ANN (ANN), a leading women's specialty retail fashion brands retailer, has recorded an 8.33 percent fall in profit for the quarter ended Aug. 02, 2014, due to fall in margins.
The company earned $32.68 million or $0.70 a share in the second-quarter compared with $35.65 million or $0.76 a share a year ago.
Revenue during the second-quarter went up marginally 1.64 percent to $648.66 million from $638.20 million in the last year period.
Gross margin contracted by 237 basis points over the previous year period to 52.35 percent. Total expenses as a percentage of revenues increased to 91.54 percent from 90.60 percent in the same period last year. That has resulted in contraction of 94 basis points in operating margins to 8.46 percent.
The company disclosed operating income of $54.87 million, compared with $59.98 million in the last year period.
For fiscal 2014, the company expects total net sales to be $2.560 billion, reflecting flat total company comparable sales.
Kay Krill, president and CEO, commented, "Our results for the quarter were slightly better than the outlook we provided earlier this month. As previously reported, while the quarter had started on a positive note with solid momentum through mid-June, the second half of the period proved challenging, as softer traffic levels and a highly promotional environment pressured sales and margin. In addition, LOFT experienced continued softness in basic knit tops, which represented a significant component of its summer assortment."
Cash Position
As on Aug. 02, 2014, the company's cash balance stood at $150.32 million, up 40.46 percent or $43.30 million from Aug. 03, 2013.
Working Capital
ANN has witnessed an increase in the working capital over the last one year. The company's working capital stood at $223.37 million as at Aug. 02, 2014, up $50.96 million or 29.55 percent from $172.41 million on Aug. 03, 2013. It registered an increase in current ratio to 1.74 as at Aug. 02, 2014 from 1.56 on Aug. 03, 2013.
Debt Position
ANN has witnessed a decline in long-term debt over the last one year. As on Aug. 02, 2014, long-term debt stood at $8.05 million, down 35.36 percent or $4.40 million, from Aug. 03, 2013.
The company's total debt was 0.81 percent of total assets as on Aug. 02, 2014, compared with 3.40 percent on Aug. 03, 2013.
Shares of the company gained 21 cents or 0.54 percent to close at $38.81 on Thursday.
