Based on preliminary results, the Company's first quarter outlook, provided on March 8, 2013, is being updated as follows:
-Total Company net sales are now expected to be $575 million.
- Total Company comparable sales decreased 0.5% compared with the first quarter of 2012.
- At Ann Taylor, total brand comparable sales increased 1.9%, reflecting an increase of 6.2% at Ann Taylor, partially offset by a decrease of 5.8% in the Ann Taylor Factory channel.
- At LOFT, total brand comparable sales decreased 1.9%, reflecting decreases of 0.9% at LOFT and 7.9% at LOFT Outlet.
- Gross margin rate for the Company is now expected to be 55.8%, reflecting a higher-than-anticipated promotional cadence, primarily at LOFT.
- Selling, general and administrative expenses are now estimated to be $290 million.
- The effective tax rate for the first quarter is anticipated to be approximately 38%.
Kay Krill, President and Chief Executive Officer, said, "In light of the unseasonably cold weather this Spring, we were more promotional than planned in order to move through warm weather product categories, particularly at LOFT.
"From a comparable sales standpoint, LOFT's softer-than-anticipated performance reflected the breadth and depth of its warm-weather offering, combined with a challenging comparison to its strong performance in the first quarter of 2012.
"Ann Taylor's performance reflected a more transitional wear-now assortment, which resonated with clients and delivered positive comparable sales growth. In factory outlet centers, soft traffic continued to pressure comps at both Ann Taylor Factory and Loft Outlet stores, although margins remained strong in these channels. Importantly, we entered the second quarter with very clean inventories and are well-positioned with fresh new fashion at both brands.
"Finally, we are pleased to note that sales have improved since late April with the arrival of more seasonable temperatures, resulting in positive comparable sales at both brands," Ms. Krill said.
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