Ann Taylor reports fiscal Q4 and full year 2008 results

07 Mar '09

5 min read

At the same time, in addition to our ongoing restructuring initiatives, we are aggressively pursuing opportunities to further reduce our cost structure, including the elimination of merit increases at our corporate offices in 2009. We have also reduced our planned capital spending for 2009 by 65% versus year-ago, and we have taken further action to optimize our real estate portfolio. We believe the decisive actions we have taken to date, along with the plans we have developed for 2009, are prudent in the current environment and position the Company for success when the economy improves."

Fourth Quarter Results:
Net sales for the fourth quarter of fiscal 2008 were $483.4 million, compared with net sales of $600.8 million in the fourth quarter of fiscal 2007. By division, net sales at Ann Taylor were $146.3 million in the fourth quarter of 2008, compared with net sales of $214.0 million in the fourth quarter of 2007. At LOFT, net sales were $231.2 million in the fourth quarter of 2008, compared with net sales of $293.3 million in the fourth quarter of 2007.

Comparable store sales for the quarter declined 24.5% versus the prior year. At Ann Taylor, comparable store sales declined 29.4% and, at LOFT, comparable stores sales declined 21.9%.

Gross margin, as a percentage of sales, declined to 35.7%, compared with gross margin of 48.7% in the year-ago period. This performance reflected the unprecedented level of promotional activity across the sector to move through inventory.

During the quarter, the Company completed its annual goodwill impairment testing and, based on the significant deterioration in macroeconomic fundamentals and the related impact on the Company's market capitalization and performance outlook, the Company recorded a pre-tax non-cash goodwill impairment charge totaling $286.6 million. The Company also recorded pre-tax non-cash asset impairment charges totaling $26.8 million, related to stores not included in the Company's restructuring program.

In addition, the Company recorded pre-tax restructuring charges totaling $33.0 million during the quarter, of which $28.8 million were non-cash charges and $4.2 million were cash charges. The non-cash charges incurred during the quarter primarily reflected the write-down of assets associated with additional stores targeted for closure under the Company's store closure plan. The cash charges incurred during the quarter primarily related to severance and other costs associated with the program. In the fourth quarter of 2007, pre-tax restructuring charges totaled $30.1 million.

Click here to view more:

AnnTaylor Stores Corporation

More Ann Taylor News... More Fashion News - United States Of America...