NEW YORK — Ann Taylor Stores Corp. updated its fourth quarter 2004 guidance, forecasting a loss for the period.
The company said Friday that the loss would be in the range of 14 cents to 18 cents a diluted share versus previous guidance of between zero cents and a loss of 4 cents. For the year, the company guided earnings per share to fall between 89 cents and 93 cents on a diluted basis, compared with earlier estimates of $1.04 to $1.08.
Chairman J. Patrick Spainhour said in a statement that fall merchandise was not well received at the Ann Taylor division and that the business remained heavily promoted during holiday. Same-store sales for the quarter fell by 7.2 percent. Results at the Ann Taylor Loft were better, with the operation posting comps growth of 3.2 percent and the casual merchandise well received throughout the quarter.
The company also changed its accounting treatment for leases during the quarter, as well as incurred severance charges in connection with the departure of several staff members.
The moves to streamline are expected to generate annualized savings of $3 million, according to Merrill Lynch retail analyst Mark Friedman.
For the first quarter, the retailer expects comps to be in the low single-digit negative to flat range, with Ann Taylor stores in the mid- to high-single-digit negative range and Ann Taylor Loft in the low- to mid-single-digit positive range.
The firm said it expects to see in the first quarter “continued pressure in its gross margin, specifically at the Ann Taylor division.” It also said the pressure would be partially offset by anticipated reduced operating costs. First quarter EPS is forecasted as between 27 cents and 30 cents.
Piper Jaffray analyst Neely Tamminga estimated that comps for the first quarter will be “down by 2.1 percent,” with Ann Taylor stores expected to post a negative 5 percent comp and Ann Taylor Loft comps at positive 3 percent.
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"