New York— Ann Inc. said today that its second quarter income was down 8.1%
For the quarter ended Aug. 2, Ann reported a profit of $32.7 million, or 70 cents a share, down from $35.6 million, or 76 cents a share, a year earlier. Analysts expected 68 cents a share in profit, according to Thomson Reuters.
Net sales rose 1.6% to $648.7 million, slightly above its $648 million projection earlier this month. Still, that was short of analysts’ forecast for $650.2 million in sales.
Overall comp store sales fell 2.3%, in line with the company’s projection. In May, the company had projected an increase in the low single digits.
‘Highly Promotional Environment’
By retail brand, LOFT posted a 4.1% decline, and Ann Taylor posted an increase of 0.7%, as expected. Ann Taylor Factory posted a 1.9% decline.
Gross margin narrowed to 52.4% from 54.7% as in
For third quarter of 2014, Ann Inc. expects total net sales to be $670 million, reflecting total comparable sales that are flat to slightly negative. Analysts expect revenues of $673.31 million for the third quarter.
Ann blamed “soft traffic across the industry and a highly promotional environment” in slashing its outlook.
The company again cited those reasons for its weakness in the period, even though the results “were slightly better than the outlook we provided earlier this month,” CEO Kay Krill said. “In addition, we continue to make progress on our strategic growth initiatives.”
For fiscal 2014, Ann Inc. now expects total net sales to be $2.56 billion, reflecting flat total company comparable sales. Analysts expect revenues of $2.56 billion for the year.