Ann Inc. profit, sales hit by weak traffic; inventory surges at Ann Taylor

New York – Ann Inc. beat Wall Street expectations for the third quarter with net income of $29.9 million, down 27% from $41.2 million the same quarter a year earlier. Pre-tax and after-tax charges associated with the closure of the Madison Avenue Ann Taylor store helped drive down net income.



A combination of factors including weak customer traffic, heavy promotion and West Coast port problems dampened Ann Inc. sales, which dropped 2% to $646.8 million from $657.5 million. Total same-store sales declined 4.3%, the first negative same-store results the retailer has reported in 10 quarters.



Inventory at the end of the quarter rose 8%, driven by a 22% increase in Ann Taylor stores.



For the full fiscal year, Ann Inc. expects to close about 40 stores. Same-store sales are expected to decline in both the fourth quarter and full fiscal year 2014.



“Our performance reflected weak traffic across the industry, a highly promotional retail environment and the impact of labor uncertainty at the West Coast ports, which resulted in product shipment delays in the first half of the quarter and higher air freight expense later in the period,” said Kay Krill, president and CEO Ann Inc.