Ann Posts Upbeat Q1 Profit, But Sales Miss Views

reported better-than-expected earnings for the first quarter on Friday, but the company's sales missed analysts' expectations. The New York-based company posted quarterly net income of $13.6 million, or $0.29 per share, compared to $5.2 million, or $0.11 per share, in the year-ago quarter. Excluding charges, the company's adjusted earnings came in at $0.37 per share. Its sales climbed to $597.7 million from $590.6 million. However, analysts were expecting a profit of $0.33 per share on revenue of $604.87 million. The average estimate among 3 Estimize users was for earnings of $0.13 per share and revenue of $613.18 million. Net sales across all channels of the Ann Taylor brand for the first quarter slipped to $211.3 million from $219.9 million, while net sales at the LOFT brand climbed to $386.4 million from $370.6 million. Its total comparable sales slipped 1.5 percent for the quarter. At Ann Taylor, total brand comparable sales dropped 3.0 percent, while At total brand comparable sales at LOFT declined 0.6 percent. Gross margin, as a percentage of net sales, shrank to 52.3 percent in the latest quarter, from 53.4 percent in the first quarter of 2014. Selling, general and administrative expenses dropped to $283.7 million, from $288.7 million. Ann ended the quarter with around $176 million in cash. At the end of the quarter, total inventory per square foot rose 3 percent year-over-year. At the end of the fiscal first quarter, total store count was 1,034. Kay Krill, President and Chief Executive Officer, said, "ANN INC. delivered bottom-line results for the quarter that exceeded our expectations. We were able to achieve these results, despite softer-than-anticipated gross margin performance, through continued effective management of expenses." For the second quarter, Ann projects sales of $660 million, versus analysts' estimates of $659.13 million. The company expects FY15 sales of $2.56 billion, versus analysts' expectations of $2.58 billion. Ann shares rose 0.43 percent to close at $47.03 yesterday.