Ann Inc. on Friday reported a weaker-than-expected 1.2% increase
in sales in its first quarter as the retailer continues to struggle
with weak traffic and competition.
Profit, excluding special items, topped Wall Street expectations
amid expense management.
The results come just days after Ann agreed to sell itself to
Lane Bryant parent Ascena Retail Group Inc. The $2.2 billion deal
with Ascena will combine two recognizable women's apparel companies
with brands like dressbarn and Ann Taylor.
Like many retailers, Ann has been struggling with a weak retail
environment characterized by heavy discounting and tough
competition.
Ann Chief Executive Kay Krill said Friday that the company's
February results were weak, but both Ann Taylor and Loft brands
posted improved sales in March and April as customers responded
well to its spring assortments.
Overall for the period ended May 2, Ann's same-store sales fell
1.5%, as Ann Taylor brand sales fell 3% and Loft brand sales were
down 0.6%.
Gross margin narrowed to 52.3% from 53.4% as Ann continued to
struggle with soft traffic. The company ramped up promotions to
clear out inventory.
Overall, the company reported a profit of $13.6 million, or 29
cents a share, up from $5.2 million, or 11 cents a share, a year
ago.
Excluding restructuring charges, per-share earnings were 37
cents. Analysts polled by Thomson Reuters had forecast 32 cents a
share in earnings.
Sales edged up to $597.7 million from $590.6 million. Ann had
forecast $605 million in sales for the quarter.
For the current quarter, the company predicted sales of $660
million, while analysts had forecast $659 million in revenue.
For the year, the company now expects its sales to come in at
$2.56 billion, down a hair from the $2.57 billion it had forecast
in March.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Access Investor Kit for ANN, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0356231078
Access Investor Kit for Ascena Retail Group, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US04351G1013
Subscribe to WSJ: http://online.wsj.com?mod=djnwires