ANN Inc. (ANN) announced that it cut its first-quarter sales outlook citing weaker-than-anticipated performance.
Looking ahead for the first-quarter, the company now expects net sales to be $575 million. The company said comparable sales decreased 0.5% compared with the first quarter of 2012. Analysts polled by Thomson Reuters expect the company to report revenues of $598.40 million for the first-quarter. Analysts' estimates typically exclude special items
Earlier the company expected total net sales for the first-quarter to be $600 million, reflecting a total comparable sales increase in the low-single digits.
At Ann Taylor, total brand comparable sales for the quarter increased 1.9%, reflecting an increase of 6.2% at Ann Taylor, partially offset by a decrease of 5.8% in the Ann Taylor Factory channel. At LOFT, total brand comparable sales decreased 1.9%, reflecting decreases of 0.9% at LOFT and 7.9% at LOFT Outlet.
For the first-quarter, Gross margin rate for the Company is now expected to be 55.8%, reflecting a higher-than-anticipated promotional cadence, primarily at LOFT. Previously, the company anticipated Gross margin rate performance to be 56.5 percent.
Selling, general and administrative expenses are now estimated to be $290 million for the first-quarter.
Kay Krill, President and Chief Executive Officer, said, "In light of the unseasonably cold weather this Spring, we were more promotional than planned in order to move through warm weather product categories, particularly at LOFT.
From a comparable sales standpoint, LOFT's softer-than-anticipated performance reflected the breadth and depth of its warm-weather offering, combined with a challenging comparison to its strong performance in the first quarter of 2012, the company said.
Kay Krill, President and Chief Executive Officer, said, "Ann Taylor's performance reflected a more transitional wear-now assortment, which resonated with clients and delivered positive comparable sales growth. In factory outlet centers, soft traffic continued to pressure comps at both Ann Taylor Factory and Loft Outlet stores, although margins remained strong in these channels. Importantly, we entered the second quarter with very clean inventories and are well-positioned with fresh new fashion at both brands".
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