Women’s apparel retailer Ann Taylor Stores Corp. Friday reported a 27 percent drop in second-quarter earnings on Friday, hurt by declines in traffic and merchandise misses.

Nonetheless, shares of Ann Taylor rose 6.4 percent to $31.55 as the retailer’s bottom line bested Wall Street expectations. Ann Taylor reaffirmed its fiscal 2007 outlook, also above consensus estimates, and announced a new $300 million share buyback program.

For the three months ended Aug. 4, earnings fell to $31.7 million, or 50 cents a diluted share, from $43.2 million, or 59 cents in the year-ago period.

Sales for the quarter rose 7.3 percent to $614.5 million from $610 million, while total same-store sales declined 6.2 percent.

Analysts expected the company to post earnings of 48 cents a share on revenue of $618.3 million.

Ann Taylor reiterated its guidance range for fiscal 2007 earnings between $2.15 and $2.25 a share. Analysts expect $2.10 a share.

Also on Friday, Ann Taylor named Robert J. Luzzi chief marketing officer, effective Sept. 10. He succeeds Elaine Blotz, who resigned last week, and reports to Kay Krill, president and chief executive officer.

Luzzi has been executive vice president, chief marketing officer and creative director of New York & Co., which he joined in 2003, and earlier was with Estée Lauder for 10 years, most recently as senior vice president of creative design and advertising worldwide.

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