Exhibit 99.1
ANNTAYLOR
NEWS RELEASE
142 WEST 57TH STREET NEW YORK, N.Y. 10019
ANN TAYLOR ANNOUNCES RECORD FISCAL YEAR 2003
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THIRD QUARTER NET INCOME AND EARNINGS
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NEW YORK, NEW YORK, November 12, 2003 - Ann Taylor Stores Corporation
(NYSE: ANN) announced today record net income for the third quarter ended
November 1, 2003 of $30,305,000, or $0.63 per share on a diluted basis (on an
average of 49.3 million shares outstanding), compared to net income of
$24,911,000, or $0.53 per share on a diluted basis (on an average of 48.4
million shares outstanding), in the third quarter of fiscal 2002.
As previously reported, total net sales for the third quarter of fiscal
2003 increased 16.6 percent to $396,807,000, from $340,218,000 in the third
quarter of fiscal 2002. By division, net sales were $207,077,000 for Ann Taylor
and $157,023,000 for Ann Taylor Loft. Comparable store sales for the third
quarter of fiscal 2003 increased 6.2 percent, compared to a comparable store
sales decrease of 1.1 percent for the third quarter of fiscal 2002. Comparable
store sales by division for the quarter were up 1.9 percent for Ann Taylor,
compared to a 2.9 percent decrease last year, and up 13.4 percent for Ann Taylor
Loft, compared to a 1.7 percent increase last year.
Ann Taylor Chairman J. Patrick Spainhour said, "Ann Taylor Loft's
outstanding third quarter performance is a full-price story fueled by momentum
coming out of the second quarter. Loft's excellent performance was driven by
exciting fashion, great color, and novelty product across all categories. At Ann
Taylor, our positive third quarter comparable store sales results were driven by
fall selling in our separates, woven tops, and outerwear categories. We
anticipate that our holiday product and marketing initiatives will fuel positive
fourth quarter sales results at both divisions."
Mr. Spainhour continued, "For the fourth quarter we remain comfortable
with current earnings per share guidance in the range of $0.41 - $0.43. We
expect November, December and January, comparable store sales to be in the range
of positive 5 to positive 7 percent for both divisions."
Total inventory levels at the end of the third quarter, including
inventory attributable to Ann Taylor Global Sourcing, were flat on a per square
foot basis compared to last year. By division, inventory levels on a per square
foot basis were up approximately 7 percent at Ann Taylor and down approximately
4 percent at Ann Taylor Loft. Inventory levels at Ann Taylor were up due to
higher in-transit inventory, while at Ann Taylor Loft, better product
sell-through was responsible for the lower inventory levels. The Company
continues to expect total inventory levels on a per square foot basis to be flat
to last year for the remainder of the fiscal year.
Gross margin as a percentage of net sales for the third quarter of fiscal
2003 was flat to last year at 57.7 percent.
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ANNTAYLOR 2
Selling, general and administrative expenses during the third quarter of
fiscal 2003 were $177,356,000, or 44.7 percent of net sales, compared to
$154,906,000, or 45.5 percent of net sales for the same period last year. The
decrease in selling, general and administrative expenses as a percentage of net
sales was due to increased leverage on tenancy and other fixed expenses
resulting from positive comparable store sales.
Operating profit was 13 percent of net sales in the third quarter of
fiscal 2003, compared to 12.2 percent in the third quarter of last year.
During the quarter, the Company opened five new Ann Taylor stores and 31
new Ann Taylor Loft stores. The total store count at the end of the third
quarter was 639, comprised of 355 Ann Taylor stores, 257 Ann Taylor Loft stores,
and 27 Ann Taylor Factory stores. For the remainder of fiscal 2003, the Company
plans to open two additional Ann Taylor stores and 12 additional Ann Taylor Loft
stores, bringing the total store count at the end of fiscal 2003 to 653 stores.
Total store square footage increased 9.7 percent to 3,603,000 square feet
as of November 1, 2003, from 3,285,000 square feet at the end of the third
quarter of fiscal 2002. Total square footage by division at the end of the third
quarter was 1,841,000 square feet for Ann Taylor and 1,515,000 square feet for
Ann Taylor Loft.
Total long-term debt at November 1, 2003 was $124,265,000. The Company had
no borrowings outstanding under its $175,000,000 credit facility at the end of
the third quarter of fiscal 2003.
For the fiscal year-to-date period ended November 1, 2003, the Company's
net income was a record $69,410,000, or $1.48 per share on a diluted basis (on
an average of 48.4 million shares outstanding), compared to net income of
$64,035,000 or $1.37 per share on a diluted basis (on an average of 48.4 million
shares outstanding), for the same period last year.
Fiscal year-to-date net sales totaled $1,139,031,000, up 10.7 percent from
$1,028,753,000 as of November 2, 2002. By division, net sales for the fiscal
year-to-date period were $624,441,000 for Ann Taylor and $416,954,000 for Ann
Taylor Loft. Comparable store sales for the fiscal year-to-date period increased
1.7 percent compared to a comparable store sales decrease of 0.4 percent for the
same period last year. Comparable store sales by division for the fiscal
year-to-date period were down 0.6 percent for Ann Taylor compared to a 1.6
percent decrease last year, and up 5.7 percent for Ann Taylor Loft compared to a
1.7 percent increase last year.
