Ann Taylor Reports Profit, but Sees Soft Holiday Sales
The clothing retailer Ann Taylor Stores posted a better-than-expected fiscal third-quarter profit on Friday, but shares fell as the company forecast soft sales for the holiday shopping season.
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Sales missed expectations, with both the Ann Taylor and Ann Taylor Loft chains reporting declines as its mature female customers continue to spend cautiously. Shares fell 1.4 percent.
The company said fourth-quarter sales and margins would be slightly below those of the third quarter because it expected to increase promotions to drive sales throughout the holiday shopping period.
Still, margins will be higher than a year earlier, when the financial crisis led to steep markdowns for the whole industry.
Ann Taylor said net profit was $2.1 million, or 3 cents a share, in the quarter, in contrast to a net loss of $13.4 million, or 24 cents a share, in the year-earlier period. Excluding one-time items, profit was 20 cents a share, topping Wall Street forecasts of 7 cents a share.
Sales in the period, which ended Oct. 31, fell 12 percent, to $462.4 million, missing analysts’ estimate of $473.9 million.
The company’s gross margin was 57.3 percent, 8.5 percentage points higher than in the year-earlier period.
Stock in Ann Taylor, which is based in New York, fell 19 cents, to $13.62 a share.
The chief executive, Kay L. Krill, said third-quarter sales were weakest in August, when inventories were lightest before new fall merchandise entered stores.
For the fourth quarter, the company said it expected comparable-store sales to fall at a low- to mid-teen percentage rate at Ann Taylor and to range from flat to slightly up at Loft.
