Mar 14, 2014
Ann Taylor owner's profit beats estimates
Mar 14, 2014
Women's apparel retailer Ann Inc's fourth-quarter profit topped analysts' estimates as it managed its holiday season promotions better than its rivals.
The parent of the Ann Taylor and LOFT brands, however, forecast lower-than-expected current-quarter sales, indicating that consumer spending remains sluggish.
Apparel retailer Express Inc on Wednesday said it expected its profit to slide by more than half in the current quarter due to heavy discounting and a decline in store traffic.
Ann also said on Friday it would cut about 100 jobs, or 5 percent of its full-time employees.
The company's net income rose to $4.7 million, or 10 cents per share, in the fourth quarter ended February 1, from $2.4 million, or 5 cents per share, a year earlier.
Analysts on average had expected a profit of 7 cents per share, according to Thomson Reuters I/B/E/S.
Total net sales rose 2.6 percent to $623.3 million, slightly below the average analyst estimate of $623.8 million.
Total company comparable sales rose 2.9 percent. Trendy merchandise sold at the company's LOFT stores drew in shoppers during the quarter, resulting in a 5.7 percent rise in comparable store sales at the brand.
However, comparable sales at the Ann Taylor brand, which caters to a slightly older clientele, fell 1.1 percent, primarily due to weakness at its factory outlets.
The company said it expects first-quarter total net sales to approach $600.0 million. Analysts on average expect sales of $613.3 million.
Ann said it expects to record a pre-tax restructuring charge of about $15 million, a vast majority of which is expected to be incurred in the current quarter.
As of January 2012, Ann had about 19,900 employees, of which about 2,000 were full-time salaried employees.
Ann said the realignment is expected to result in ongoing annualized pre-tax operating savings of about $25 million, of which about $15 million is expected to be realized in 2014.
The company's shares closed at $34.87 on the New York Stock Exchange on Thursday.
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