By Andria Cheng
NEW YORK (Dow Jones) -- AnnTaylor Stores Corp. on Friday posted
a wider-than-expected loss, hurt by asset write-down charges and
restructuring costs.
Consumers cutting back on discretionary spending and rising job
losses also lessened the need and demand for its professional
clothing for women.
The company said it's not giving any profit forecast for the
first quarter and for the full year, but said first-quarter sales
will be "under significant pressure." It expects to close 163
stores, more than the 117 it had previously identified, and
eliminate merit pay increases to further cut costs.
To protect itself against ongoing uncertainty in the credit
market, the women's retailer said it recently drew down $125
million of its $250 million revolving credit line, as a cushion, in
the event it needs incremental capital in the coming months.
Its fourth-quarter loss widened to $375.6 million, or $6.66 a
share, from $6.67 million, or 11 cents, a year earlier. Sales fell
to $483.4 million from $600.8 million, the New York-based company
(ANN) said. Excluding $317 million in goodwill impairments and
restructuring charges, the company said it lost $58.1 million, or
$1.03 a share. Analysts, on average, estimated a 54 cent per-share
loss, according to FactSet.
AnnTaylor shares tumbled 17% in pre-market trading.
Women's clothing retailers including Talbots Inc. (TLB), and
AnnTaylor, which owns both the Ann Taylor chain and the Loft chain,
have been among the worst hit by the across-the-board consumer
cutbacks in light of the recession. AnnTaylor, like other
retailers, was forced to slash prices to clear excess stock during
the holidays.
Gross margins, the percentage of sales left after taking out the
cost of goods sold, narrowed to 35.7% from 48.7%. The company said
it believes its margin in the fourth quarter marked a trough, and
said it expects to show "meaningful" margin improvement in the
first quarter from the fourth quarter.