Ads
By
Reuters
Published
May 20, 2012
Reading time
2 minutes
Download
Download the article
Print
Text size

Ann Taylor parent's profit beats on fewer promotions

By
Reuters
Published
May 20, 2012

Women's clothing retailer Ann Inc reported a quarterly profit that beat estimates for the seventh time in a row, as fewer promotions helped lift margins at its Ann Taylor stores.


Kate Hudson for Ann Taylor / Photo: Ann Taylor


However, the company forecast second-quarter sales of $585.0 million, below analysts expectations of $593.3 million, according to Thomson Reuters I/B/E/S.

The company's Ann Taylor brand targets more affluent and older shoppers, while its LOFT stores, which have been growing in popularity, offer more affordable clothes for younger women.

"We reduced promotional activity (at Ann Taylor) ... (this) resulted in a higher gross margin rate and lower comparable sales versus the first quarter of 2011," Ann's CEO Kay Krill said in a statement.

The company had been offering steep discounts at its Ann Taylor stores for the past few quarters to attract shoppers, squeezing its margins.

Ann said gross margins were strong at its Ann Taylor outlets but were slightly lower at its LOFT stores. Overall, gross margins fell to 56.6 percent from 57.3 percent last year.

Rival Chico's FAS Inc also reported a higher-than-expected quarterly profit earlier this week, as new styles and designs allowed it to sell more of its merchandise at full price and cut back on promotions.

Ann's first-quarter net income increased to $28.7 million, or 58 cents per share, compared with $27.3 million, or 51 cents per share, last year.

Revenue rose 7 percent to $560.4 million. Comparable-store sales rose 4 percent.

Analysts on average had expected earnings of 51 cents per share on revenue of $560.8 million.

Ann's shares, which have risen about 7 percent this year, closed at $25.85 on Thursday on the New York Stock Exchange.

© Thomson Reuters 2024 All rights reserved.