Ann's fourth-quarter revenue falls short of estimates on weak sales at LOFT
(Reuters) - Women's apparel retailer Ann Inc (ANN.N) estimated fourth-quarter sales below analysts' expectations as a new line of brightly colored clothes failed to attract customers at its LOFT brand, which caters to younger women.
The company's shares were down 6 percent to $30.14 before the bell.
Weak demand for its new offerings forced the Ann Taylor parent to promote aggressively, hurting margins.
The company, whose Ann Taylor brand caters to women over the age of 30, said its gross margin rate is likely to be 49 percent, below its initial expectations.
Ann had earlier tried to avoid promotions in a bid to protect profitability, but was forced to offer half-off deals at its LOFT stores to draw in customers during the holiday season.
Retailers battled the toughest holiday season since the 2008 financial crisis as increasingly frugal customers cut discretionary spending.
Ann said fourth-quarter revenue was likely to be about $608 million, below its forecast of $625 million.
Analysts on average were looking for revenue of $624.32 million, according to Thomson Reuters I/B/E/S.
Total comparable sales at LOFT fell about 2 percent from a year earlier in the quarter ended January, the company said.
The retailer is scheduled to report fourth-quarter earnings on March 8.
(Reporting By Maria Ajit Thomas in Bangalore; Editing by Supriya Kurane)