Ann Inc Q4 hit by weaker Ann Taylor performance

US: Ann Inc Q4 hit by weaker Ann Taylor performance

By Petah Marian | 9 March 2012

Q4 net profit dropped 72.6% to US$2.2m
Consolidated sales increased 9.9% to $566.7m
Comparable sales declined 5.3%

Women's wear retailer Ann Inc has seen its fourth-quarter profits tumble 72.6% after being hit by a weak performance in its Ann Taylor brand combined with a of one-off charge.

The company today (9 March) said net profit dropped to US$2.2m over the three months ended 28 January. It attributed the decline to "significantly higher than anticipated promotional activity in the Ann Taylor stores channel".

Consolidated sales increased 9.9% to $566.7m, with net sales across all channels of the Ann Taylor brand up 1% to $237.3m. The Loft brand recorded 17.4% growth to $329.3m.

Comparable sales for the quarter declined 5.3%, with the Ann Taylor brand recording a 1.1% decline, reflecting a 10.9% drop at Ann Taylor stores. Loft recorded 10.5% comparable-sales growth, with an 8.1% increase in its Loft stores.

"Overall bottom-line results [in the fourth quarter] were impacted by significantly higher-than-anticipated promotional activity in the Ann Taylor stores channel," said president and CEO Kay Krill.

"Importantly, the Anntaylor.com and Ann Taylor Factory channels delivered strong results in the quarter. Our Loft brand delivered outstanding results across all three channels. We achieved very positive client response to Loft's product offering in Loft stores, as well as in our e-commerce and outlet channels during the quarter."

Full-year profit rose 17.9% to $86.6m, as sales increased by 11.7% to $2.2bn. The Ann Taylor brand recorded a 5.1% sales increase to reach $907.9m, while Loft recorded 16.8% sales growth to reach $1.3bn.

Total comparable sales increased 6.8%. Ann Taylor brand comparable sales were up 5.2%, reflecting a 1.2% decline at Ann Taylor stores, which was more than offset by the 36.8% increase in the Ann Taylor e-commerce channel, and 5.7% in the brand's factory channel.

Loft comparable sales increased 8%, which included a 5.4% gain at its Loft stores, 28.7% growth in its e-commerce channel and a 14.2% rise in its outlet channel.

Sectors: Apparel, Finance, Retail