ANN INC. (ANN) Issues Q4 Warning; Updates FY13 Expectations
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ANN INC. (NYSE: ANN) announced that it expects to report another year of record earnings per share, despite lower than anticipated fourth quarter performance.
Kay Krill, President and Chief Executive Officer, said, "Once again, ANN INC. expects to report record earnings per share for the fiscal year. Our 2013 performance was driven by higher sales and a healthy gross margin rate. In fact, this year marks the Company's fourth consecutive year of positive comparable sales performance at both the Ann Taylor and LOFT brands.
"We are pleased with the year's results, despite the fact that the fourth quarter came in lower than anticipated. The Company's sales, gross margin and EPS for the fourth quarter of 2013 will be higher than the fourth quarter of 2012. However, soft traffic and tepid consumer spending across the industry negatively impacted us, particularly in factory outlet centers and geographic regions that experienced extreme winter weather.
"Looking ahead, we have entered the first quarter with clean inventories and fresh Spring product at both brands. We are well-positioned to continue to maximize the potential at both of our brands, and are highly focused on delivering profitable growth at ANN INC. in the coming year," Ms. Krill concluded.
Update on Full Year 2013 Outlook
Based on preliminary results, the update to the full year 2013 outlook provided on November 22, 2013 is as follows:
* Total net sales for fiscal 2013 are now expected to be $2.493 billion, reflecting a total net sales increase of 5% and a comparable sales increase of 2%. (The Street is at $2.51 billion.)
* Gross margin rate performance is expected to be 53.9%.
* Total SG&A expenses are expected to be $1.173 billion.
* The Company's effective annual tax rate is expected to be 40.5%.
* Full-year weighted average diluted shares outstanding are expected to be approximately 46.9 million, which includes the effect of participating securities.
* Capital expenditures are expected to be approximately $150 million.
Update on Fourth Quarter 2013 Outlook
Based on preliminary results, the update to the fourth quarter 2013 outlook provided on November 22, 2013 is as follows:
* Total Company net sales for the fiscal fourth quarter of 2013 are now expected to be $623 million, reflecting a comparable sales increase of 3%. (The Street sees $636.4 million.)
-- At the Ann Taylor brand, total comparable sales declined 1%, reflecting an increase of 1% at Ann Taylor, offset by a decline of 6% in the Ann Taylor Factory channel.
-- At the LOFT brand, total comparable sales increased 6%, reflecting an increase of 8% at LOFT, partially offset by a decline of 4% in the LOFT Outlet channel.
* Gross margin rate for the Company is expected to be approximately 49.2%.
* Selling, general and administrative expenses are estimated to be $301 million.
* Total weighted average diluted shares outstanding for the fourth quarter are expected to be approximately 46.6 million, which includes the effect of participating securities.
Kay Krill, President and Chief Executive Officer, said, "Once again, ANN INC. expects to report record earnings per share for the fiscal year. Our 2013 performance was driven by higher sales and a healthy gross margin rate. In fact, this year marks the Company's fourth consecutive year of positive comparable sales performance at both the Ann Taylor and LOFT brands.
"We are pleased with the year's results, despite the fact that the fourth quarter came in lower than anticipated. The Company's sales, gross margin and EPS for the fourth quarter of 2013 will be higher than the fourth quarter of 2012. However, soft traffic and tepid consumer spending across the industry negatively impacted us, particularly in factory outlet centers and geographic regions that experienced extreme winter weather.
"Looking ahead, we have entered the first quarter with clean inventories and fresh Spring product at both brands. We are well-positioned to continue to maximize the potential at both of our brands, and are highly focused on delivering profitable growth at ANN INC. in the coming year," Ms. Krill concluded.
Update on Full Year 2013 Outlook
Based on preliminary results, the update to the full year 2013 outlook provided on November 22, 2013 is as follows:
* Total net sales for fiscal 2013 are now expected to be $2.493 billion, reflecting a total net sales increase of 5% and a comparable sales increase of 2%. (The Street is at $2.51 billion.)
* Gross margin rate performance is expected to be 53.9%.
* Total SG&A expenses are expected to be $1.173 billion.
* The Company's effective annual tax rate is expected to be 40.5%.
* Full-year weighted average diluted shares outstanding are expected to be approximately 46.9 million, which includes the effect of participating securities.
* Capital expenditures are expected to be approximately $150 million.
Update on Fourth Quarter 2013 Outlook
Based on preliminary results, the update to the fourth quarter 2013 outlook provided on November 22, 2013 is as follows:
* Total Company net sales for the fiscal fourth quarter of 2013 are now expected to be $623 million, reflecting a comparable sales increase of 3%. (The Street sees $636.4 million.)
-- At the Ann Taylor brand, total comparable sales declined 1%, reflecting an increase of 1% at Ann Taylor, offset by a decline of 6% in the Ann Taylor Factory channel.
-- At the LOFT brand, total comparable sales increased 6%, reflecting an increase of 8% at LOFT, partially offset by a decline of 4% in the LOFT Outlet channel.
* Gross margin rate for the Company is expected to be approximately 49.2%.
* Selling, general and administrative expenses are estimated to be $301 million.
* Total weighted average diluted shares outstanding for the fourth quarter are expected to be approximately 46.6 million, which includes the effect of participating securities.
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