Ann Taylor reiterates full-year 2008 EPS outlook
AnnTaylor Stores Corporation reported results for the second quarter of fiscal 2008, ended August 2, 2008. Diluted earnings per share, excluding costs associated with the Company's previously-announced restructuring program, totaled $0.54, compared with earnings per diluted share of $0.51 in the second quarter of 2007.
On a GAAP basis, including the aforementioned restructuring costs, which totaled $0.03 and $0.01 per diluted share in the second quarters of 2008 and 2007, respectively, earnings per diluted share were $0.51 in the second quarter of 2008, compared with earnings per diluted share of $0.50 in the second quarter of 2007.
Commenting on the results of the quarter, Ann Taylor President and Chief Executive Officer Kay Krill stated, "We delivered a very respectable second quarter performance, despite the impacts of significant macroeconomic softness and a deteriorating consumer environment, both of which continue to weigh on the retail sector. Our relentless focus on inventory management and expense control, along with our share repurchase program, enabled us to deliver earnings per share that exceeded year-ago."
Ms. Krill continued, "Our focus in this difficult environment continues to be on managing the business prudently and investing in strengthening our brands to position the Company for success when the economy improves. We are highly focused on evolving and modernizing the Ann Taylor brand, maximizing the potential of LOFT, and growing our factory and internet channels.
In terms of our outlook for the balance of the year, we expect conditions to remain challenging. To mitigate the anticipated softness in consumer spending, which is likely to continue to pressure our top line, we have planned our business accordingly, concentrating on managing our expenses and inventories. Thus, despite these challenges, we are reiterating our previous guidance of diluted earnings per share for the year to be in the range of $1.80-$1.90."
Fiscal Second Quarter Results:
Net sales in the second quarter of fiscal 2008 were $592.3 million, compared with net sales of $614.5 million in the second quarter of fiscal 2007. By division, net sales at Ann Taylor were $185.7 million in the second quarter of 2008, compared with net sales of $216.9 million in the second quarter of 2007. At LOFT, net sales were $299.1 million in the second quarter of 2008, compared with net sales of $310.0 million in the second quarter of 2007.
Comparable store sales for the quarter declined 10.8% versus the prior year, with Ann Taylor down 14.3% and LOFT down 8.6%. This performance primarily reflected weak traffic across all divisions, particularly at Ann Taylor, as well as some softness in key in-store metrics.
Gross margin for the second quarter of 2008 was 52.4% of net sales, an improvement of 1.8 margin points versus the 50.6% reported in the year-ago period. This performance reflected successful inventory management and good margins at all divisions.