Discounts Take Their Toll at Ann Taylor
Ann Inc. (NYSE:ANN) declared sharply lower quarterly earnings for the quarter ended January 28. Fourth-quarter earnings fell 73 percent to $2.2 million (4 cents a share) from $8 million (14 cents a share) a year earlier. Gross margins fell to 48.9 percent from 51.7 percent in the previous year.
Profitability was affected by steep discounts at its Ann Taylor chain — a last-ditch effort to clear inventories of clothes and accessories. The Ann Taylor chain is targeted to mature women and carries premium priced products.
Excluding items, earnings came in at 10 cents a share, marginally better than the 9 cents analysts expected. However, sales grew by 10 percent to $566.7 million from $515.3 million and were more or less in line with the $566.8 million anticipated by analysts.
For the current quarter the company forecasts an improvement in gross margins to 56.5 percent and sales at about $560 million, in line with estimates by analysts.
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