Ann Inc. forecasts declining sales; assesses supply chain

New York-- Ann Inc. is forecasting declining sales for the fiscal third and fourth quarter and full year 2014. The company is also launching a comprehensive, end-to-end assessment of its supply chain to identify opportunities to enhance profitability, with a focus on speed, flexibility, improving product sell-through and reducing the cost of goods sold.



Ann Inc. expects third quarter sales to be $647 million, reflecting a same-store sales decline of 4.3%. Fourth quarter sales are expected to total $630 million, reflecting a same-store sales decline in the low-single digits, while net sales for the full fiscal year are expected to be $2.62 billion, reflecting a total company same-store sales decline in the low-single digits.



"Our results for the third quarter at both the Ann Taylor and Loft brands fell short of our expectations, reflecting lower mall traffic and a highly promotional retail environment,” said Kay Krill, president and CEO Ann Inc. “In addition, sales during the first half of the quarter were negatively impacted by product shipment delays related to labor uncertainty at the West Coast ports, which were mitigated by the use of air freight later in the quarter. Further to these external pressures, Ann Taylor also experienced soft product performance in select categories, resulting in its first negative comparable sales performance in the last ten quarters."



Looking ahead to the fourth quarter, Ann Taylor expects continuing challenges from holiday promotions and air freight costs, but intends to maximize productivity and gross margin performance.