Ann Taylor and Loft parent Ann Inc. (NYSE:ANN) revealed a stronger third-quarter profit that trumped Wall Street expectations, as e-commerce sales and strong in-store Loft revenue helped to offset higher expenses.
The New York-based company posted net income of $32.28 million, or 62 cents a share, compared with $24.2 million, or 41 cents a share, in the same quarter last year.
The 49% increase in earnings per share surpassed average analyst estimates polled by Thomson Reuters of 57 cents.
Revenue for the three months ended Oct. 29 was $564 million, up from $505.3 million a year ago, just missing the Street’s view of $566.5 million. The results were lifted by 5.5% growth in comparable sales, or those at stores open more than a year.
Online sales fueled stronger comparable sales of its Ann Taylor brand, with a 45.8% increase in e-commerce offsetting a 5.8% decline at its retail stores. For Loft, stronger sales were led by 4.9% growth at its stores and 23% increase in its e-commerce channel.
The retailer’s gross margin, costs as a percentage of sales, improved slightly during the quarter, driven by improved product offerings and higher full-price selling, the company said.
"ANN Inc. delivered another outstanding quarter, generating our fourth consecutive quarter of double-digit sales growth and our ninth consecutive quarter of double-digit growth in earnings and diluted earnings per share," CEO Kay Krill said. "Looking ahead to the balance of the fiscal year, we are on track to achieve another year of significant growth in sales and earnings."
Looking toward the fourth quarter, the company is anticipating net sales of $580 million, which is just ahead of analyst estimates of $577.7 million. Ann expects to book higher costs as it accelerates factory outlet expansion and increases marketing.
For the full year, the apparel store operator sees sales of $2.225 billion, which would be up 12% from the year-earlier period, and ahead of average estimates of $1.98 billion.