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Ann Taylor declares Q2 earnings, gross margins drop 47.5%
20 Aug '05
4 min read
New York based premier American specialty women's apparel retailer Ann Taylor Stores Corporation reported net income for the second quarter ended July 30, 2005 of $7,139,000, or $0.10 per share on a diluted basis (on an average of 72.5 million shares outstanding), compared to a net income of $30,087,000, or $0.41 per share on a diluted basis (on an average of 74.7 million shares outstanding) in the second quarter of fiscal 2004. Excluding the previously announced charge of $9.5 million ($0.08 per share on a diluted basis) for lease costs relating to the relocation of its corporate offices (which will be a one-time only charge), earnings per share for the second quarter of fiscal 2005 would be $0.18.
Total inventory levels at the end of the second quarter were down approximately 3 percent on a per square foot basis compared to the same period last year. By division, inventory levels on a per square foot basis were down approximately 2 percent at Ann Taylor and flat at Ann Taylor LOFT.
Gross margin, as a percentage of net sales, decreased to 47.5 percent in the second quarter of fiscal 2005, compared to 53.0 percent in the second quarter of fiscal 2004. The decrease in gross margin as a percentage of net sales is primarily due to lower full-price sales at Ann Taylor LOFT and lower margins achieved on non full-price sales at both divisions, largely due to an increase in promotional activities at both divisions.
Selling, general and administrative expenses during the second quarter of fiscal 2005 were $231,064,000, or 45.4 percent of net sales, compared to $200,364,000, or 42.4 percent of net sales, for the same period last year. The increase in selling, general and administrative expenses as a percentage of net sales primarily resulted from the one-time charge related to the relocation of the Company's corporate headquarters combined with an overall deleveraging of expenses due to the decrease in comparable store sales, partially offset by a decrease in the provision for management performance bonus.
Total inventory levels at the end of the second quarter were down approximately 3 percent on a per square foot basis compared to the same period last year. By division, inventory levels on a per square foot basis were down approximately 2 percent at Ann Taylor and flat at Ann Taylor LOFT.
Gross margin, as a percentage of net sales, decreased to 47.5 percent in the second quarter of fiscal 2005, compared to 53.0 percent in the second quarter of fiscal 2004. The decrease in gross margin as a percentage of net sales is primarily due to lower full-price sales at Ann Taylor LOFT and lower margins achieved on non full-price sales at both divisions, largely due to an increase in promotional activities at both divisions.
Selling, general and administrative expenses during the second quarter of fiscal 2005 were $231,064,000, or 45.4 percent of net sales, compared to $200,364,000, or 42.4 percent of net sales, for the same period last year. The increase in selling, general and administrative expenses as a percentage of net sales primarily resulted from the one-time charge related to the relocation of the Company's corporate headquarters combined with an overall deleveraging of expenses due to the decrease in comparable store sales, partially offset by a decrease in the provision for management performance bonus.
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