Ann Taylor Stores Corporation Sees Q4 Total Net Sales of $500M

For the fiscal fourth quarter of 2010, Ann Taylor Stores Corporation ANN expects total net sales to approach $500 million, reflecting mid- to high-single digit comparable sales performance at the Company, including a double-digit comparable sales performance at the Ann Taylor brand, and a low-single-digit comparable sales increase at the LOFT brand.  

Gross margin rate performance is expected to approach the gross margin rate of 52.5% achieved in the fiscal fourth quarter of 2009.  Selling, general and administrative expenses are estimated to be approximately $250 million, including approximately $5 million of incremental marketing investment versus the fourth quarter of last year.  

In terms of the full year, the Company updated its outlook as follows:

• The Company currently expects fiscal 2010 total net sales to approach $1.965 billion.  In addition, the Company anticipates positive comparable sales at both brands;
• Gross margin rate performance is expected to reflect a nearly 150 basis point improvement from the 54.4% rate achieved in fiscal 2009;
• Selling, general and administrative expenses for fiscal 2010 are expected to be approximately $975 million, representing an $8 million dollar increase in SG&A from 2009 levels while achieving an anticipated increase of nearly $140 million in net sales and making an incremental marketing investment of approximately $20 million in fiscal 2010;
• The full-year 2010 effective tax rate is approximately 40%;
• Incremental restructuring savings for the year are expected to total approximately $20 million and one-time restructuring costs are estimated to be in the range of $7-$10 million.
• Total weighted average square footage is expected to decline approximately 3% by year-end, reflecting the impact of 43 store closures in fiscal 2010 under the Company's previously announced restructuring program.  This is partially offset by the opening of approximately 30 stores, comprised of approximately 20 LOFT Outlet stores and 10 LOFT stores, to support the continued growth of the LOFT brand;  
• Capital expenditures are expected to be approximately $70 million;
• A continued focus on maintaining a healthy balance sheet including a disciplined approach to inventory management throughout the fiscal year; and,
• The Company will repurchase shares under its existing $400 million share repurchase authorization.