Ann updates Q3 and full year outlook

REPORT_ Ann Inc today updated its outlook for the fiscal third quarter and full year 2014, and provided its outlook for the fiscal fourth quarter of 2014. Based on preliminary results, the update to the third quarter 2014 outlook provided on August 22, 2014 reflects lower-than-anticipated sales and gross margin rate performance. Total company net sales for the fiscal third quarter of 2014 are now expected to be 647 million dollars, reflecting a comparable sales decline of 4.3 percent.

Kay Krill, President and Chief Executive Officer, said, "Our results for the third quarter at both the Ann Taylor and Loft brands fell short of our expectations, reflecting lower mall traffic and a highly promotional retail environment. In addition, sales during the first half of the quarter were negatively impacted by product shipment delays related to labor uncertainty at the West Coast ports, which were mitigated by the use of air freight later in the quarter. Further to these external pressures, Ann Taylor also experienced soft product performance in select categories, resulting in its first negative comparable sales performance in the last ten quarters.”

At the Ann Taylor brand, total comparable sales decreased 6.6 percent, reflecting decreases of 4.8 percent at Ann Taylor and 10.4 percent in the Ann Taylor Factory channel. At the Loft brand, total comparable sales declined 2.9 percent, reflecting decreases of 3.3 percent at Loft and 1 percent in the Loft outlet channel. Gross margin rate for the company is expected to be 52.6 percent.

For the fiscal fourth quarter of 2014, company expects total company net sales for to be 630 million dollars, reflecting a comparable sales decline in the low-single digits. Gross margin rate for the company is expected to be 46.5 percent.

For the full year 2014, total net sales are expected to be 2.516 billion dollars, reflecting a total company comparable sales decline in the low-single digits. Gross margin rate performance is expected to be 51.2 percent. The company expects to have approximately 1,030 stores at fiscal year-end.