Ann Inc. on Friday reported second-quarter profits rose 52 percent to $24.8 million or 47 cents per diluted share, from $18.6 million or 31 cents per diluted share last year, beating Wall Street analyst estimates.
Sales in the second quarter grew 15 percent and comps increased 8.6 percent, the company said. Total net sales for the second quarter were up $558.2 million, compared with net sales of $483.5 million in the 2010 period.
Kay Krill, president and chief executive officer of Ann Inc., told WWD that consumers responded to the fashion at Ann Taylor and Loft. The retailer is poised for fall and beyond because “we haven’t raised our prices — only on high-demand items,” Krill said. “Our sourcing team has done an amazing job of maintaining product costs for all of 2011 and part of 2012.”
Ann Taylor is working on converting stores to a smaller, more productive prototype of 3,700 square feet to 4,200 square feet. About 20 units will be in place by the end of the second quarter, and the retailer is on track to roll out 45 in 2011.
“In new concept stores, we’re seeing more higher-priced selling because the stores look and feel elevated aesthetically,” Krill said.
Gross margin as a percentage of net sales was 55 percent, on par with last year’s record gross margin rate in the second quarter. Selling, general and administrative expenses for the quarter rose to $265.1 million, versus $235.4 million in 2010. SG&A as a percentage of net sales declined 120 basis points from the prior year to 47.5 percent. Operating income rose 39 percent to $41.7 million in the 2011 second quarter, from $29.9 million in 2010.
Comp sales at Ann Taylor rose 5 percent in the second quarter, with gains of 32 percent in e-commerce, 7 percent in factory outlets and 1 percent in the stores channel, which was softer than expected due to bold prints that didn’t resonate with clients. Loft’s comps gained 11 percent over last year, 9 percent in stores, 34 percent in e-commerce and 24 percent in outlets. Ann’s accelerated factory-outlet strategy saw the opening of 11 new Loft units in the second quarter, for a total of 72 outlet units. The company expects to add 20 new Loft factory outlets per year.
Net sales for the first six months of fiscal 2011 were $1.08 billion, compared with net sales of $959.7 million in the first half of fiscal 2010. Net income rose 26 percent in the first half of 2011 to $52.1 million, from $41.2 million in last year’s first half. Diluted earnings per share in the first half of 2011 jumped 41 percent to 97 cents, from 69 cents per diluted share last year.
For the third quarter, Ann Inc. expects net sales of $565 million and comp-store sales up in the midsingle digits. Fiscal 2011 total net sales are expected to reach nearly $2.2 billion, a 12 percent increase over fiscal 2010.
“We are exploring Canada and are pretty sure we’ll expand there later this year,” Krill said. “With our new re-platform of our e-commerce site, we’ll be able to ship internationally” and learn which countries have the most interest in Ann Taylor. “In the future, we’ll do site personalization and mobile commerce as we move toward multichannel capability.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast