Ann Inc. profits hindered by ports dispute

Ann Inc. is blaming its huge fourth-quarter profit loss on expenses related to deep discounts and the West Coast ports dispute.

For the quarter ended Feb. 1, net earnings at Ann Inc. came in at $262,000, or 1 cent a share, compared with $4.7 million, or 10 cents a share, in the same period a year ago. Total sales rose to $647.4 million from $623.3 million, beating the analysts’ estimates of $627 million. Same-store sales rose 1%, with Ann Taylor brand sales declining 0.4% and Loft brand sales rising 1.9%.

Kay Krill, president and CEO at Ann Inc., said: "Despite a highly promotional and competitive environment, Ann Inc. achieved positive comparable sales and effectively managed expenses in the fourth quarter, generating bottom-line results that came in slightly ahead of the outlook we provided in November. In addition, we delivered on our commitment to clear excess inventory, entering fiscal year 2015 in a healthy position in all channels.

"While we are disappointed that we could not achieve a sixth consecutive year of EPS growth in 2014, I am pleased with how our team responded to the many challenges we faced during the year and we are fully committed to restoring positive growth and momentum over the course of 2015.”

The company also announced efforts to deliver an additional $35 million in cost savings by 2016 through a new selling, general and administrative optimization program.

"To that end, we are highly focused on delivering outstanding product through a seamless brand experience for our clients, recapturing gross margin and driving increased profitability through careful control of our inventories and aggressive expense management. At the same time, we expect to make continued progress on our strategic initiatives, including the successful execution of our recently-launched supply chain initiative and our new SG&A optimization program, further enhancement of our omni-channel capabilities and the continued development of our Lou & Grey concept. Together, these initiatives give us a solid foundation on which to build as we continue our commitment to driving growth and enhancing shareholder value," Krill concluded.

As of Feb. 1, the company operated 1,030 Ann Taylor, Ann Taylor Factory, LOFT, LOFT Outlet and Lou & Grey stores in 47 states.

For the first quarter of fiscal 2015, the company expects total net sales to be $605 million, reflecting same store sales that are slightly positive.