Why 1 UBS Analyst Is Boosting Her Ann Target By 17%
Ann Inc (NYSE: ANN) extended its gains Monday after posting better-than-expected fourth-quarter results along with plans for future cost cutting.
The New York-based women's apparel retailer changed hands recently at $41.30, up $0.85. The shares are up about 13 percent since results were posted on Friday.
On Monday, UBS' Roxanne Meyer raised her target 17 percent to $41, maintaining a Neutral rating.
"The real news is the supply chain initiative," Meyer said.
Ann said Friday the initiative will result in $50 million in annual benefits to gross margin between now and 2017.
The company also announced separate savings of $35 million by 2017 from an ongoing "optimization" of its sales, general and administrative costs. The estimate includes $20 million in savings included in its 2015 outlook.
Meyer boosted her 2016 earnings estimate by 6 percent to $2.62 a share, citing the cost cuts and supply chain initiative. The analyst, however, shaved two cents from 2015 estimate to $2.04 a share.
The company, which launched a review of its supply chain management four months ago, said the initiative will focus on improved production speed and flexibility, along with reducing overall cost of goods sold.
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