Ann Q2 FY'13 EPS surges 21%

For the fiscal second quarter of 2013, the Company reported record earnings per diluted share of $0.76, an increase of 21 percent compared with earnings per diluted share of $0.63 in the second quarter of 2012.

Fiscal 2013 Second Quarter Results

Total net sales for the second quarter of fiscal 2013 were $638.2 million, compared with net sales of $594.9 million in the second quarter of fiscal 2012.  By brand, net sales across all channels of the Ann Taylor brand totaled $245.2 million in the second quarter of 2013, compared with net sales of $233.3 million in the second quarter of 2012.  At the LOFT brand, net sales across all channels totaled $393.0 million in the second quarter of 2013, compared with net sales of $361.6 million in the second quarter of 2012.

Total Company comparable sales for the quarter increased 2.8% versus the second quarter of 2012.  At Ann Taylor, total brand comparable sales increased 3.1%, reflecting an increase of 9.3% at Ann Taylor, partially offset by a decline of 7.2% in the Ann Taylor Factory channel.  At LOFT, total brand comparable sales were up 2.5%, reflecting an increase of 3.7% at LOFT, partially offset by a decline of 3.2% in the LOFT Outlet channel.  

Gross margin, as a percentage of net sales, was 54.7%, versus the record 55.9% gross margin rate achieved in the second quarter of 2012, reflecting an overall increase in merchandise margin rate, which was more than offset by the effect of higher client shipping costs associated with multi-channel sales. The merchandise margin rate improvement reflected the strong performance at Ann Taylor and the factory/outlet channel, partially offset by slightly lower performance at LOFT, compared with the second quarter of 2012.

Selling, general and administrative expenses for the second quarter of 2013 were $289.3 million versus $279.5 million reported in the second quarter of 2012.  As a percentage of net sales, selling, general and administrative expenses improved 170 basis points to 45.3% compared to the second quarter of 2012, due to fixed cost leveraging resulting from higher net sales, partially offset by costs associated with our year-over-year store growth and other expenses supporting the expansion of the business.

The Company reported operating income of $60.0 million in the second quarter of 2013, a 13% increase compared with operating income of $52.9 million in the second quarter of 2012.  Net income was $35.6 million in the second quarter of 2013, an increase of 16% versus the $30.7 million reported in the second quarter of 2012.  Diluted earnings per share was $0.76, an increase of 21% compared to the $0.63 per diluted share reported in the second quarter of 2012. 

The Company ended the quarter with approximately $107 million in cash, following the repurchase of approximately 1.5 million shares of its stock at a cost of approximately $49 million during the fiscal second quarter of 2013.

ANN INC