ANN Inc. reported results for the fiscal fourth quarter and full year of 2014 ended January 31, 2015. For Q4, the company reported earnings per diluted share of $0.01.
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This includes the impact of $8.3 million, or $0.11 per diluted share, in incremental pre-tax air freight costs incurred in response to the West Coast port situation, without which, earnings per diluted share would have been $0.12, versus earnings per diluted share of $0.10 in the fourth quarter of fiscal 2013.
For the full year of fiscal 2014, the company reported earnings per diluted share of $1.46 on a GAAP basis, which includes the $0.23 per diluted share impact of the $17.3 million pre-tax restructuring charge recorded during the first quarter of fiscal 2014; the $0.07 per diluted share impact of the $5.0 million pre-tax charge recorded during the third quarter related to the closing of Ann Taylor's Madison Avenue store; and the $0.18 per diluted share impact of $13.3 million in incremental pre-tax air freight costs incurred during the second half of fiscal 2014 in response to the West Coast port situation.
Excluding these charges and costs, earnings per diluted share would have been $1.94, compared with earnings per diluted share of $2.19 for the full year of fiscal 2013.
Total net sales for the fourth quarter of fiscal 2014 were $647.4 million, compared with net sales of $623.3 million in the fourth quarter of fiscal 2013. By brand, net sales across all channels of the Ann Taylor brand totaled $249.9 million in the fourth quarter of 2014, compared with net sales of $246.2 million in the fourth quarter of 2013.
At the LOFT brand, net sales across all channels were $397.5 million in the fourth quarter of 2014, compared with net sales of $377.1 million in the fourth quarter of 2013.
Total company comparable sales for the quarter increased 1.0% on top of an increase of 2.9% in the fourth quarter of 2013. At Ann Taylor, total brand comparable sales declined 0.4%, reflecting flat comparable sales at Ann Taylor, which includes Ann Taylor stores and anntaylor.com, and a decline of 1.5% in the Ann Taylor Factory channel.
At LOFT, total brand comparable sales increased 1.9%, reflecting an increase of 1.0% at LOFT, which includes LOFT stores and LOFT.com, and an increase of 6.6% in the LOFT Outlet channel.
Gross margin as a percentage of net sales was 45.8%, a decrease of 350 basis points compared with the 49.3% gross margin rate achieved in the fourth quarter of 2013. The decrease in gross margin rate was primarily due to higher promotional activity at both Ann Taylor and LOFT compared with the fourth quarter of 2013, as well as the 130 basis point impact of $8.3 million in incremental air freight costs incurred in response to the West Coast port situation.
Selling, general and administrative expenses for the fourth quarter of 2014 were $295.2 million versus $301.5 million reported in the fourth quarter of 2013. As a percentage of net sales, selling, general and administrative expenses were 45.6% in the fourth quarter of 2014, compared with 48.4% in the fourth quarter of 2013. The 280 basis point improvement in SG&A rate during the fourth quarter of 2014 was primarily due to continued disciplined expense management, including the ongoing benefit of our first quarter 2014 restructuring, as well as lower marketing spend.
Total net sales for the full year of fiscal 2014 were $2.53 billion, compared with net sales of $2.49 billion in fiscal 2013. By brand, net sales across all channels of the Ann Taylor brand totaled $952.8 million in fiscal 2014, compared with net sales of $959.8 million in fiscal 2013. At the LOFT brand, net sales across all channels were $1,580.7 million in 2014, compared with net sales of $1,533.7 million in 2013.
Total company comparable sales for the full year of fiscal 2014 decreased 1.9%. At the Ann Taylor brand, total comparable sales decreased 2.2%, including decreases of 0.7% at Ann Taylor and 5.2% at Ann Taylor Factory.
At the LOFT brand, total comparable sales decreased 1.7%, including a decrease of 2.4% at LOFT, partially offset by an increase of 1.3% at LOFT Outlet.
Gross margin as a percentage of net sales was 51.0%, compared with 53.9% in fiscal 2013.
The decrease in gross margin rate was primarily due to continued traffic challenges and a highly promotional retail environment throughout much of the year, soft product performance in certain categories at LOFT during the first half and at Ann Taylor during the second half of 2014 and the impact of $13.3 million in pre-tax incremental air freight costs incurred in response to the West Coast port situation.
Selling, general and administrative expenses were $1,161.8 million, including the impact of the third-quarter pre-tax charge of $5.0 million related to the closure of Ann Taylor's Madison Avenue store, without which, selling, general and administrative expenses would have been $1,156.8 million, versus $1,173.2 million in fiscal 2013. As a percentage of net sales, selling, general and administrative expenses decreased to 45.9%.
Excluding the 0.2% impact of the aforementioned charge, selling, general and administrative expenses as a percentage of net sales would have been 45.7%, representing a 140 basis-point improvement over the 47.1% reported for 2013.
This was primarily due to lower marketing and performance-based compensation expenses as well as savings resulting from our first quarter 2014 restructuring, partially offset by an increase in occupancy costs and other variable expenses related to store growth, as well as other expenses to support the expansion of our business. ■