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Net income slips 8.1% at apparel retailer Ann in Q2FY15

August 26, 2014 (United States Of America)

While revenues at apparel retailer and NYSE-listed Ann Inc posted a marginal rise, net income slipped 8.14 percent from a year earlier in the second fiscal quarter ending August 2, 2014.

The retailer posted a net income of $32.7 million in the second quarter of 2014, down 8.14 percent from $35.6 million in the second quarter of 2013. Diluted earnings per share stood at $0.70 in the second quarter of 2014, compared to $0.76 from a year ago quarter.

Net sales for the second quarter of fiscal 2014 totalled $648.7 million, a slight rise of 1.64 percent from $638.2 million, the retailer reported in second quarter of 2013, while comparable sales dipped 2.3 percent.

Brand wise, net sales across all channels of Ann Taylor brand touched $250.0 million in the second quarter of 2014, up from net sales of $245.2 million in the second quarter of 2013. Comparable sales grew more slowly at 0.7 percent

At LOFT brand, net sales across all channels reached $398.7 million compared with $393.0 million in the second quarter of 2013. However, comparable revenues declined 4.1 percent for this brand.

Gross margin, as a percentage of net sales in the second quarter of 2014 fell to 52.4 percent against 54.7% in second quarter of 2013, which Ann said, reflects an overall decrease in merchandise margin as a result of higher-than-anticipated promotional activity.

Selling, general and administrative expenses (SG&A) for the second quarter of 2014 were $284.7 million, down from $289.3 million in comparable quarter of 2013.

Ann said as a percentage of net sales, SG&A improved 140 basis points to 43.9% compared to the second quarter of 2013, mainly from lower marketing and performance-based compensation expense.

Ann reported operating income of $54.9 million in the second quarter of 2014, compared with operating income of $60.0 million in the second quarter of 2013.

The retailer ended the quarter with $150 million in cash and cash equivalents, following the repurchase of approximately 1.3 million shares of its stock at a cost of $50 million during the second quarter of 2014.

Total inventory per square foot at the end of the second quarter rose 1 percent from a year earlier, from a 10 percent increase at Ann Taylor, and decline of 2 percent each at LOFT and factory/outlet channel.

It said, the increase at Ann Taylor reflects a shift in the timing of receipts for Fall product as well as a change in merchandise mix.

During the second quarter of 2014, Ann opened 17 stores, comprised of two Ann Taylor Factory stores, six LOFT stores and nine LOFT Outlet stores, and closed three Ann Taylor stores and six LOFT stores.

The total store count at the end of the fiscal second quarter was 1,040, comprised of 261 Ann Taylor stores, 113 Ann Taylor Factory stores, 544 LOFT stores and 122 LOFT Outlet stores.


Fibre2fashion News Desk - India
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