AnnTaylor Stores Corp. had a 7.7 percent drop in net earnings as same-store sales fell 10.8 percent in the second quarter ended Aug. 2.
Net income was $29.3 million compared with $31.7 million a year earlier. On a per diluted share basis, which excludes restructuring costs involving store closings, earnings rose 6 percent to 54 cents, against 51 cents in the year-ago quarter. The net income comparison benefited from a lower effective tax rate in the 2008 quarter, while the increase in diluted earnings reflected a benefit from a share repurchase program.
Total sales were $592.3 million compared with $614.5 million. Gross margin was 52.4 percent of net sales versus 50.6 percent in the year-ago period.
However, the company attributed the profit and sales declines only in part to the economy, and said merchandise misses and a need to modernize the image of the Ann Taylor division were also to blame.
The specialty retailer is sticking to its full-year forecast of $1.80 to $1.90 for the year. “We’ve planned second-half results and particularly fourth-quarter receipts very conservatively on the assumption of an overall negative comp,” said Kay Krill, president and chief executive officer, during a conference call.
Earlier this month, the chain named a new president, Christine Beauchamp, “to evolve and modernize our brand positioning,” Krill said. Prints and colors are being added, silhouettes are changing and trend-right modern items, such as motorcycle jackets and ruffle blouses, are being introduced.
At the Ann Taylor division, dresses, woven halters, feminine knit tops and bracelets scored well with consumers in the quarter. At Loft, tops, sweaters, dresses and prints appealed to shoppers.
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