Women's apparel retailer Ann, Inc. (ANN) Friday reported an increase in fourth-quarter profit, reflecting sales growth, improved margins and lower income tax provision. The company also forecast first quarter and fiscal 2013 sales above analysts' expectations. In the pre-market trading, the shares rose about 8 percent.
Looking ahead, the company said it is well-positioned to build on its progress and further grow Ann Taylor and LOFT brands.
Kay Krill, president and CEO of the company said, "For the fourth quarter, as previously reported, the results reflected the negative impact of Superstorm Sandy and disappointing performance at LOFT due to an investment in bright colors that did not resonate with our client during the Holiday season."
Meanwhile, Ann Taylor brand delivered higher sales and profitability in the quarter.
Gross margin, as a percentage of net sales, increased 20 basis points to 49.1 percent, mainly due to lower promotional activity at Ann Taylor, partially offset by a higher level of promotional activity at LOFT.
Income tax provision was $245 thousand, lower than $852 thousand in the preceding year.
In the fourth quarter, the company's net income increased to $2.37 million or $0.05 per share from $2.18 million or $0.04 per share reported last year.
On average, 13 analysts polled by Thomson Reuters expected the company to earn $0.01 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly net sales grew to $607.68 million from $566.66 million prior year. Analysts expected revenue of $617.82 million for the quarter. Total company comparable sales decreased 0.7 percent from last year.
Net sales across all channels of the Ann Taylor brand increased to $255 million from $237.4 million a year ago. Total brand comparable sales increased 1.4 percent.
LOFT brand net sales were $352.7 million, lower than $329.3 million in the prior-year quarter. Total brand comparable sales decreased 2.1 percent.
Looking ahead to the first quarter, the company expects total net sales to be $600 million, reflecting a total comparable sales increase in the low-single digits. Gross margin rate performance is expected to be 56.5 percent. Analysts expect the company to report first-quarter sales of $593.31 million.
For fiscal 2013, the firm anticipates total net sales to be $2.565 billion, reflecting a total comparable sales increase in the mid-single digits. Gross margin rate performance is expected to be 55 percent. Gross margin, as a percentage of net sales, in 2012 was 54.8 percent.
Analysts are looking for sales of $2.51 billion for the full year.
During the fourth quarter, the company opened 14 new stores, comprised of two Ann Taylor stores, seven LOFT stores, one Ann Taylor Factory store and four LOFT Outlet stores.
Total store count at the end of the fiscal year was 984, comprised of 275 Ann Taylor stores, 101 Ann Taylor Factory stores, 512 LOFT stores, and 96 LOFT Outlet stores.
Separately, Ann announced the launch of international shipping on its e-commerce sites, anntaylor.com and loft.com.
ANN closed Thursday's regular trading at $29 on the NYSE. In the pre-market activity, the shares are up 7.76 percent.
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