Ann reports rise in Q1 net sales and earnings

Ann Inc reported GAAP earnings per diluted share of 0.29 dollars, compared with 0.11 dollars per diluted share for the fiscal first quarter of 2015 ended May 2, 2015. Total net sales for the quarter were 597.7 million dollars, compared with net sales of 590.6 million dollars in the first quarter of fiscal 2014.

According to Kay Krill, President and Chief Executive Officer, "Ann Inc delivered bottom-line results for the quarter that exceeded expectations. The results reflected a weak February but positive comparable sales performance at both Ann Taylor and Loft in the combined March and April period.”

By brand, net sales across all channels of the Ann Taylor brand totaled 211.3 million dollars in the first quarter, compared with net sales of 219.9 million dollars in the first quarter of 2014. At the Loft brand, net sales across all channels were 386.4 million dollars against 370.6 million dollars in the first quarter of 2014. Total company comparable sales for the quarter decreased 1.5 percent. At Ann Taylor, total brand comparable sales declined 3 percent, reflecting an increase of 2.6 percent at Ann Taylor, which includes Ann Taylor stores and anntaylor.com, and a decline of 14.5 percent in the Ann Taylor Factory channel.

At Loft, total brand comparable sales declined 0.6 percent, reflecting decreases of 0.7 percent at Loft, which includes Loft stores and Loft.com, and 0.2 percent in the Loft Outlet channel. Gross margin, as a percentage of net sales, was 52.3 percent, versus the 53.4 percent gross margin rate achieved in the first quarter of 2014. The overall decrease in gross margin rate performance was primarily driven by a decline in merchandise gross margin rate.

During the quarter, the company opened eight new stores, comprised of two Ann Taylor Factory stores, four Loft stores, one Loft Outlet store and one Lou & Grey store, and closed three Ann Taylor stores and one Loft store. Total store count at the end of the first quarter was 1,034, comprised of 242 Ann Taylor stores, 118 Ann Taylor Factory stores, 540 Loft stores, 128 Loft Outlet stores and six Lou & Grey stores.

Ascena Retail Group and Ann Inc recently entered into a definitive merger agreement under which Ascena will acquire Ann Inc for a combination of cash and stock in an accretive transaction. Excluding the potential impact of the aforementioned transaction with Ascena, the company expects total net sales to be 660 million dollars, reflecting total company comparable sales that are slightly positive compared to the fiscal second quarter of 2014 and gross margin rate performance to be 51.5 percent. For the full year fiscal 2015, total net sales are expected to be 2.560 billion dollars, reflecting a total company comparable sales increase in the low-single digits and gross margin rate performance of 51.5 percent. The company expects to have approximately 1,035 stores at fiscal year-end.