Women's clothing retailer Ann Taylor Stores (ANN) said Friday that its third-quarter profit surged, handily beating analyst estimates, as sales grew by 9%, margins remained high.
"We are extremely pleased with the Company's excellent performance for the third quarter of 2010, with earnings for the quarter more than doubling from the year-ago period," said President and CEO Kay Krill. "The significantly higher sales and near-record gross margin rate reflect another standout quarter at the Ann Taylor brand and improved results at the LOFT brand for the third quarter."
In the third quarter, the company said it earned $24.2 million, or 41 cents a share, up from $2.07 million, or 3 cents, a year earlier, when it had a charge of 17 cents a share. Excluding items, on a comparable basis, Ann Taylor reported that net income more than doubled to $24.5 million, or 42 cents per share, from $12.0 million, or 20 cents per share, in the third quarter of 2009. Analysts expected the company to earn 34 cents per share.
Sales in the quarter rose to $505.3 million from $462.4 million. Revenue also topped analyst estimates of $492.8 million. By brand, sales at the Ann Taylor brand rose 14.5% to $223.2 million, and sales at the LOFT brand rose 5.5% to $282.1 million in the third quarter. Comparable sales (sales at stores open at least a year) increased 11.7% in the quarter, versus a decline of 13.0% in the prior year. At Ann Taylor, comp sales increased 21.9%, and at LOFT they were up 4.5%.
For the fourth quarter, Ann Taylor expects total net sales to approach $500 million, reflecting mid- to high-single digit comparable sales. Analysts expect $495 million. For the full year, the company currently expects sales to approach $1.965 billion, compared to consensus estimate of $1.95 billion.
As for the crucial holiday season, Krill added, "While we anticipate a promotional environment in the upcoming months, we feel good about our overall business as we enter the fourth quarter and believe we are well-positioned in terms of our product, inventories, marketing initiatives and our planned promotional strategies for the holiday season."
Ann Taylor shares soared more than 7% in premarket trading.
Get info on stocks mentioned in this article: