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

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