Ann Inc reports 2.3 percent decline in Q2 comparable sales

REPORT_ For the fiscal second quarter of 2014, Ann reported earnings per diluted

share of 0.70 dollars, compared with earnings per diluted share of 0.76 dollars in the second quarter of 2013. Total net sales for the second quarter of fiscal 2014 were 648.7 million dollars, compared with net sales of 638.2 million dollars in the second quarter of fiscal 2013. Total company comparable sales for the quarter decreased 2.3 percent versus the second quarter of 2013.

Commenting on the results, Kay Krill, President and Chief Executive Officer, said, “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.

By brand, net sales across all channels of the Ann Taylor brand totaled 250 million dollars compared with net sales of 245.2 million dollars in the second quarter of 2013. At the Loft brand, net sales across all channels totaled 398.7 million dollars compared with net sales of 393 million dollars. At Ann Taylor, total brand comparable sales increased 0.7 percent, reflecting an increase of 2 percent at Ann Taylor, partially offset by a decline of 1.9 percent in the Ann Taylor Factory channel.

At Loft, total brand comparable sales decreased 4.1 percent, reflecting a decrease of 5.2 percent at Loft and an increase of 0.3 percent in the Loft Outlet channel. During the second quarter of fiscal 2014, the Company opened 17 stores, comprised of two Ann Taylor Factory stores, six Loft stores and nine Loft Outlet stores, and closed three Ann Taylor stores and six Loft stores. The total store count at the end of the fiscal second quarter was 1,040, comprised of 261 Ann Taylor stores, 113 Ann Taylor Factory stores, 544 Loft stores and 122 Loft Outlet stores.

Net sales for the first six months of fiscal 2014 were 1,239.3 million dollars, compared with net sales of 1,212.7 million dollars in the first half of fiscal 2013. By brand, net sales across all channels of the Ann Taylor brand were 469.9 million dollars compared with net sales of 464.4 million dollars. At the Loft brand, net sales across all channels were 769.4 million dollars in the first half of 2014, compared with net sales of 748.3 million dollars in the first half of 2013.

Total company comparable sales for the first half of 2014 decreased 2.1 percent. At Ann Taylor, total brand comparable sales decreased 0.7 percent, reflecting an increase of 1.1 percent at Ann Taylor offset by a decrease of 4.3 percent in the Ann Taylor Factory channel. At Loft, total brand comparable sales decreased 2.9 percent, reflecting a decrease of 3.6 percent at Loft, partially offset by an increase of 0.1 percent in the Loft Outlet channel.

For the fiscal third quarter of 2014, the company expects total net sales to be 670 million dollars, reflecting total company comparable sales that are flat to slightly negative. Gross margin rate performance is expected to be 54 percent. For fiscal 2014, the company expects total net sales to be 2.560 billion dollars, reflecting flat total company comparable sales. Gross margin rate performance is expected to be 52 percent.