—ALL women and girls, across generations, ethnicities and lifestyles. We thank our stockholders and partners for their continued support. We are deeply grateful to our team David Jaffe of passionate and dedicated associates who have been Chairman & Chief Executive Officer working tirelessly to support our transformation efforts. ascena retail group, inc. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This 2017 Annual Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and are indicated by words or phrases such as “anticipate, “estimate,” “expect,” “project,” “plan,” “we believe,” “will,” “would,” “guidance,” and similar words or phrases, and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed in or implied by such forward-looking statements. publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 5 BRAND SERVICES 6 OUR VISION We are a collective brands that dominate in their niche and are loved 7 2017 Financial Highlights (DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS) OPERATING RESULTS 2017 2016 2015 Net Sales $6,649.8 $6,995.4 $4,802.9 Operating (Loss) Income (1,313.8) 93.8 (234.9) Net Loss (1,067.3) (11.9) (236.8) Net Loss per Common Share - Diluted $(5.48) $(0.06) $(1.46) Adjusted EBITDA (A) 528.6 644.6 374.1 Adjusted Net Income (A) 42.2 118.5 98.1 Adjusted Net Income per Common Share - Diluted (A) $0.22 $0.60 $0.59 FINANCIAL POSITION 2017 2016 2015 Cash and Cash Equivalents $325.6 $371.8 $240.6 Working Capital 185.2 226.3 232.2 To t a l A s s e t s 3,871.5 5,506.3 2,906.2 To t a l D e b t 1,538.1 1,648.5 106.5 To t a l E q u i t y $821.0 $1,863.3 $1,518.1 Number of Stores at End of Fiscal Period 4,807 4,906 3,895 Total Gross Square Footage (in Millions) 26.4 26.9 21.2 (A) Excludes certain expenses which Management believes are not indicative of the Company’s underlying operating performance. Refer to our Current Report on Form 8-K dated September 25, 2017 and Current Report on Form 8-K dated September 19, 2016 for a full reconciliation and discussion of these non-GAAP financial measures to the closest comparable GAAP measures. 8 NET SALES ADJUSTED EBITDA (A) DOLLARS IN MILLIONS DOLLARS IN MILLIONS $644.6 $6,995.4 $6,649.8 $528.6 $4,802.9 $374.1 17 16 15 17 16 15 ADJUSTED NET INCOME (A) ADJUSTED EARNING PER SHARE (A) DOLLARS IN MILLIONS DILUTED $118.5 $0.60 $0.59 $98.1 $42.2 $0.22 17 16 15 17 16 15 (A) Excludes certain expenses which Management believes are not indicative of the Company’s underlying operating performance. Refer to our Current Report on Form 8-K dated September 25, 2017 and Current Report on Form 8-K dated September 19, 2016 for a full reconciliation and discussion of these non-GAAP financial measures to the closest comparable GAAP measures. 9 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended July 29, 2017 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-11736 ASCENA RETAIL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 30-0641353 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 933 MacArthur Boulevard, Mahwah, New Jersey 07430 (Address of principal executive offices) (Zip Code) (551) 777-6700 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock, $0.01 par value The NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.