Women's apparel retailer Ann Taylor Stores Corp. (ANN) Tuesday said its fourth-quarter bottom-line performance will be substantially higher than the year-ago fourth quarter and will exceed expectations, helped by higher than expected sales and gross margin rate. The company's shares gained over 14% in the morning hours on the NYSE.
Ann Taylor now expects fourth-quarter total sales to approach $470 million, compared with its prior sales outlook of a slight decline from the $462.4 million reported in the third quarter of 2009.
On average, Thirteen analysts, polled by Thomson Reuters expect the company to report revenues of $453.38 million for the fourth quarter. Analysts estimates usually exclude special items.
Ann Taylor also sees approximately flat comparable store sales for the fourth quarter. By division, comparable store sales at Ann Taylor are now expected to be down approximately 7%, in comparison with its previous outlook for comparable store sales to be down in the low-to-mid teens.
Comparable store sales at LOFT are expected to grow approximately 2%, which reflects the upper end of the company's previously projected range.
Further, Ann Taylor stated that its fourth-quarter gross margin rate is expected to approach 52%, up from the company's previous outlook and the 35.7% gross margin rate reported in the fourth quarter of 2008.
In addition, selling, general and administrative expenses for the fourth quarter are projected to be in line with the company's earlier projection of approximately $245 million. In the year-ago fourth quarter, the company's selling, general and administrative expenses were $265 million.
Commenting on the outlook, Kay Krill, president and chief executive officer of Ann Taylor Stores, said, "Our fourth quarter performance exceeded our earlier expectations, and I am especially pleased that much of the upside was a result of improved product assortments at both brands. Overall, our top-line improvement and healthy gross margin performance also reflected the success of our planned promotional strategy and the benefit of our clean inventory position."
Going forward, Ann Taylor said it is entering the Spring 2010 season with positive sales momentum at both brands driven by compelling merchandise and inventory that is positioned to support comparable store sales growth.
ANN is trading at $15.29, up $1.90, on a volume of 5.09 million shares.
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