US: AnnTaylor Q2 profit slumps 27%
Women's wear retailer AnnTaylor Stores Corporation today (24 August) reported a 26.6% slump in second quarter profit on slow store traffic and poor merchandise assortments at both its Ann Taylor and Loft divisions, but beat analysts' expectations and reaffirmed its full year outlook on an improved second-half performance.
The retailer also revealed that its new store concept, due to launch in autumn 2008, will target the 'modern boomer' segment.
Net income in the three months to 4 August was $31.7m, or $0.50 per diluted share, compared with $43.2m, or $0.59 per diluted share, for the same period last year.
Net sales rose 0.7% to $614.5m from $610.0m last time, reflecting the addition of new stores and continued growth of its Factory and internet businesses. By division, net sales at Ann Taylor fell 3.4% to $216.9m, while Loft sales dropped 1.8% to $310.0m.
Comparable store sales declined 6.2%, from an increase of 10.3% in the prior year. By division, same-store sales at Ann Taylor fell 3.1% on sluggish traffic, softness in sweaters and insufficient colour.
At Loft, comparable store sales were down 10.8%, reflecting soft traffic and a product assortment "that lacked the appropriate balance of updated classics, colour and novelty."
Commenting on the results, Ann Taylor president and chief executive officer Kay Krill said: "The second quarter proved to be challenging for the company, although I am pleased with how well we have managed through the current macro-economic conditions.
"While persistent traffic softness and some product-specific issues at both divisions caused us to be promotional during the quarter, our Ann Taylor division was successful in maintaining good margins, and our Loft division aggressively moved through units to end the quarter in a healthy inventory position.
"Both divisions are heading into fall with brand appropriate product assortments and positioned to deliver what we expect to be a good second half."
In the first half of fiscal 2007, profit fell 23% to $63.1m, or $0.96 per diluted share, from $82.2m, or $1.13 per diluted share, in the first half of fiscal 2006. Net sales rose 2.5% to $1,195m, with sales at Ann Taylor falling 1.6% to $439.1m and Loft sales slipping 0.8% to $584.2m in the first half.
Comparable store sales for the six month period declined 4.8%, down 1.1% at Ann Taylor and down 10.0% at Loft.
For the full year of fiscal 2007 the company, which operates 346 Ann Taylor stores, 483 Loft stores and 58 Ann Taylor Factory stores, continues to expect to deliver earnings per diluted share in the range of $2.15 to $2.25.
It also said its new but unnamed retail concept due to launch in autumn 2008 will target what it calls the modern boomer segment, which "is a significantly underserved segment of the apparel market."
Commenting on the new concept, Ms Krill stated: "We believe that the boomer market we are targeting has been the most significantly underserved and represents a huge opportunity for us. Our approach to satisfying her needs will be unique, and we are on track for an initial launch next fall."
Girls' wear retailer Tween Brands Inc today (20 February) said its fourth quarter profit fell 11% as restructuring charges outweighed higher sales....
Teen clothing retailer Abercrombie & Fitch Co today (15 February) posted a jump in both fourth quarter and full-year profits on higher sales at its four store concepts....
Swedish fashion retail group Hennes & Mauritz (H&M) saw sales growth stage a recovery in January, despite a fall in comparable store sales in December....
Jones Apparel Group Inc today (13 February) said it had narrowed its fourth quarter loss, despite lower sales as it exited several sportswear lines....
Despite falling January, fourth quarter and full year sales, clothing retailer Gap Inc yesterday (7 February) raised its fiscal earnings guidance....
Bakers Footwear Group is confident that business will rebound in 2008, despite a double-digit comparable store sales fall in fiscal 2007....
Retailer Urban Outfitters saw fourth quarter sales surge 29% to complete a buoyant fiscal year for the company....
Women's apparel retailer Ann Taylor Stores Corporation has reported that its net sales rose 2.3% to US$2.396bn during fiscal 2007....
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