EXHIBIT 99.1
ANNTAYLOR
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NEWS RELEASE
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142 West 57th St., New York, NY 10019
FOR IMMEDIATE RELEASE
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ANN TAYLOR ANNOUNCES JANUARY SALES RESULTS
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AND PROVIDES FISCAL YEAR 2003 GUIDANCE
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New York, New York, February 6, 2003 - AnnTaylor Stores Corporation
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(NYSE: ANN) announced today that total net sales for the four week period
ended February 1, 2003 decreased 3.7 percent to $81,903,000, from total net
sales of $85,037,000 for the four week period ended February 2, 2002.
Comparable store sales for the fiscal 2002 January period decreased 10.3
percent, compared to a comparable store sales increase of 14.6 percent for
the same four week period last year. By division, comparable store sales
were down 9.6 percent for Ann Taylor compared to a 16.2 percent increase last
year, and down 12.2 percent for Ann Taylor Loft compared to an 11.8 percent
increase last year.
For the fiscal quarter ended February 1, 2003, the Company's net sales
totaled $352,213,000, down 5.2 percent from $371,386,000 in the fourth
quarter of fiscal 2001. Comparable store sales for the fourth quarter of
fiscal 2002 decreased 12.3 percent, compared to a comparable store sales
increase of 2.1 percent in the fourth quarter of fiscal 2001. By division,
comparable store sales were down 14.6 percent for Ann Taylor compared to flat
last year and down 7.1 percent for Ann Taylor Loft compared to an 8.1 percent
increase last year.
Ann Taylor Chairman J. Patrick Spainhour said, "We expect to report
strong earnings performance with fourth quarter earnings per share on a
diluted basis between $0.34 - $0.35 and full year earnings per share on a
diluted basis between $1.71 - $1.72. Our ability to deliver these results
despite a continuing soft retail environment reflects excellent controls on
operations and costs, inventory management, and our success selling more
product at or near full price."
Mr. Spainhour continued, "Sales were affected by lower levels of traffic
stemming from economic uncertainty for the entire month of January and
extreme cold temperatures throughout the eastern and central regions of the
country during the last two weeks of the month. Additionally, at Loft, we
did not anniversary our end of season 50 percent off already reduced prices
promotion in January. In spite of the difficult sales climate, we continued
to experience gross margin improvement in January, with an approximate 600
basis point improvement over last year. In addition, we had a favorable
gross margin pick-up at both divisions due to the results of our year-end
physical inventory."
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"While sales throughout the year were adversely affected by the sluggish
economic environment and other factors, our ability to maximize the
profitability of those sales on our bottom line contributed to our record
2002 earnings."
"We expect to follow a similar formula in the coming year. At present,
we believe that the consumer will take a very cautious approach to apparel
purchases. Thus, we will concentrate on providing the customer with 'must
have' fashion and seek to sell that merchandise at full price. We will
continue to manage our expenses and our inventories carefully, and, as a
result, hope to deliver another year of record results."
Inventory levels at the end of January were down approximately 9 percent
on a per square foot basis compared to last year. This follows an
approximate 15 percent decrease in inventory levels on a per square foot
basis at the end of fiscal December. Both comparisons exclude inventory
attributable to Ann Taylor Global Sourcing. For fiscal year 2003 the Company
expects inventory levels to be down in the mid-single digit negative range
compared to last year.
For the 2003 Spring season, the Company currently expects to achieve
comparable store sales flat to last year, with first quarter comparable store
sales projected to be in the low single digit negative to flat range and the
second quarter comparable store sales projected to be in the low single digit
positive range. For Fall 2003, the Company is projecting comparable store
sales in the low single digit positive range.
In 2003, the Company projects a modest improvement in gross margin and a
slight decrease in selling, general and administrative expenses as a
percentage of sales for the full year. For the first quarter the Company
expects continued improvement in gross margin and an increase in selling,
general and administrative expenses as a percentage of sales.
The Company plans to open approximately 75 - 80 stores during fiscal
2003, comprised of approximately 10 - 15 Ann Taylor stores and approximately
60 - 65 Ann Taylor Loft stores. Total Company square footage increase for
the fiscal 2003 year is projected to be approximately 12 percent. This
represents an approximate 4 percent divisional square footage increase for
Ann Taylor, and an approximate 28 percent divisional square footage increase
for Ann Taylor Loft. In the first quarter of fiscal 2003, the Company plans
to open 1 new Ann Taylor store and 12 new Ann Taylor Loft stores. During the
second quarter of 2003, the Company plans to open 1 new Ann Taylor store and
7 new Ann Taylor Loft stores. Capital expenditures for 2003 are planned at
$85 million, which includes costs for new store build outs, existing store
renovations and warehouse and information system initiatives.
Based on the above financial assumptions and planned store growth, the
Company projects earnings per share on a diluted basis for the 2003 fiscal
year to be between $1.90 and $2.00. The Company projects earnings per share
on a diluted basis for the first and second quarters in the range of $0.45 -
$0.47 and $0.44 - $0.46, respectively and in the range of $1.01 - $1.07 for
the fall season.
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During the month of January, the Company opened 1 Ann Taylor Loft store
and closed 1 Ann Taylor store and 1 Ann Taylor Factory store. The total
store count at the end of fiscal year 2002 was 584, comprised of 350 Ann
Taylor stores, 207 Ann Taylor Loft stores and 27 Ann Taylor Factory stores.
Total store square footage increased 8.1 percent over the same period last
year.
For the fiscal year 2002 ended February 1, 2003, the Company's net sales
totaled $1,380,966,000, up 6.3 percent from $1,299,573,000 in fiscal 2001.
Comparable store sales for fiscal 2002 decreased 3.9 percent from the same
period last year. Comparable sales by division were down 5.3 percent for Ann
Taylor, and down 1.0 percent for Ann Taylor Loft.
Ann Taylor is one of the country's leading women's specialty retailers,
operating 584 stores in 42 states, the District of Columbia and Puerto Rico,
and also an Online Store at www.anntaylor.com.
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FORWARD-LOOKING STATEMENTS
Certain statements in this press release are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements may use the words
"expect", "anticipate", "plan", "intend", "project", "believe" and similar
expressions. These forward-looking statements reflect the Company's current
expectations concerning future events and actual results may differ
materially from current expectations or historical results. Any such
forward-looking statements are subject to various risks and uncertainties,
including failure by the Company to predict accurately customer fashion
preferences; decline in the demand for merchandise offered by the Company;
competitive influences; changes in levels of store traffic or consumer
spending habits; effectiveness of the Company's brand awareness and marketing
programs; general economic conditions or a downturn in the retail industry;
the inability of the Company to locate new store sites or negotiate favorable
lease terms for additional stores or for the expansion of existing stores;
lack of sufficient consumer interest in the Company's Online Store; a
significant change in the regulatory environment applicable to the Company's
business; an increase in the rate of import duties or export quotas with
respect to the Company's merchandise; financial or political instability in
any of the countries in which the Company's goods are manufactured; acts of
war or terrorism in the United States or worldwide; work stoppages, slowdowns
or strikes; and other factors set forth in the Company's filings with the
SEC. The Company does not assume any obligation to update or revise any
forward-looking statements at any time for any reason.
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Contact:
Barry Erdos
Chief Operating Officer
(212) 541-3318
Doreen Riely
Directory of Investor Relations
(212) 541-3484
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