Ann Inc. Earnings: EXCEEDS Forecasts with Boost of Profit Rise

Ann Inc. (NYSE:ANN) reported net income above Wall Street’s expectations for the second quarter. Ann offers a range of career and casual separates, dresses, tops, weekend wear, shoes, and accessories to provide modern styles that are versatile across all occasions and needs.

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Ann Inc. Earnings Cheat Sheet

Results: Net income for Ann Inc. rose to $30.7 million (63 cents per share) vs. $24.8 million (47 cents per share) in the same quarter a year earlier. This marks a rise of 24% from the year-earlier quarter.

Revenue: Rose 6.6% to $594.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ann Inc. beat the mean analyst estimate of 51 cents per share. It beat the average revenue estimate of $560.8 million.

Quoting Management: Kay Krill, President and Chief Executive Officer, commented, “We are extremely pleased with ANN INC.’s record earnings per share of $0.63 this quarter, up 34% over last year. Our outstanding results were driven by a seven percent increase in sales, including a comparable sales increase of five percent, a record gross margin rate of 56 percent and a 27 percent increase in operating income.”At the Ann Taylor brand, performance accelerated significantly from the first quarter, reflecting stronger sales and profitability, including positive comps in the Ann Taylor stores channel and continued profitable growth in the e-commerce and factory outlet channels. LOFT also delivered excellent sales and profitability results, including strong margin and continued solid comp growth on top of last year’s double-digit increase. Clearly, our performance at both brands demonstrated strong product acceptance driven by the successful delivery of compelling fashion, excellent quality, outstanding value and an engaging shopping experience, in store and online.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 7 cents in the first quarter, by one cent in the fourth quarter of the last fiscal year, and by 4 cents in the third quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 7% to $560.4 million in the first quarter. The figure rose 10% in the fourth quarter of the last fiscal year from the year earlier and climbed 11.6% in the third quarter of the last fiscal year from the year-ago quarter.

Net income has increased 4.6% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 33.4% from the year-earlier quarter.

Gross margins widened last quarter, growing 0.9 percentage point from the year-earlier quarter to 55.9%. This snaps a streak of two consecutive quarters of shrinking margins.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the third quarter is 73 cents per share, up from 69 cents ninety days ago. For the fiscal year, the average estimate has moved up from $1.90 a share to $2.06 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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