Earnings Preview: AnnTaylor Stores

AnnTaylor Stores (ANN) is expected to report Q4 earnings Thursday with a conference call scheduled for 8:30 a.m. ET.

Guidance

Analysts are looking for a profit of 20c on revenue of $600.49M. The consensus range is 17c to 22c for EPS, and revenue of $581.14M to $609M, according to First Call. The company recently reported its February same store sales were down -1.7% vs. consensus of down -3.6%. Net sales for the period increased 3.9% to $141.4M. On January 30, AnnTaylor announced it would undergo a multi-year restructuring program, which includes the closure of 117 underperforming stores from 2008 to 2010, and the downsizing of the company's headquarters staff by 13%. Further, in light of the ongoing macroeconomic weakness and uncertainty in the retail sector, it is taking a conservative approach to new store growth in fiscal 2008. U.S. retailers have been challenged by higher gas and food prices, as well as lower consumer spending, have also been hurt by government data that showed the job market unexpectedly shrank in February.

Analyst Views

A CL King retail analyst said cost controls and cutbacks may not be enough for some stores to weather a recession, and may need to be "more promotional" to cater to consumers.