AnnTaylor Stores Corp. (New York) has announced a 16 percent increase in net income for its second quarter ended Aug. 2, 2003. Total net sales for the quarter were up 13.7 percent.
Same-store sales in the quarter increased 5.3 percent; a year ago, the apparel retailer suffered a 0.2 percent same-store sales decrease. Same-store sales were up 4.9 percent for Ann Taylor and 5.7 percent for Ann Taylor Loft.
“Despite our slow start in the first quarter we managed to achieve record second quarter earnings, which combined with our first quarter earnings, equaled last year's record spring earnings performance,” said chairman J. Patrick Spainhour. “The second quarter was propelled by positive comparable-store sales each month for both divisions other than a slight negative comparable store sales percentage in June for Ann Taylor.
“Ann Taylor's positive comparable-store sales for the quarter were driven by strategically managed promotions that helped optimize selling of product that continued to border on being too safe, lacking color and sophistication. Ann Taylor Loft's success continued to be a full-price story fueled by momentum coming out of March driven by fashion, color, femininity and novelty product.”
Spainhour said he expected same-store sales in the fall quarter (August, September and October) to increase 3-5 percent for both divisions. And, he said, “for the fourth quarter we expected comparable-store sales to be in the range of positive 5 to positive 7 percent for both divisions.”
The retailer did acknowledge that gross margin, as a percentage of net sales, decreased to 51.9 percent for the second quarter, compared to 52.8 percent a year earlier. This decrease, it said in its statement, “is primarily due to the combined effect of lower full-price sales at Ann Taylor and lower margin rates achieved on non-full price sales at both divisions.”
The company opened two new Ann Taylor Loft stores and one Ann Taylor Factory store during the quarter, and closed one existing Ann Taylor store and one Ann Taylor Factory store. Total store square footage increased 8.1 percent.
The total store count at the end of the second quarter was 603, comprised of 350 Ann Taylor stores, 226 Ann Taylor Loft stores and 27 Ann Taylor Factory stores. During the fall season, the company plans to open approximately eight Ann Taylor stores and 44 Ann Taylor Loft stores, bringing the fiscal 2003 year total to roughly 73 store openings. The company said its total capital expenditures for fiscal 2003 is now projected at $80 million.