Dramatic sales declines and charges for impairment and restructuring led AnnTaylor Stores Corp. to a larger-than-expected fourth-quarter loss, an acceleration of its store closing plans and a 38.5 percent drop in its stock Friday.
The company now plans to close 163 stores, up from an earlier projection of 117.
For the three months ended Jan. 31, the New York-based specialty retailer posted a net loss of $375.6 million, or $6.66 a diluted share, compared with a net loss of $6.7 million, or 11 cents a share, in the 2007 quarter. Ann Taylor said the results included $317 million, or $5.63 per share, in restructuring, goodwill and asset impairment charges. Excluding charges for restructuring and goodwill and asset impairment, the loss was $58.1 million, or $1.03 a share, nearly twice the 55-cent loss expected by analysts polled by Yahoo Finance.
Net sales fell 19.5 percent, to $483.4 million from $600.8 million, and dropped 24.5 percent on a comparable-store basis. At Ann Taylor Loft, volume was off 21.2 percent, with comps down 21.9 percent, while Ann Taylor sales fell 31.6 percent, to $146.3 million, and its comps pulled back 29.4 percent.
The shortfall pushed shares down $2.13 Friday to close at $3.41, earlier establishing a new 52-week, and all-time, low of $3.18.
On the company earnings call, Michael Nicholson, executive vice president, chief financial officer and treasurer, called the most recent quarter an “earnings trough” and noted the retailer took the “precautionary measure” of drawing down $125 million of its $250 million revolving credit facility “as insurance against potential disruption in the credit markets,” should it need access to working capital in spring.
Kay Krill, president and chief executive officer, told investors, “While this economic crisis was felt across all demographics, the aspirational luxury consumer was particularly hard hit, including the professional working woman, our Ann Taylor division core client.”
Both the Ann Taylor and Loft divisions felt the sting of the promotional climate at retail, and their margins experienced “significant” erosion, according to Krill.
Gross margin for the quarter fell to 35.7 percent of sales from 48.7 percent in the prior-year period.
Krill said the company ended the quarter with in-store inventories down 27 percent and total inventories down 39 percent. This will help the company plan a more “strategic promotional and markdown approach,” she said.
For the year, Ann Taylor had a net loss of $333.9 million, or $5.82 a share, versus a profit of $97.2 million, or $1.53 a share, in the prior year. Sales slid 8.4 percent, to $2.19 billion from $2.40 billion, while comps descended.
Ann Taylor said it ended the year with cash of $112 million and no debt, and that excluding any revolver borrowings, it expects to close fiscal 2009 with a comparable cash level.
My character, Dinah Madani, is just the coolest, [most] badass woman imaginable," says @amberroserevah. The actress stars in @marvel's newest series on @netflix, @thepunisher. To prepare for her role, Revah sat down with Homeland agents to get a real sense of with Dinah's day-to-day life is really like. Read our full interview on WWD.com. #wwdeye (📷: @jilliansollazzo)
A scene from the 91st annual @macys Thanksgiving Day Parade. The parade, which boasts 50 million TV viewers and 3.5 million on-site spectators, is considered one of the largest and most watched parades in the world. (📷: Jason Szenes/EPA-REX)
The circus came to @bloomingdales 59th Street on Tuesday night and lit up Lexington Avenue with acrobatic dancers, death-defying knife throwing, sword swallowing and aerial acts with no net. The 45 minutes of theatrics built up to unveiling the holiday windows depicting @swarovski crystal-encrusted circus pieces and scenes from “The Greatest Showman” – songs from the soundtrack included. See the rest of the photos on WWD.com #wwdfashion (📷: Joshua Scott)
The psychedelic fashion that pervaded the ’60s is back with an exhibit at the @museumofcityny. “Mode New York: Fashion Takes a Trip” chronicles the changing styles from 1960 through 1973 and features designers such as @ysl, @oscardelarenta and more. The exhibition, which is on display through April 1, is organized into four periods: First Lady Fasion, Youthquake, New Bohemia and New Nonchalance. Pictured here is model Pat Bardonella during the Garvey Day Parade in 1968. (📷: @kwamebphoto) #wwdeye #wwdfashion
“People should be a lot more honest in expressing both the dark and light of themselves. We need to give each other the space to do that because it’s the only way we can grow and evolve,” says @noelwells of her new film “Mr. Roosevelt,” which is largely based on her own struggles. Unexpectedly leaving @nbcsnl in 2014 after just one season, Wells felt set back in her self-esteem and career trajectory. She quickly refocused her energy to more personal projects, which led to the completion of “Mr. Roosevelt.” Read the rest of WWD’s interview with the “Master of None” actress on WWD.com #wwdeye (📷: @jilliansollazzo)
@barbrastreisand is giving fans a chance to see her perform up close in a new concert series, which makes its debut on @Netflix today. From behind-the-scenes takes to her concert performance in Miami last December, the two-hour streaming special captures Streisand in her element. Pictured here is the singer/actress photographed for WWD in 1963. (📷: Palmieri Tony) #wwdeye #wwdarchive
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)