The New York-based company said in an announcement on Thursday that based on preliminary results total company net sales will be $575 million for the quarter as opposed to the $600 million it had previously disclosed.
"Looking ahead to [fiscal second quarter] we believe the company is heading into a solid position in better aligning inventory relative to demand by channel and this could provide further stability if not outright upside. Buy ANN shares," Piper Jaffray analysts Neely Tamminga and Alex Fuhrman wrote in a note Thursday.
Investors cheered the news. Shares of Ann were rising 4.1% to $31.45, at last check."In light of the unseasonably cold weather this spring, we were more promotional than planned in order to move through warm weather product categories, particularly at LOFT," CEO Kay Krill said in a statement. Ann Inc., the parent of Ann Taylor and LOFT, operates close to 1,000 stores through the two brands as well as factory and outlet stores in the U.S, Puerto Rico and Canada. The company said overall first-quarter comparable sales decreased 0.5% compared with the year-earlier period. Broken down by brand, Ann Taylor comparable sales rose 6.2%, while Ann Taylor Factory sales fell by 5.8%; LOFT comp sales dropped 0.9% and LOFT Outlet fell 7.9%. "LOFT's softer-than-anticipated performance reflected the breadth and depth of its warm-weather offering, combined with a challenging comparison to its strong performance in the first quarter of 2012," Krill said. Whereas, "Ann Taylor's performance reflected a more transitional wear-now assortment, which resonated with clients and delivered positive comparable sales growth." Ann Taylor's overall gross margin rate for first quarter is expected to be 55.8%, down from 56.5% previously stated, reflecting a "higher-than-anticipated promotional cadence, primarily at LOFT." Expenses of $290 million related to sales and other general and administrative uses for the period were slightly lower than expected, the company said. Ann Taylor will release full first quarter earnings results on June 6, 2013 before the market opens. -- Written by Laurie Kulikowski in New York. Follow @LKulikowski To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com. >To submit a news tip, email: email@example.com.
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