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New York & Co. Profits Surge

NEW YORK — For three specialty apparel chains posting first-quarter sales and earnings yesterday, results were mixed but matched analysts' estimates.<BR><BR>While New York & Co. Inc. posted a 65.3 percent surge in first-quarter profits, it...

NEW YORK — For three specialty apparel chains posting first-quarter sales and earnings yesterday, results were mixed but matched analysts’ estimates.

While New York & Co. Inc. posted a 65.3 percent surge in first-quarter profits, it forecast full-year earnings per share below analysts’ current estimates. Ann Taylor Stores Corp. said quarterly earnings dropped by nearly half, despite a 10 percent rise in revenues.

Aeropostale Inc. had a 37.6 percent rise in first-quarter profits, as the retailer’s teen shoppers sent same-store sales up 4.4 percent. But the retailer said second-quarter profits could miss Wall Street expectations.

In the three months ended April 30, net income at New York & Co. was $21.5 million, or 38 cents a diluted share, versus $13 million, or 25 cents, in last year’s first quarter. Net revenues increased 7.1 percent to $270 million from $252.1 million last year. Same-store sales increased 3.9 percent.

“Comparable-store sales increases were driven by strong gains in our casual apparel assortments with particular strength in activewear, denim, body shapers and jackets. We also recorded significant increases in our accessory category,” said Richard Crystal, chairman and chief executive officer of New York & Co., on a conference call.

Gross profit margin in the quarter was 36.4 percent of net revenues, unchanged from the prior year’s quarter. Sales per square foot was $85, up 11.8 percent from $76 last year.

Looking to the second quarter, the New York-based company, which expects to open 45 to 50 new stores this year, sees second-quarter earnings at 19 to 23 cents, which would compare with a loss of 20 cents in the second quarter last year. The analyst consensus is for a profit of 21 cents.

In the full year, however, New York & Co. sees earnings of $1.18 to $1.24, versus the analyst consensus of $1.25.

Shares of New York & Co. closed Thursday trading down 1 percent to $18.61 on the New York Stock Exchange.

At Ann Taylor, profits in the three months ended April 30 declined 46.5 percent to $17 million, or 24 cents a diluted share, which compared with earnings of $31.8 million, or 43 cents, in the first quarter last year.

Net revenues were $476.5 million, up 10 percent from $433.2 million a year ago, while consolidated same-store sales fell 3.1 percent. Net sales by division included a 3.6 percent dip at Ann Taylor stores to $205.7 million, and a 20.5 percent rise in sales at the firm’s Loft division to $223.4 million. Comps at Ann Taylor declined 4.9 percent, and comps at Loft were down 1.5 percent.

Aggressive markdowns punctured the company’s margins, resulting in a 51 percent gross margin rate, down significantly from 58.4 percent last year.

But while the company was disappointed with the results in each division, the firm stressed it’s committed to fixing problems — namely inventory and merchandising issues — at both Ann Taylor and Loft, and now expects full-year earnings per share to meet analysts’ estimates for $1.17.

Investors seemed to share Ann Taylor’s optimism, sending shares of the company up 2.5 percent to close at $25.95 in Thursday’s New York Stock Exchange session.

Finally, Aeropostale said after the close of the market Thursday that first-quarter profits increased to $8.6 million, or 15 cents a diluted share, compared with $6.3 million, or 11 cents, a year ago. Net sales rose 26.3 percent to $211.7 million, from $167.7 million.

In the second quarter, New York-based Aeropostale expects earnings of 20 to 23 cents, versus analysts’ projections for 23 cents.

Shares of Aeropostale added 0.4 percent in Thursday trading to $26.45.