ANN INC reports rocketing sales in Q1, raises outlook
ANN INC reported results for the fiscal first quarter of 2011, ended April 30, 2011. The Company also provided its outlook for the second quarter of 2011 and increased its outlook for the full year.
For the fiscal first quarter of 2011, the Company reported earnings per diluted share of $0.51, compared with earnings per diluted share of $0.38 in the first quarter of 2010.
Kay Krill, President and CEO, commented, "ANN INC. delivered a very strong first quarter performance, achieving significant double-digit growth in sales, earnings and earnings per share. We are particularly gratified that this performance came on top of very strong results in last year's first quarter, as comparable sales for the Company rose 8% on top of last year's 14% increase, with both the Ann Taylor and LOFT brands delivering positive comparable sales.
"Looking ahead, and coming off of a very strong April in both brands, we fully expect to deliver positive comparable sales performance in both brands and across all channels for the second quarter. We are also well-positioned to achieve continued profitable growth in 2011 and beyond."
Fiscal 2011 First Quarter Results
Total net sales for the first quarter of fiscal 2011 were $523.6 million, compared with net sales of $476.2 million in the first quarter of fiscal 2010. By brand, net sales across all channels of the Ann Taylor brand totaled $222.9 million in the first quarter of 2011, compared with net sales of $198.4 million in the first quarter of 2010. At the LOFT brand, net sales across all channels totaled $300.8 million in the first quarter of 2011, compared with net sales of $277.8 million in the first quarter of 2010.
Total Company comparable sales for the quarter increased 7.8% versus the first quarter of 2010. At Ann Taylor, total brand comparable sales increased 15.3%, reflecting increases of 13.7% at Ann Taylor stores, 43.1% in the Ann Taylor e-commerce channel and 9.2% in the Ann Taylor Factory channel. At LOFT, total brand comparable sales were up 2.4%, reflecting a slight decrease of 1.0% at LOFT stores, which was more than offset by increases of 32.8% in the LOFT e-commerce channel and 15.7% in the LOFT Outlet channel.
Gross margin, as a percentage of net sales, was 57.3%, versus the record 59.4% gross margin rate achieved in the first quarter of 2010. The strong gross margin performance in the first quarter of 2011 reflected solid product execution at both brands, offset by a promotional strategy to drive traffic and mitigate the combined impact of an unseasonably cool Spring, a very late Easter holiday and a highly competitive promotional environment.
Selling, general and administrative expenses for the first quarter of 2011 were $254.0 million versus $243.8 million reported in the first quarter of 2010. As a percentage of net sales, selling, general and administrative expenses declined 270 basis points versus the prior year to 48.5%. This decline in expenses as a percentage of net sales reflected substantially higher net sales and continued aggressive management of expenses, partially offset by costs associated with the Company's accelerated factory outlet strategy as well as an increase in variable costs associated with higher sales versus the 2010 period.