UPDATE 2-Dress Barn Q4 profit tops St, sees FY below estimates

* Q4 adj EPS $0.39 vs est $0.37

* Q4 rev $398.9 mln vs est $400.7 mln

* Sees 2010 EPS $1.10-$1.20 (Adds conference call details)

Sept 16 (Reuters) - Dress Barn Inc (DBRN.O: Quote, Profile, Research) reported a better-than-expected quarterly profit, helped by tighter cost and inventory controls, but forecast full-year 2010 earnings below market expectations.

The women's clothing retailer sees 2010 earnings of $1.10 to $1.20 a share, while analysts on average were expecting the company to earn $1.23 a share, according to Reuters Estimates.

On a conference call with analysts, a company executive said a 2 percent rise in sales at stores open at least a year, will be the tipping point for its earnings outlook and sees a significant upside to earnings if comparable sales exceed this figure.

The company has recorded positive same-store sales in the low single digits at both its Dress Barn and Maurices divisions quarter to date, the executive said.

"Our fall business is off to a good start. We are encouraged by the early results of our annual sweater sales, which sets the tone for the fall season, as sweaters is our larger category going forward," he added.

The company also expects to generate about $157 million cash-flow from operations, out of which it expects to use $50 million for capital expenditure.

In June, the company had said it will buy teen-apparel seller Tween Brands Inc (TWB.N: Quote, Profile, Research) to capture a larger share of the girls' apparel market. Dress Barn said it will update its outlook after closing the Tween Brands merger.

The company said it has a new $200 million credit facility in place, at the close of the merger.

Q4 PROFIT TOPS STREET

For the fourth quarter ended July 25, Dress Barn's profit rose to $26.4 million, or 41 cents a share, from $22.1 million, or 34 cents a share, a year ago.

Excluding items, it earned 39 cents per share, against Wall Street estimate of 37 cents a share.

Net sales for the company rose 4 percent to $398.9 million.

Analysts were expecting revenue of $400.7 million.

Like many other apparel retailers across the board, Dress Barn has reduced inventories and kept a tab on expenses to protect margins amid the difficult retail climate.

Shares of the Suffern, New York-based company, which have gained more than half their value over the past six months, were down 11 cents at $18.08 after the bell. They closed at $18.19 Wednesday on the New York Stock Exchange. (Reporting by Viraj Nair in Bangalore; Editing by Pradeep Kurup)