AnnTaylor

(ANN)

said Friday its first-quarter earnings more than doubled on higher sales and better pricing, blowing away Wall Street's forecasts, and it raised its outlook for the year.

The women's-apparel chain reported net income of $39 million, or 53 cents a share, for the quarter, up from $17 million, or 24 cents, a year ago. Analysts on Wall Street were expecting earnings of 40 cents a share, according to consensus estimates reported by Thomson First Call.

"We have been working diligently over the past year to execute on initiatives designed to deliver profitable growth by providing our client with brand-appropriate and trend-right product, while carefully managing our inventory," the company said in a statement. "In the first quarter we did just that at both AnnTaylor and LOFT."

Based on the strong results, AnnTaylor raised its earnings guidance for the year by 10 cents a share to a range of $1.70 to $1.75 a share.

The retailer's net sales rose 16.7% to $556.2 million on a same-store sales gain of 5.6% over the year-ago period, when its same-store sales declined 3.1%. By division, the company's AnnTaylor stores saw net sales rise 7.7% to $221.5 million on a same-store sales increase of 7.4%. Its AnnTaylor LOFT chain posted a 22% jump in revenue on a same-store sales gain of 4.7%.

For the year, the company said it expects same-store sales to rise in the low single-digit range, with gross margin improvement over last year coming mostly in the first half. Also, it expects selling, general and administrative expenses to grow by approximately 12% over reported 2005 levels.

During the first quarter, AnnTaylor's gross margin as a percentage of net sales increased to 56.6% in the quarter from last year's 51%, driven by higher pricing. Its operating profit was 11.4% of sales, up from 5.8%, and its inventories were down 19% on a per-square-foot basis. Selling costs were flat as a percentage of sales, at 45.2%.

The company opened one AnnTaylor store, eight AnnTaylor LOFT stores and one AnnTaylor Factory store during the period. It also closed six Ann Taylor stores, three AnnTaylor LOFT stores and one AnnTaylor Factory store. Its total store count at quarter-end was 824, comprising 352 AnnTaylor stores, 421 AnnTaylor LOFT stores and 51 Ann Taylor Factory stores.

It also repurchased 700,000 shares of its common stock at a cost of about $25.2 million.

For the year, AnnTaylor plans to open 10 new AnnTaylor stores, 60 LOFT stores and five AnnTaylor Factory stores, with net square footage growth of 7% or 8%.

Shares of AnnTaylor were recently up $1.44, or 3.9%, to $38.74 in premarket trading.