AnnTaylor Stores said this morning its FQ4 net income fell 27%, its first earnings setback in six quarters, as it was forced to discount merchandise to clear excess inventory. EPS was $0.31, down from $0.38 a year ago, but ahead of consensus estimates of $0.29. Net sales were up 6% to $610.5 million, in line with estimates. Same-store sales fell 6%. The company offered guidance of $2.15-2.25 a share, slightly higher than analyst forecasts of $2.13. The company also said its board authorized a $300 million share buyback program. The company, which has 869 shops, plans to open as many as 85 stores, mostly Loft locations, while closing about ten stores this year. "Looking further out, the Company indicated that it is moving forward with the launch of a new concept targeted at what the Company believes is a very attractive untapped opportunity in the market today. The new concept is targeted to be rolled out in Fall 2008." It didn't elaborate on what the untapped opportunity might be. Among 19 analysts, six rate ANN a Buy, 11 a Hold, and two say Sell. In pre-market trading, shares are up 1.6% to $36.24.
Sources: Press Release, MarketWatch, Bloomberg
Commentary: Jim Cramer's Take on ANN
Stocks/ETFs to watch: AnnTaylor Stores Corp. (NYSE:ANN). Competitors: Chico's FAS Inc. (NYSE:CHS), Gymboree Corp. (NASDAQ:GYMB), Talbots Inc. (NYSE:TLB), Guess? Inc. (NYSE:GES), Liz Claiborne Inc. (LIZ). ETFs: Retail HOLDRS ETF (NYSEARCA:RTH), SPDR S&P Retail (NYSEARCA:XRT), PowerShares Dynamic Retail (NYSEARCA:PMR)
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