US: Cost control helps Ann Taylor minimise Q1 loss
Tight control of costs and inventories has helped women's wear retailer Ann Taylor Stores Corporation to better margins and a lower-than-expected first quarter loss.
The New York based retailer, which operates the Ann Taylor and Loft stores, said net loss of the three months to 2 May was $2.3m, or $0.04 per share, ,compared with a profit of $25.9m, or $0.43 per share, a year earlier.
Quarterly sales fell 27.9% to $426.7m from $591.7m, while same-store sales plunged 30.7% from a year earlier.
Comparable store sales declined 42.7% at Ann Taylor, and were down 24.2% at Loft, as job losses and fears of unemployment led working women to rein in their spending.
However, gross margin as a percentage of sales jumped to 55.5%, up from 35.7% in the fourth quarter and from 53.2% in the first quarter of last year.
Ann Taylor president and CEO Kay Krill said: "Looking ahead, we will continue to manage prudently through this difficult period, as we ready the business to enter the fall season with compelling product assortments positioned for success."
Looking ahead, top-line results are expected to "remain under significant pressure" in the second quarter. However, an improvement is seen at both brands in the second half.
For the year, gross margin will be improved and restructuring savings will come in at $40-$45m instead of the $35-$40m forecast earlier.
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