Ann Q3 Disappoints On Sales

Ann Inc ANN reported results Friday for the fiscal third quarter, ended November 1, 2014. Total net sales for the third quarter of fiscal 2014 were $646.8 million, below estimates of $648.27 and down from the $657.5 million reported in the third quarter of fiscal 2013.

Earnings per diluted share were $0.65 on a GAAP basis, or $0.72 per diluted share excluding the impact of a charge associated with the closure of Ann Taylor's Madison Avenue store of approximately $0.07 per diluted share. Analysts expected EPS of $0.68 and $0.89 was reported in the third quarter of 2013.

Total Company comparable sales for the quarter decreased 4.3 percent, compared to an increase of 3.7 percent in the third quarter of 2013. At Ann Taylor, total brand comparable sales decreased 6.6 percent, reflecting a decrease of 4.8 percent at Ann Taylor, which includes sales results at both Ann Taylor stores and anntaylor.com, and a decline of 10.4 percent in the Ann Taylor Factory channel. At LOFT, total brand comparable sales decreased 2.9 percent, reflecting decreases of 3.3 percent at LOFT, which includes sales results at LOFT stores and LOFT.com, and 1.0 percent in the LOFT Outlet channel.

Kay Krill, President and Chief Executive Officer, said, "Our results for the third quarter were slightly ahead of the outlook we provided earlier this month. As previously noted, our performance reflected weak traffic across the industry, a highly promotional retail environment and the impact of labor uncertainty at the West Coast ports, which resulted in product shipment delays in the first half of the quarter and higher air freight expense later in the period.  In addition, Ann Taylor experienced soft product performance in select categories, resulting in its first negative comparable sales performance in the last ten quarters.”

Total Company net sales for the fiscal fourth quarter of 2014 are expected to be $630 million, reflecting a comparable sales decline in the low-single digits and below estimates of $642 million.

Ann closed at $38.34 Thursday, up 2.95 percent.