Women’s apparel company and NYSE listed, Ann Inc, which manages Ann Taylor and Loft brands, cut its sales outlook for the third and fourth fiscal quarters of 2014, as well as the full fiscal year.
Struggling with weak traffic and a high promotional environment, Ann Inc, said it now expects lower-than-anticipated sales and gross margin rate performance in the remaining part of the fiscal year.
Total net sales for the fiscal third quarter of 2014 are now expected to be $647 million, reflecting a comparable sales decline of 4.3%.
While, for the fourth fiscal quarter of 2014, it has forecast net sales totalling to $630 million, which is a comparable sales decline in low-single digits.
For the full fiscal year 2014, Ann expects net sales of $2.516 billion, also down in low-single digit comparable sales.
In the third fiscal quarter, total comparable sales decreased 6.6% at the Ann Taylor brand, from a 4.8% and 10.4% decline at Ann Taylor and Ann Taylor Factory channel, respectively.
At Loft, total comparable sales fell 2.9% in the third fiscal quarter, reflecting decreases of 3.3% at Loft and 1.0% in the Loft Outlet channel.
Gross margin rate is now expected to be 52.6%, 46.5% and 51.2% in the third and fourth fiscal quarters and the full fiscal year, respectively.
The third and fourth fiscal quarter and full year gross margin rate includes impact of around $5 million, $8 million and $13 million, respectively of incremental air freight costs.
“The incremental air freight costs are a result of labour uncertainty at the West Coast ports,” Ann explained.
Ann said total weighted average square footage for fiscal 2014 is expected to increase around 2%, reflecting the opening of around 50 new stores, partially offset by 45 store closures.
The women’s apparel marketer now expects to have around 1,030 stores towards the end of fiscal year 2014.
It also expects to maintain its healthy balance sheet, including a disciplined approach to inventory management throughout the remainder of the fiscal year. (AR)
