Ann (NYSE:ANN) blew away estimates on Friday with a 24% jump in second-quarter profits thanks to healthy same-store sales growth, prompting the parent of Ann Taylor and LOFT stores to upgrade its 2012 sales targets and sending its shares surging 18% out of the gate.
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New York-based Ann said it earned $30.7 million, or 63 cents a share, last quarter, compared with a profit of $24.8 million, or 47 cents a share, a year earlier. Analysts had been calling for EPS of just 51 cents.
Revenue increased 6.6% to $594.9 million, compared with the Street’s view of $585.6 million. Gross margins expanded to 55.9% from 55% the year before.
Company-wide same-store sales rose 4.7%, including 5.6% at Ann Taylor and 4.2% at LOFT.
“Clearly, our performance at both brands demonstrated strong product acceptance driven by the successful delivery of compelling fashion, excellent quality, outstanding value and an engaging shopping experience, in store and online,” CEO Kay Krill said in a statement.
At the same time, Ann upgraded its 2012 sales projection to $2.385 billion, which would surpass consensus calls from analysts for $2.37 billion. Same-store sales are expected to increase in the mid-single digits.
Management was a little less bullish about the third quarter, calling for sales of $600 million. Analysts had been projecting sales of $605.7 million.
The stronger-than-expected results and upbeat outlook lit a fire under Ann’s shares, sending them surging 17.80% to $33.15 in recent action. Earlier the shares hit a new 52-week high of $33.40, leaving them up about 34% so far in 2012.