AnnTaylor Stores Shares Popped: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AnnTaylor Stores (NYS: ANN) were today's high fashion, jumping 14% during trading.

So what: AnnTaylor topped expectations across the board in the second quarter, something the market loves to see. Sales were $558.2 million, topping expectations of $551.4 million from analysts. Earnings expectations of $0.45 per share were easily cleared as well when management reported earnings per share of $0.47. Sales for the third quarter are expected to be $565 million, about $5 million higher than analyst's expectations.

Now what: The company's LOFT stores helped drive results, and margins are holding up well. For the third quarter, management is expecting gross margins to be higher than the 57.2% the company saw last year. With shares trading at a very reasonable 10 times forward earnings expectations, I think this would be a decent bet on a recovery in consumer spending (as contrary as that may be to the market's mood swings right now).

Interested in more info on AnnTaylor? Add it to your watchlist.

At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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