Ann Inc ANN.N joined the few U.S. retailers that posted a rise in quarterly comparable store sales, as shoppers lapped up the women's apparel retailer's entire assortment from office wear to Kate Hudson's latest capsule collection.
The company said the strong results at its Ann Taylor and LOFT stores in the quarter ended August3 continued this month, with both posting positive comparable store sales so far.
"August is off to a strong start for us," Chief Executive Kay Krill said in a conference call after the company reported a higher-than-expected rise in second-quarter profit.
The growth in the company's same-store sales comes at a time when several U.S. retailers, including Aeropostale Inc ARO.N, Abercrombie & Fitch Co (ANF.N) and Macy's Inc (M.N), have reported steep declines in same-store sales.
"To hear that (Ann's) traffic was not an issue in this kind of a backdrop for retail ... that's very encouraging," Oppenheimer & Co analyst Anna Andreeva told Reuters.
Ann's quarterly comparable store sales rose 2.8 percent -- the first rise in three quarters. Comparable store sales at Ann Taylor rose 3.1 percent, while those at LOFT rose 2.5 percent.
The company also approved a $250 million share buyback program, which helped push its stock up as much as 4 percent in early trading on the New York Stock Exchange.
Its stock was up 2.3 percent at $33.37 by late morning and was the top gainer on the broader U.S. apparel retailers index .DJUSRA.
Ann had been forced to offer more promotions during the fourth quarter of last fiscal and the first quarter of this fiscal as customers kept away due to unseasonable weather and insipid clothing lines.
CEO Krill said customers responded well to offerings at both Ann Taylor and LOFT in the second quarter. This despite higher taxes and expensive gasoline curtailing consumer spending in the past few months.
However the company shaved it full year revenue outlook to $2.52 billion from $2.54 billion. It also forecast current quarter revenue of $655 million, below market estimates of $659.3 million, according to Thomson Reuters I/B/E/S.
"It is promotional out there and traffic levels obviously are challenging so I believe that they're just being appropriately conservative," Oppenheimer's Andreeva said.
Ann's net income rose 16 percent to $35.6 million, or 76 cents per share in the second quarter. Revenue rose 7 percent to $638.2 million.
Analysts on average were expecting profit of 65 cents per share, on revenue of $639.4 million, according to Thomson Reuters I/B/E/S.
(Editing by Savio D'Souza)