UPDATE: ANN Posts Better-Than-Expected Q2 Earnings, Lowers Sales Forecast
ANN (NYSE: ANN) reported upbeat profit for its fiscal second quarter.
The New York-based company posted a quarterly profit of $32.7 million, or $0.70 per share, versus a year-ago profit of $35.6 million, or $0.76 per share.
Its sales climbed to $648.7 million from $638.2 million. However, analysts were expecting earnings of $0.68 per share on sales of $648.09 million.
ANN's same-store sales declined 2.3% in the quarter. Same-store sales at Loft-brand stores fell 4.1%, while same-stores sales at Ann Taylor-brand stores rose 0.7%.
The company's gross margin rate narrowed to 52.4% from 54.7%, while selling, general and administrative expenses fell to $284.7 million from $289.3 million.
ANN repurchased around 1.3 million shares of its stock at a cost of $50 million during the quarter. During the quarter, it opened 17 stores, comprised of 2 Ann Taylor Factory stores, 6 LOFT stores and 9 LOFT Outlet stores, and closed 3 Ann Taylor stores and 6 LOFT stores.
ANN expects Q3 sales of $670 million, versus analysts' estimates of $674 million. It also expects FY15 revenue of $2.56 billion, versus its earlier forecast of $2.61 billion.
Kay Krill, President and Chief Executive Officer, commented, "Our results for the quarter were slightly better than the outlook we provided earlier this month. As previously reported, while the quarter had started on a positive note with solid momentum through mid-June, the second half of the period proved challenging, as softer traffic levels and a highly promotional environment pressured sales and margin. In addition, LOFT experienced continued softness in basic knit tops, which represented a significant component of its summer assortment.”
ANN shares gained 0.54% to close at $38.81 yesterday.
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