ANN INC. reported results for the fiscal first quarter of 2014, ended May 3, 2014. The Company also provided its outlook for the second quarter and updated its outlook for fiscal 2014.
For the fiscal first quarter of 2014, the Company reported earnings per diluted share of $0.11 on a GAAP basis, or $0.33 per diluted share excluding the after-tax impact of a restructuring charge of approximately $0.22 per diluted share. This compares with earnings per diluted share of $0.44 in the first quarter of 2013. There was no restructuring charge recorded in the first quarter of 2013.
Kay Krill, President and Chief Executive Officer, commented, "Despite the headwinds of severe winter weather, soft traffic across the industry and the resulting higher than anticipated promotional environment, we delivered first quarter results that met our bottom-line expectations. Importantly, traffic and sales accelerated with the return of more seasonable weather, driving positive comparable sales for April and into May.
"Looking ahead, we continue to make meaningful progress on our strategic initiatives, and we are planning for a stronger year-over-year performance in each quarter for the balance of the year. We remain highly focused on our objective to deliver our third consecutive year of record earnings per share in 2014," said Ms. Krill.
Fiscal 2014 First Quarter Results
Total net sales for the first quarter of fiscal 2014 were $590.6 million, compared with net sales of $574.5 million in the first quarter of fiscal 2013. By brand, net sales across all channels of the Ann Taylor brand totaled $219.9 million in the first quarter of 2014, compared with net sales of $219.3 million in the first quarter of 2013. At the LOFT brand, net sales across all channels were $370.6 million in the first quarter of 2014, compared with net sales of $355.2 million in the first quarter of 2013.
Total Company comparable sales for the quarter decreased 1.8% versus a decrease of 0.5% in the first quarter of 2013. At Ann Taylor, total brand comparable sales declined 2.3%, reflecting flat comparable sales at Ann Taylor, which includes Ann Taylor stores and anntaylor.com, and a decline of 7.1% in the Ann Taylor Factory channel. At LOFT, total brand comparable sales declined 1.6%, reflecting decreases of 1.8% at LOFT, which includes LOFT stores and LOFT.com, and a decline of 0.2% in the LOFT Outlet channel. (Please refer to Table 3 for a breakdown of sales by brand and channel.)
Gross margin, as a percentage of net sales was 53.4%, versus the 55.8% gross margin rate achieved in the first quarter of 2013. This performance primarily reflected stronger merchandise margin at Ann Taylor that was more than offset by higher-than-anticipated promotional levels at LOFT and in our factory outlet channels as compared with the first quarter of 2013.