Ann Taylor Gets a Lift

Shares of Ann Taylor Stores(ANN Quote - Cramer on ANN - Stock Picks) jumped Thursday after the retailer edged past Wall Street's earnings forecasts and backed its guidance for the full year, despite weakness at its lower-priced Loft division.

The stock recently was climbing $2.29, or 6.3%, to $38.94.

The New York-based women's clothing seller earned $31.5 million, or 47 cents a share, in the quarter. That marked a drop from the company's year-earlier profit of $39 million, or 54 cents a share, but the per-share results beat analysts' average estimate by a penny.

Sales increased 4.3% to $580.3 million, compared with Wall Street's forecast of $580.5 million. Same-store sales, or sales at stores open at least a year, slid 3.3%.

The company's Ann Taylor division recorded a 0.9% rise in same-store sales, but the Loft chain saw comps tumble 9%.

"As we expected, our results in the first quarter were mixed," Kay Krill, president and CEO, said in a statement. "Our Ann Taylor division continued to offer compelling product assortments that resonated with our clients and drove increased full-price selling, while our Loft division continued to be challenged with a product assortment that was not balanced and did not offer enough updated classics or color."

This weakness in Loft sales led to increased promotions, which significantly cut into gross margins, Krill added.

Looking ahead, Krill said Ann Taylor's product assortments are improving at Loft, and she expects the division to be back on track for the second half of the year.

Ann Taylor backed its prior projection for fiscal-year earnings of $2.15 to $2.25 a share, in line with analysts' average forecast of $2.18. The company expects full-year comps to increase in the low-single-digit range.