AnnTaylor's Q1 Profit Down, In-line with Estimates, Reiterates FY Guidance

AnnTaylor Stores reported Q1 net income fell 19% to $31.5 million, or $0.46/share, on sales growth of 4% to $580.3m, matching the Street's consensus estimate. The Company cited higher discounts on merchandise to clear inventory at Loft, its largest chain, for the drop in profit. AnnTaylor said it "shares some of the current concerns regarding potential macroeconomic softening," but is confident in its ability to achieve its previously issued FY EPS guidance of $2.15 - $2.25. Analysts expect $2.18/share, on average. Shares of AnnTaylor were unchanged at $36.65 in thin pre-market trading. Same-store-sales for locations open more than a year fell 3.3%: -9.0% at Loft, +0.9% at Ann Taylor. The Loft division is expected to "be back on track" for the second half of the year. Full year same-store-sales are forecast in the low-single-digit range. AnnTaylor repurchased 4.2 million shares during the quarter, at an approximate cost of $163m.

Sources: Press release, Bloomberg, MarketWatch
Commentary: April Same-Store Sales Roundup • March Same-Store Sales Roundup • AnnTaylor: Weak Q4 Earnings, Strong Outlook
Stocks/ETFs to watch: AnnTaylor Stores Corp. (ANN). Competitors: Chico's FAS Inc. (CHS), Talbots Inc. (TLB), Guess? Inc. (GES), Liz Claiborne Inc. (LIZ), Gap Inc. (GPS)

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