Dress Barn Inc reported a better-than-expected quarterly profit, helped by tighter cost and inventory controls, but forecast full-year 2010 earnings below market expectations, sending its shares down 3 percent in after-market trade.

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.

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

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, which operates the namesake chain for women and the Maurices chain for twentysomethings, 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 3 percent at $17.60 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)