Ann sales hit by weak traffic, labor strike

Ann Inc. President and CEO Kay Krill cited a number of factors that caused the company to report its first decline in same-store sales in 10 quarters.

The women’s apparel retailer reported total sales of $646.8 million for the third quarter, compared with sales of $657.5 million in the prior-year quarter. By brand, net sales across all channels of the Ann Taylor brand totaled $233.0 million in the third quarter of 2014, compared with net sales of $249.2 million in the third quarter of 2013. Net income for the third quarter declined to $29.9 million, or $0.65 per diluted share, compared to $41.2 million, or $0.89 cents per diluted share, in the prior-year quarter.

"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,” Krill said.

Same-store sales for the quarter decreased 4.3%, compared to an increase of 3.7% in the third quarter of 2013. At Ann Taylor, same-store sales decreased 6.6%, reflecting a decrease of 4.8% at Ann Taylor, which includes sales results at both Ann Taylor stores and anntaylor.com, and a decline of 10.4% in the Ann Taylor Factory channel. At LOFT, total same-store sales decreased 2.9%, reflecting decreases of 3.3% at LOFT, which includes sales results at LOFT stores and LOFT.com, and 1.0% in the LOFT Outlet channel.

"Within a challenging retail environment, we are being very aggressive in managing all aspects of the business within our control and positioning the company for long-term growth. We continue to make significant progress on our strategic growth initiatives and achieved a number of key milestones this quarter, including the further development of our omnichannel capabilities,” Krill said.

Ann Inc. ended the third quarter with 261 Ann Taylor stores, 115 Ann Taylor Factory stores, 546 LOFT stores, 126 LOFT Outlet stores and two Lou & Grey stores.