Women's apparel retailer Ann, Inc. (ANN) reported Friday a higher first-quarter profit, as net sales grew 7 percent helped by continued strong momentum in LOFT brand. Earnings per share topped analysts' estimates, while sales were slightly below their view.
The parent company of Ann Taylor and LOFT also forecast second-quarter sales below estimates and reiterated sales outlook for the fiscal year.
Net sales for the quarter grew 7 percent to $560.41 million from $523.63 million in the year-ago quarter, but was slightly lower than analysts' estimate of $560.83 million.
Total comparable sales increased 3.8 percent from the preceding year. At Ann Taylor, total brand comparable sales decreased 6.9 percent, compared to an increase of 15.3 percent last year. At LOFT, total brand comparable sales increased 11.3 percent, in comparison with a 2.4 percent increase a year ago.
In the first quarter, the company's net income increased to $28.73 million or $0.58 per share from $27.31 million or $0.51 per share reported last year. On average, 14 analysts polled by Thomson Reuters expected earnings per share of $0.51 for the quarter. Analysts' estimates typically exclude one-time items.
Gross margin, as a percentage of net sales, was 56.6 percent, compared to 57.3 percent a year ago, reflecting a strong gross margin rate performance at Ann Taylor and a slightly lower gross margin rate at LOFT, the company said.
During the quarter, the company repurchased about 1.5 million shares at a cost of $35 million.
Looking ahead to the second quarter, the company expects total net sales of $585 million, reflecting a total company comparable sales increase in the mid-single digits. Twelve analysts anticipate sales of $593.25 million for the second quarter.
For fiscal 2012, the company still projects total net sales to be $2.375 billion, reflecting a total company comparable sales increase in the mid-single digits. Fifteen analysts expect sales of $2.38 billion for fiscal 2012.
During the first quarter, the company opened seven new stores, comprised of two Ann Taylor stores, four LOFT stores and one LOFT Outlet store. It closed eight Ann Taylor stores, four LOFT stores and one LOFT Outlet store in the quarter.
At the end of the quarter, ANN's total store count was 947, comprised of 274 Ann Taylor stores, 500 LOFT stores, 99 Ann Taylor Factory stores and 74 LOFT Outlet stores.
ANN is currently trading at $26.62, up $0.77 or 2.98 percent, on a volume of 562 thousand shares on the NYSE.
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