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Ann Taylor Stores Corp. (ANN) filed Quarterly Report for the period ended 2011-10-29.
Ann Inc has a market cap of $1.32 billion; its shares were traded at around $25.31 with a P/E ratio of 15.9 and P/S ratio of 0.7.
This is the annual revenues and earnings per share of ANN over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ANN.
Highlight of Business Operations:
Net sales for the third quarter of Fiscal 2011 were $564.0 million, up $58.7 million, or 11.6%, as compared to the same period last year, with comparable sales increasing 5.5%. Gross margin as a percentage of net sales for the third quarter was 57.5%, a 30 basis point improvement over the rate achieved for the third quarter of Fiscal 2010. This performance reflected the benefits of profitable growth in the e-commerce and factory/outlet channels, as well as significant gross margin rate improvement at LOFT stores as compared to the third quarter of Fiscal 2010. In addition, as a result of careful planning and execution of our cost mitigation strategies, we continued to successfully navigate through the challenges of increased labor, commodity and other product costs without negatively impacting gross margin rate performance. These factors also contributed to a significant 33.4% increase in net income to $32.3 million, and a 48.8% increase in diluted earnings per share to $0.61, up from $0.41 in the third quarter of Fiscal 2010.Total net sales at our Ann Taylor brand increased 2.9%, with comparable sales increasing 2.5%, building on the strong 21.9% increase in comparable sales achieved during the third quarter of Fiscal 2010. This improvement was driven by comparable sales growth of 45.8% and 1.8% at anntaylor.com and Ann Taylor Factory stores, respectively, partially offset by a comparable sales decrease of 5.8% at Ann Taylor stores. The softness at Ann Taylor stores was primarily due to a lack of depth and breadth in color and fashion. In addition, due to the macro-economic uncertainty, our client was far more selective in her purchasing and wanted more fashion, rather than core investment pieces. As a result of these factors, we were more promotional than planned, which enabled us to clear through inventory and affected our gross margin rate performance for the quarter.
By brand, Ann Taylor’s net sales increased $6.5 million, or 2.9%, and $41.7 million, or 6.6%, for the quarter and nine months ended October 29, 2011, respectively, with comparable sales increasing 2.5% and 7.5%, respectively. The brand’s third quarter results were impacted by a merchandise mix at Ann Taylor stores that lacked depth and breadth in fashion and color. Although traffic remained strong, this caused a decrease in AURs and DPTs and a 5.8% decrease in comparable sales at the Ann Taylor stores channel. The brand’s e-commerce business achieved another quarter of significant top-line growth, with comparable sales increasing 45.8%, driven by increases in traffic, conversion and average order value.
At the LOFT brand, net sales increased $52.2 million, or 18.5%, and $139.2 million, or 16.7%, for the quarter and nine months ended October 29, 2011, respectively, with comparable sales increasing 7.9% and 7.1%, respectively. LOFT’s third quarter results reflect the impact of the brand’s feminine, casual fashion and value proposition. This drove increases in AURs, UPTs and DPTs and higher levels of full price sell-through, particularly in the LOFT stores channel. LOFT’s e-commerce and LOFT Outlet channels also experienced significant top-line growth. At LOFT.com, increases in traffic, conversion and average order values contributed to a 23.0% increase in comparable sales for the quarter. Net sales at LOFT Outlet also increased significantly, reflecting the impact of our Spring 2011 accelerated expansion strategy, as well as a 10.9% increase in comparable sales.
Certain judgments and estimates underlie our projected revenues and related expenses under the program, including projected future store counts, the number of applications processed, our projected sales growth and points breakage, among other things. During the quarters ended October 29, 2011 and October 30, 2010, we recognized approximately $11.0 million and $9.1 million of revenue related to the credit card program, respectively. During the nine months ended October 29, 2011 and October 30, 2010, we recognized approximately $14.6 million and $13.1 million of revenue related to the credit card program, respectively. At October 29, 2011, January 29, 2011 and October 30, 2010, approximately $4.7 million, $5.8 million and $6.1 million, respectively, of deferred credit card income is included in “Accrued expenses and other current liabilities” on our Condensed Consolidated Balance Sheets. Partially offsetting the income from the credit card program are costs, net of points breakage, related to the customer loyalty program. These costs are included in either cost of sales or in net sales as a sales discount, as appropriate. The cost of sales impact, net of points breakage, was approximately $1.1 million and $(1.3) million and the sales discount impact was approximately $1.4 million and $0.2 million for the quarters ended October 29, 2011 and October 30, 2010, respectively. The cost of sales impact, net of points breakage, was approximately $2.9 million and zero and the sales discount impact was approximately $3.8 million and $2.0 million for the nine months ended October 29, 2011 and October 30, 2010, respectively.
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