NEW YORK — Rapid sales growth from Ann Taylor Loft and an improvement in cost of sales awarded Ann Taylor Stores Corp. earnings gains of 77.2 percent for the first quarter.
“The emphasis on color, fashion and value resulted in exceptional full-priced sales across every product category,” said J. Patrick Spainhour, chairman and chief executive officer, during the company conference call.
For the three months ended May 1, the New York-based retailer saw income explode to $31.8 million, or 65 cents a diluted share, compared with earnings of $17.9 million, or 39 cents, in the year-ago quarter.
Sales for the period spiked 23.1 percent to $433.2 million from $352 million.
Sales for the company’s Ann Taylor division, which celebrates its 50th anniversary in August, rose 6 percent to $213.4 million from $201.3 million.
Jerome Jessup, senior executive vice president of merchandise and design for Ann Taylor Stores, noted on the call that only three promotional events were held between February and March of this year, compared with seven in the previous year. Jessup also pointed out that a new creative director and director of stores were brought in during the quarter, the full impact of which has yet to be felt. “Fall will represent the first efforts of the new design leadership,” said Jessup.
However, it was the company’s Ann Taylor Loft concept that ultimately drove earnings and generated excitement among consumers and management alike. Sales for the division increased 54.6 percent to $185.4 million from $119.9 million.
“Healthy comps combined with prolific store openings make Loft one of the most compelling growth stories in the industry,” said Spainhour.
According to Katherine Krill, president of the Loft division, new fashions generated excitement and spurred customers to shop more often. “Our full- priced business was so strong for the first quarter that we dramatically altered our in-store promotion pricing,” said Krill. “We did not anniversary five of our planned promotions from last year due to the sales and margin strength and momentum we experienced.”
Going forward, the company has opened a new stream of revenue, having launched anntaylorloft.com on May 3, which is producing “exciting results thus far,” Krill said.
— Ross Tucker