Ann expects 3 percent rise in 2012 net sales

Ann, the parent Company of Ann Taylor and Loft, two women’s

specialty retail fashion brands in North America announced that it expects to report record earnings per share for the full year of fiscal 2012, notwithstanding lower-than-anticipated results for the fourth quarter. In its preliminary results for the year fiscal 2012 outlook it provided on November 28, 2012, the company expected total net sales for fiscal 2012 to be 2.376 billion dollars, reflecting a total Company comparable sales increase of three percent.

Gross margin rate performance is expected to be approximately 54.8 percent. Total SG&A expenses are expected to be approximately 1.136 billion dollars. The Company's effective annual tax rate is expected to be approximately 39.5 percent. During fiscal 2012, the Company repurchased 4.9 million shares at a total cost of approximately 135 million dollars, resulting in an expected total weighted average diluted share count of approximately 49 million for the full year. Capital expenditures are expected to approach 155 million dollars.

Commenting on the results, Kay Krill, President and Chief Executive Officer, said, “We are pleased that we will be reporting very strong year-over-year results for fiscal 2012. For the full year, we expect to report record earnings per share and double-digit growth in net income. We will also report strong sales and increased operating profit, as well as strong double-digit growth in e-commerce for the year, all of which reflect the benefit of our strategic growth initiatives.”
“In terms of the fourth quarter, the drivers of the softer-than-expected results were twofold: First, Ann has a high concentration of sales in the Northeast region, which were negatively impacted by the lingering effects of Hurricane Sandy. In addition, Loft's fourth-quarter investment in bright colours did not resonate with our clients this holiday season. As a result, promotions at Loft ramped up in the back half of the quarter, which pressured margins but effectively cleared through holiday inventories in order to enter the spring season in a healthy position,” Krill added.
“At Ann Taylor, we were pleased that the brand continued to make meaningful progress, achieving higher sales and gross margin for the quarter, compared with the fourth quarter of 2011. In addition, the factory outlet channel was successful in delivering profitable growth despite soft traffic and comparable sales. Looking ahead, we have entered the first quarter with clean inventories at both brands, and we are well positioned to deliver profitable growth in fiscal 2013,” she further stated.

In the fiscal fourth quarter 2012 total Company net sales for the fiscal fourth quarter of 2012 are now expected to be 608 million dollars, reflecting a comparable sales decline of 1 percent. At the Ann Taylor brand, total comparable sales increased 1percent, reflecting a comparable sales increase of 5percent at Ann Taylor, partially offset by a decline of 7percent in the Ann Taylor Factory channel. At the Loft brand, total comparable sales decreased 2percent, reflecting declines of 1percent at Loft and 7percent in the Loft outlet channel. Gross margin rate for the Company is expected to be 49.0percent, an increase of 10 basis points versus the fourth quarter of 2011, but below its initial expectations. This performance reflected a higher-than-anticipated promotional cadence in December and January.