Gross margin as a percent of net sales for the fiscal year-to-date period
ending November 1, 2003 was 54.5 percent, compared to 54.8 percent for the same
period last year. Selling, general and administrative expenses as a percentage
of net sales were 44.1 percent, compared to 44.4 percent for the same period in
fiscal 2002.
Ann Taylor is one of the country's leading women's specialty retailers,
operating 639 stores in 43 states, the District of Columbia and Puerto Rico, and
also an Online Store at www.anntaylor.com as of November 1, 2003.
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ANNTAYLOR 3
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 client 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; the
potential impact of health concerns relating to severe infectious diseases,
particularly on manufacturing operations of the Company's vendors in Asia and
elsewhere; 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.
o o o
Contact:
Barry Erdos
Chief Operating Officer
(212) 541-3318
Doreen Riely
Director of Investor Relations
(212) 541-3484
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ANNTAYLOR 4
ANNTAYLOR STORES CORPORATION
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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FOR THE QUARTERS AND NINE MONTHS ENDED NOVEMBER 1, 2003 AND
NOVEMBER 2, 2002
(UNAUDITED)
QUARTERS ENDED NINE MONTHS ENDED
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NOV. 1, NOV. 2, NOV. 1, NOV. 2,
2003 2002 2003 2002
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(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Net sales .............................. $ 396,807 $ 340,218 $1,139,031 $1,028,753
Cost of sales .......................... 168,031 143,760 518,679 464,554
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Gross margin ........................... 228,776 196,458 620,352 564,199
Selling, general and administrative
expenses ........................... 177,356 154,906 502,634 456,412
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Operating income ....................... 51,420 41,552 117,718 107,787
Interest income ........................ 803 923 2,268 2,352
Interest expense ....................... 1,716 1,638 5,084 5,163
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Income before income taxes ............. 50,507 40,837 114,902 104,976
Income tax provision ................... 20,202 15,926 45,492 40,941
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Net income ......................... $ 30,305 $ 24,911 $ 69,410 $ 64,035
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Basic earnings per share of
common stock ........................ $ 0.68 $ 0.56 $ 1.57 $ 1.45
Weighted average shares
outstanding (000) ................... 44,697 44,328 44,255 44,206
Diluted earnings per share of
common stock ........................ $ 0.63 $ 0.53 $ 1.48 $ 1.37
Weighted average shares outstanding,
assuming dilution (000) ............. 49,343 48,364 48,449 48,373
Number of stores open at
beginning of period ................. 603 555 584 538
Number of stores opened during period .. 36 26 57 43
Number of stores expanded during period* 1 --- 5 ---
Number of stores closed during period .. --- 1 2 1
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Number of stores open at end of period . 639 580 639 580
Total store square footage at
end of period........................ 3,603,000 3,285,000
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* Expanded stores are excluded from comparable store sales for the first year
following expansion.
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ANNTAYLOR 5
ANNTAYLOR STORES CORPORATION
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CONDENSED CONSOLIDATED BALANCE SHEETS
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NOVEMBER 1, 2003 AND FEBRUARY 1, 2003
(UNAUDITED)
NOVEMBER 1, FEBRUARY 1,
2003 2003
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ASSETS (IN THOUSANDS)
Current assets:
Cash and cash equivalents ..................... $ 270,413 $ 212,821
Accounts receivable, net ...................... 17,576 10,367
Merchandise inventories ....................... 227,234 185,484
Prepaid expenses and other current assets ..... 57,994 46,599
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Total current assets ...................... 573,217 455,271
Property and equipment, net ..................... 261,424 247,115
Goodwill, net ................................... 286,579 286,579
Deferred financing costs, net ................... 3,506 4,170
Other assets .................................... 14,812 17,691
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Total assets .............................. $ 1,139,538 $ 1,010,826
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .............................. $ 79,544 $ 57,058
Accrued expenses .............................. 112,859 94,137
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Total current liabilities ................. 192,403 151,195
Long-term debt, net ............................. 124,265 121,652
Deferred lease costs and other liabilities....... 30,128 23,561
Stockholders' equity:
Common stock, $.0068 par value;
120,000,000 shares authorized;
49,347,471 and 48,932,860
shares issued, respectively ............... 336 332
Additional paid-in capital .................... 511,767 500,061
Retained earnings ............................. 362,804 296,113
Deferred compensation on restricted stock ..... (4,249) (3,968)
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870,658 792,538
Treasury stock, at cost
4,235,176 and 4,050,972
shares, respectively ................... (77,916) (78,120)
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Total stockholders' equity ................ 792,742 714,418
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Total liabilities and stockholders' equity. $ 1,139,538 $ 1,010,826
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