Ann Inc. Sinks On Q3 Warning; Lower Q4 Outlook

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Ann Inc.
ANN
warned that third-quarter results fell below expectations and offered an outlook for the current period below Wall Street views. The New York-based women's apparel retailer fell more than 4 percent recently, changing hands at $35.10 a share. Chief Executive Kay L. Krill said lower mall traffic and a "highly promotional retail environment" hurt sales. Shipment delays related to labor difficulties at West Coast ports as well as weak sales in "certain categories" also hurt results, Krill said. Same-store saes fell 6.6 percent in the third quarter at Ann Taylor outlets and nearly 3 percent at the company's Loft stores. The company forecast fourth-quarter sales of $630 million, compared with analysts' expectation of $642 million. Fourth-quarter gross margin will narrow to 46.5 percent, from 52.6 percent in the third quarter. Krill said fourth-quarter results will be hurt by holiday discounts and higher air freight costs related to West Coast port labor uncertainty. The company last month signed a confidentiality agreement with the private-equity firm Golden Gate Capital Corp. "Given Golden Gate's expertise in specialty retail, it would be beneficial to continue discussions on a more detailed basis," Ann Taylor said in October. Activist investors in recent months have pushed the company to consider a sale.
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Posted In: EarningsNewsGuidanceIntraday Update
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