Ann Taylor Reports Third Quarter 2009 Results
Better Product, Strong Gross Margin and Cost Savings Contribute to Higher Earnings
NEW YORK, Nov. 20 /PRNewswire-FirstCall/ -- Ann Taylor Stores Corporation (NYSE: ANN) today reported results for the third quarter of fiscal 2009, ended October 31, 2009.


For the quarter, the Company reported earnings per diluted share of $0.20 excluding after-tax restructuring and asset impairment charges of $0.17 per diluted share, compared with earnings per diluted share of $0.03 in the third quarter of 2008, excluding after-tax restructuring and asset impairment charges totaling $0.27 per diluted share. On a GAAP basis, including the aforementioned restructuring and impairment charges, earnings per diluted share was $0.03 in the third quarter of 2009, compared with a loss per diluted share of $0.24 in the third quarter of 2008.


Kay Krill, President and Chief Executive Officer, commented, "Our results for the quarter were a direct result of our strategy to maximize gross margin performance by tightly managing inventories, focusing on full-price selling and controlling costs. I am pleased that our performance also reflects the cumulative benefits of our ongoing restructuring program initiatives. Today, we are a more efficient and effective Company. Our emphasis going forward is to continue the repositioning of the Ann Taylor division and to ensure that LOFT further strengthens its positioning as the destination for casual, feminine and stylish product at great value.


"We have made significant progress on enhancing and differentiating our brands and providing our clients with style, quality and value. LOFT's product offering resonated with our clients, with casual apparel performing particularly well. I am pleased with the response to our newer categories, which expand the LOFT brand to better serve our clients' lifestyle needs. At Ann Taylor, the launch of the new Fall collection was an important first step in our multi-season strategy to reposition the brand. The initial client response has been encouraging, and we look forward to further progress as we continue to test, learn from and refine the assortment. Looking ahead, we expect to build on the product successes we've achieved to date and move forward on our objective of building sales momentum and profitable growth."


Fiscal 2009 Third Quarter Results


Net sales for the third quarter of fiscal 2009 were $462.4 million, compared with net sales of $527.2 million in the third quarter of fiscal 2008. By division, net sales at Ann Taylor were $112.3 million in the third quarter of 2009, compared with net sales of $159.5 million in the third quarter of 2008. At LOFT, net sales were $234.0 million in the third quarter of 2009, compared with net sales of $263.0 million in the third quarter of 2008.


Comparable store sales for the quarter declined 13.7% versus the prior year. At Ann Taylor, comparable store sales declined 25.8% and at LOFT, comparable stores sales declined 9.7%.


Gross margin, as a percentage of sales, was 57.3%, 850 basis points higher than the gross margin rate achieved in the third quarter of 2008. This strong gross margin performance reflected the success of the Company's strategy to conservatively position inventory levels across both divisions as well as a lower level of promotional activity in the quarter.


Selling, general and administrative expenses for the third quarter of 2009 declined by approximately $8.6 million, or 3.4% versus year-ago, to $246.2 million, relative to a 2.5% decline in weighted average square footage for the quarter. This decline in expenses reflected restructuring program savings, as well as continued aggressive management of expenses, partially offset by an increase in performance-based compensation versus the 2008 period.





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