AnnTaylor's Q2 Net Drops 27%, But Beats; Soft Sales Miss Estimates

| About: Ann, Inc. (ANN)

AnnTaylor reported Q2 net income declined 27% to $31.7 million, or $0.50/share, on sales growth of about 1% to $614M, beating EPS estimates by $0.02, but falling short of analyst expectations for sales of $618M. ANN-EarningsChart-8-24-2007 Same-store-sales fell 6.2% on the quarter. Sales at AnnTaylor were off 3.4% to $216.9M and sales at LOFT were down 1.8% to $310M. Gross margins fell 3.6% to 50.6%. CEO Kay Krill called the quarter "challenging," noting "persistent traffic softness and some product-specific issues at both divisions caused us to be promotional during the quarter." Krill says the company's Ann Taylor and LOFT divisions are "positioned to deliver ... a good second half." Full-year EPS guidance was reaffirmed in the range of $2.15 - $2.25 (vs. analysts' average estimate of $2.10). The company repurchased 3.8M shares for $137M in Q2, completing its $300M buyback program -- the board of directors authorized a new $300M buyback program. AnnTaylor said it is planning to launch a new concept in fall 2008. Shares of AnnTaylor were last up 2.2% to $30.30 in thin pre-market trading, after gaining 0.6% to $29.64 on Thursday.

Sources: Press release, Bloomberg, MarketWatch
Commentary: July Same-Store Sales RoundupAnnTaylor's Q1 Profit Down, In-line with Estimates, Reiterates FY Guidance
Stocks/ETFs to watch: ANN. Competitors: CHS, TLB, GES, LIZ, GPS

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