Despite positive performance through mid-June, the remainder of the second quarter proved more challenging for Ann Inc., prompting the company to reduce its outlook for the second quarter so it reflects lower-than-anticipated comparable sales and gross margin rate performance.
President and CEO Kay Krill cited soft traffic across the industry and a highly promotional environment, but added that — despite delivering a positive comp for the quarter at Ann Taylor — a disappointing performance at Loft offset results.
“Loft experienced continued softness in basic knit tops that represent a meaningful component of Loft’s summer assortment. We took action to move through summer product, which pressured gross margin but enabled us to end the quarter with clean inventories at both brands," Krill added.
Based on preliminary results, the company’s updated outlook for the quarter anticipates total net sales of $648 million, reflecting a comparable-sales decline of 2.3%.
At the Ann Taylor brand, total comparable-sales increased 0.7%, reflecting an increase of 2% at Ann Taylor partially offset by a decline of 1.9% in the Ann Taylor Factory channel.
At the Loft brand, total comparable sales declined 4.1%, reflecting a decrease of 5.2% at Loft and an increase of 0.3% in the Loft Outlet channel.
Gross margin rate for the company is expected to be 52.4%.
As of May 3, the company operated 1,032 Ann Taylor, Ann Taylor Factory, Loft and Loft Outlet stores in 47 states, the District of Columbia, Puerto Rico and Canada