During Ann Taylor's fourth-quarter earnings call this morning, Krill said the company is working on a prototype of a new store layout, which is intended to make units more cost effective. Further, a new store design will be applied to the Loft units, while 52 Ann Taylor locations will be re-branded throughout the year. During 2007, the company will update another 50 Ann Taylor locations.
Calling 2005, "a year of learning," Krill enthusiastically reported the company's fourth-quarter earnings. Net income for the fourth quarter ended Jan. 28 was $27.4 million, or 38 cents per share on a diluted basis on an average of 72.8 million shares outstanding. This is compared to a net loss of $12.5 million, or 18 cents per share on a diluted basis on an average of 70.7 million shares outstanding for the same year-ago period.
Total net sales for the fourth quarter were $574 million, up 17.8% from $487.4 million last year. By division, net sales were $245.9 million for Ann Taylor, compared to $220.2 million last year, and $271.3 million for Ann Taylor Loft compared to $217.2 million a year ago.
Comparable-store sales for the fourth quarter increased 6.8% compared to a 4% decrease last year. By division, comparable-store sales increased 9.8% for Ann Taylor compared to a decrease of 10.1% last year, and increased 5.5% for Ann Taylor Loft compared to a 3.2% increase last year. During the quarter, the company opened nine Ann Taylor Loft stores and two Ann Taylor Factory stores.
For the fiscal year ended Jan. 28, the company reported net income of $81.9 million, or $1.13 per share on a diluted basis, compared to net income of $63.3 million, or 88 cents per share on a diluted basis for the same period last year. Krill said the positive results were due in part to lower inventory levels at the end of the fiscal year, which were down approximately 22% on a per-sf basis compared to the same period last year. By flag, inventory levels were down approximately 18% at Ann Taylor and 23% at Ann Taylor Loft.
For the year, the company's total store square footage increased 14.2% to 4.8 million sf as of Jan. 28, from 4.2 million sf in 2004. The total is comprised of an additional 1.9 million sf for Ann Taylor and 2.5 million sf for Ann Taylor Loft. During the fiscal year, the company opened nine Ann Taylor stores, 73 Ann Taylor Loft stores and 15 Ann Taylor Factory stores and closed 11 Ann Taylor units.
Krill said the company is expecting a 32% to 33% increase in earnings per diluted share for the year, and offered a guidance of $1.60 to $1.65 on a per-diluted-share basis. The estimate includes a 6-cent operational charge.
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