AnnTaylor profit tops view

NEW YORK (Reuters) - Women's clothing retailer AnnTaylor Stores Corp (ANN.N) reported higher-than-expected quarterly profit on Friday, helped by leaner inventories and better merchandise assortments at its LOFT chain.

AnnTaylor, which has been working to add more color and newness to its clothes, also cut its full-year profit forecast, as it said last week it would, due to a weak October and concerns about consumer spending.

The company's lowered forecast follows similar moves by Kohl's Corp (KSS.N), Macy's Inc (M.N) and Polo Ralph Lauren Corp (RL.N), which have heightened investor fears that this year's holiday shopping season will be weak as consumers face higher food and fuel costs, a weak housing market and uncertainty about their jobs.

New York-based AnnTaylor said net income for the fiscal third quarter ended November 3 was $40.8 million, or 66 cents per share, up 4 percent from $39.3 million, or 54 cents per share, a year earlier.

The company, which has been aggressively buying back its shares, said a lower share count boosted earnings per share by about 7 cents.

Analysts' average profit estimate was 60 cents per share, according to Reuters Estimates.

Quarterly net sales rose to $600.9 million from $566.3 million a year earlier as a greater number of stores and growth of the company's factory stores and Internet business offset a 0.4 percent decline in sales at stores open at least a year, or same-store sales.

Same-store sales fell 4.4 percent at the flagship Ann Taylor chain, which sells clothes women can wear to work, and 0.3 percent at the more casual, less expensive LOFT chain.

Sales at both chains were hurt by unseasonably warm weather in September and October, which allowed consumers to put off buying sweaters and jackets, and soft mall traffic, the company said.

Citing "significant softness in October and ongoing macroeconomic uncertainty," AnnTaylor said it now expects earnings per share of $2.05 to $2.15 for the full year, down from its prior forecast of $2.15 to $2.25.

The retailer said on November 9 that it would cut its full-year forecast, despite improving traffic and same-store sales trends at Ann Taylor and LOFT during the first few days of November, when the weather began to cool off in many parts of the country.

AnnTaylor shares were up 29 cents, or 1 percent, at $31.68 in morning trade on the New York Stock Exchange. They rose as high as $32.75 earlier in the session.