ANN Inc. reported results for the fiscal first quarter of 2015 ended May 2, 2015. Total net sales were $597.7 million, compared with net sales of $590.6 million in Q1 2014.
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By brand, net sales across all channels of the Ann Taylor brand totaled $211.3 million in the first quarter of 2015, compared with net sales of $219.9 million in the first quarter of 2014.
At the LOFT brand, net sales across all channels were $386.4 million in the first quarter of 2015, compared with net sales of $370.6 million in the first quarter of 2014.
Total company comparable sales for the quarter decreased 1.5%. At Ann Taylor, total brand comparable sales declined 3.0%, reflecting an increase of 2.6% at Ann Taylor, which includes Ann Taylor stores and anntaylor.com, and a decline of 14.5% in the Ann Taylor Factory channel.
At LOFT, total brand comparable sales declined 0.6%, reflecting decreases of 0.7% at LOFT, which includes LOFT stores and LOFT.com, and 0.2% in the LOFT Outlet channel. (Please refer to Table 3 for a breakdown of sales by brand and channel.)
Gross margin, as a percentage of net sales, was 52.3%, versus the 53.4% gross margin rate achieved in the first quarter of 2014.
Selling, general and administrative expenses for the first quarter of 2015 were $283.7 million, versus $288.7 million reported in the first quarter of 2014.
As a percentage of net sales, selling, general and administrative expenses were 47.5%, a 140 basis-point improvement compared to the first quarter of 2014, primarily reflecting a reduction in overall store operating expenses due, in part, to the initial benefits of company's SG&A Optimization Program as well as savings resulting from our first quarter 2014 strategic realignment, partially offset by an increase in performance-based compensation expense.
The company recorded a pre-tax restructuring charge of $6.4 million during the first quarter of 2015 in connection with its previously-announced Supply Chain Initiative and SG&A Optimization Program. This compares with a pre-tax restructuring charge of $17.3 million recorded during the first quarter of 2014 in connection with the company's previously announced strategic realignment.
During the first quarter of 2015, the company reported operating income of $22.6 million on a GAAP basis, compared with GAAP operating income of $9.2 million in the first quarter of 2014.
Excluding the aforementioned restructuring charge, operating income in the first quarter of 2015 would have been $29.0 million. This compares with operating income of $26.5 million in the first quarter of 2014, which excludes the aforementioned first quarter 2014 restructuring charge.
Net income for the first quarter of 2015 was $13.6 million, or $0.29 per diluted share, on a GAAP basis, compared to $5.2 million, or $0.11 per diluted share, in the first quarter of 2014.
Excluding the $3.7 million, or $0.08 per diluted share, after-tax effect of the first quarter 2015 restructuring charge, net income would have been $17.3 million, or $0.37 per diluted share.
This compares with adjusted net income of $15.4 million, or $0.33 per diluted share, in the first quarter of 2014, which excludes the $10.2 million, or $0.22 per diluted share, after-tax effect of the first quarter 2014 restructuring charge.
The company ended the quarter with approximately $176 million in cash. ■