Ann Taylor Braces For Competitive Holidays

NEW YORK CITY-Executives at Ann Taylor Stores have cut the company’s full-year guidance from between $2.15 and $2.25 per share to $2.05 to $2.15, based on the coming holiday season. “Everything we are reading and hearing is that it’s going to get more competitive and promotional,” said Kay Krill, the apparel retailer’s president and CEO, during a third-quarter conference call.

During the period, which ended Nov. 3, the company’s same-store sales dropped 0.4% year over year. This was due to a 4.4% fall at its 354 Ann Taylor stores and a 0.3% drop at the 500-unit Ann Taylor Loft division. Both chains were hurt by unseasonable warm weather during the quarter, management says.

Krill says she sees sales picking up this month because of colder weather. She is also encouraged by fourth-quarter revenues because of perceived better product offerings, mores “seasonless” apparel that is not as impacted by weather, healthy inventory levels, more gift-giving options in stores and the company’s newly-launched beauty line.

Ann Taylor is still on track to open its new “modern boomer” concept next fall, which Krill says could become a $1-billion business. Additionally, the retailer is launching its first Loft outlet stores next year. Ann Taylor currently operates 67 namesake factory stores.

Third-quarter net sales rose 6%, hitting $601 million, and net income grew 3.8%, to $40.8 million. During the quarter, the company opened nine Ann Taylors, 20 Lofts and nine outlets. It closed one Ann Taylor and three Lofts.