Ann Inc. cuts sales forecast due to tepid spending
NEW YORK (AP) — The owner of the Ann Taylor and Loft chains on Thursday cut its fourth-quarter sales forecast due to soft traffic and tepid consumer spending.
Echoing weather-related woes of many other retailers, Ann Inc. said that its factory outlet centers and stores in areas hit hardest by storms suffered the most.
It said it now expects to revenue of $623 million for its fourth quarter, down from an earlier forecast of $640 million. Analysts polled by FactSet were anticipating $632.1 million.
The company said that its revenue from stores open at least a year will be up 3 percent for the quarter, with a 1 percent drop at its Ann Taylor brand and 6 percent increase at its Loft brand. Revenue from stores open at least a year is considered a key indicator of financial performance as it strips away the impact of recently opened or closed stores.
Despite the weaker sales trends, the company said it expects its gross margins for the quarter to be higher than the prior year, suggesting it did not have to do heavier discounting for the most-recent holiday shopping season.
Ann Inc. also said Thursday that it expects full-year revenue of $2.49 billion, versus its prior forecast of $2.51 billion, due to the weak fourth-quarter sales. Analysts had forecast $2.5 billion.
CEO and President Kay Krill said that the company is pleased with the year's results, despite the weaker-than-expected fourth quarter, citing strong gross margins and earnings, as well as improved sales during the rest of the year.
Shares of Ann Inc. jumped $1.52, a nearly 5 percent increase, to $32.88 by early afternoon.
The New York-based company is expected to report its full fourth-quarter results in mid-March.