Ann Taylor Boosts Buyback

The fourth quarter is in line.
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Ann Taylor (ANN) posted a drop in fourth quarter earnings but guided in line for 2007 and set a new $300 million buyback plan.

The New York-based fashion retailer made $22 million, or 31 cents a share, for the quarter ended Feb. 3, down from the year-ago $27 million, or 38 cents a share. Sales rose to $610 million from $574 million a year earlier.

Analysts were looking for a 29-cent profit on sales of $610 million.

Fourth-quarter same-store sales dropped 6% from a year ago.

"Fiscal 2006 was a year of record financial performance and accomplishment," said CEO Kay Kril. "We continued to strengthen and grow our brands, improve our gross margin, and increase our supply chain efficiency and effectiveness. We successfully managed through a tough fourth quarter, given the impact of the unseasonably warm weather across much of the country and a fashion miss at LOFT, and we have entered fiscal 2007 determined to build on the progress we made in 2006 to deliver another year of record financial performance."

The company said it bought back $95 million worth of stock during the quarter, substantially completing its $125 million repurchase plan. In its place the company put a new program to buy back $300 million worth of shares.

Ann Taylor said it expects to make $2.15 to $2.25 a share for the year, compared with the $2.15 Thomson Financial analyst consensus estimate, though it warned margins will slip from 2006 levels in the first half.

Ann Taylor said it plans in the next year to expand the Celebrations line and to roll out a new Ann Taylor Beauty collection, consisting of fragrance and bath and body products, that will be available in all Ann Taylor stores beginning late this year or early next year. At Loft, the company is planning the launch this summer of a Loft maternity line in select stores and online.

Ann Taylor also said it is is "moving forward with the launch of a new concept targeted at what the company believes is a very attractive untapped opportunity in the market today. The new concept is targeted to be rolled out in fall 2008. Additionally, the company indicated that it is planning to expand its Factory business to include a Loft Factory concept, with the initial rollout currently slated for Summer 2008."