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Ann Taylor declares Q2 earnings, gross margins drop 47.5%

20 Aug '05

4 min read

During the second fiscal quarter of 2005, the Company opened 1 Ann Taylor store, 17 Ann Taylor LOFT stores and 8 Ann Taylor Factory stores. The total store count at quarter-end was 782, comprised of 361 Ann Taylor stores, 375 Ann Taylor LOFT stores and 46 Ann Taylor Factory stores.

Total store square footage increased 15.2 percent to 4,484,000 square feet as of July 30, 2005, from 3,893,000 square feet as of July 31, 2004. Total square footage by division at the end of the second quarter was 1,901,000 square feet for Ann Taylor and 2,197,000 square feet for Ann Taylor LOFT.

For the full spring season (fiscal year-to-date period ending July 30, 2005), the Company's net income was $24,110,000, or $0.33 per share on a diluted basis (on an average of 72.0 million shares outstanding), compared to net income of $61,833,000 or $0.84 per share on a diluted basis (on an average of 74.9 million shares outstanding), for the same period last year. Spring 2005 net sales totaled $985,130,000, up 8.7 percent from $905,880,000 in spring 2004. By division, net sales for the spring season were $417,965,000 for Ann Taylor compared to $435,085,000 last year, and $468,793,000 for Ann Taylor Loft compared to $393,928,000 last year. Comparable store sales for the spring 2005 season decreased 3.5 percent over the same period last year. Comparable store sales by division were down 5.5 percent for Ann Taylor and down 2.4 percent for Ann Taylor Loft.

Gross margin as a percent of net sales for the spring 2005 season was 49.2 percent, compared to 55.5 percent in spring 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.

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