Before the bell, shares had added 8.8% to $40.49.
In a 13D filing with the SEC, the private equity firm said it is in "early stage of discussions with the Issuer [Ann] and look forward to sharing their views. The Reporting Persons [Golden Gate] plan to leverage their significant retail expertise and public and private equity experience to assist in creating value for the Issuer's shareholders."
Separately, in a letter to Ann CEO Kay Krill and CFO Michael Nicholson, Golden Gate said it looks "forward to working collaboratively and constructively with you as a long-term public investor to help create value for the Company and its shareholders."
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TheStreet Ratings team rates ANN INC as a Buy with a ratings score of B. The team has this to say about their recommendation:
"We rate ANN INC (ANN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ANN INC has improved earnings per share by 6.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ANN INC increased its bottom line by earning $2.10 versus $1.63 in the prior year. This year, the market expects an improvement in earnings ($2.16 versus $2.10).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 1.1% when compared to the same quarter one year prior, going from $40.75 million to $41.19 million.
- You can view the full analysis from the report here: ANN Ratings Report
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