Ann Taylor's Profits Double

The New York City-based company, which operates 808 stores under the Ann Taylor and Loft flags, said company-wide profits raised to $32.3 million or 42 cents a share in the quarter ending Oct. 29 from $13.9 million, or 19 cents per share, a year earlier. The results beat analysts' expectations of 37 cents per share. Weak sales last year prompted the company to drastically reduce merchandise and forced it to reduce its third quarter forecast.

Chief executive officer Kay Krill said better inventory management and better merchandise helped turn around the numbers and pushed total sales up 11.6% to $513.9 million from $460.3 million in the third quarter of 2004. Sales at Ann Taylor stores rose 5.2% during the period to $210 million while the firm's lower priced Loft Stores saw sales grow by 16.9% to $251.8 million, due largely to 32 new store openings. The company also opened five Ann Taylor stores and three factory outlets during the quarter with year-to-date openings totaling 68. The company said it would also remodel 43 stores by year's end with 55 more remodels planned for 2006.

Sales at stores open more than a year also were up by 3.7% at Ann Taylor Stores but declined by 4.2 % at its Loft outlets due to a warmer-than-expected September that caused sluggish sales of cold-weather apparel and accessories. Krill said improved product, including a new line of specialty party dresses, and a line of fitted items has been met with a positive response from customers.

"Our clients continued to respond positively to our newer product as well as our wardrobing focus, demonstrating that we are moving in the right direction toward restoring financial performance at the Ann Taylor division," Krill said, adding that the firm's accessory business was particularly strong during the quarter. The company also said it repurchased 700,000 shares of common stock during the quarter for about $17.63 million.