AnnTaylor Stores Corp. (
ANN)
Q3 2009 Earnings Call Transcript
November 20, 2009 8:30 a.m. ET
Executives
Judith Pirro - Director, Investor Relations
Kay Krill - President and Chief Executive Officer
Michael J. Nicholson - Executive Vice President and Chief Financial Officer
Analysts
Adrienne Tennant - Friedman, Billings, Ramsey
Michelle Tan - Goldman Sachs
Neely Tamminga - Piper Jaffray
Tracy Kogan - Credit Suisse
Laura Champine - Cowen & Company
Roxanne Meyer - UBS
Stacy Pak - SP Research
Jennifer Black - Jennifer Black & Associates
Robin Murchison - Sun Trust Robinson Humphrey
Lorraine Hutchinson - Bank of America/Merrill Lynch
Oliver Chen - Citigroup
Jeff Black - Barclays Capital
Janet Kloppenburg - JJK Research
Presentation
Operator
Good morning, ladies and gentlemen and welcome to AnnTaylor Stores Corporation’s Third Quarter 2009 Earnings Conference Call. At the request of the company, today’s conference call is being recorded.
If you have any objections, you may disconnect at this time. Following the prepared remarks by the company, you will have the opportunity to ask questions. I would now like to turn the call over to Judy Pirro, Director, Investor Relations. Please go ahead.
Judith Pirro
Thank you (Jacky) and good morning, everyone. I’m here with Kay Krill, AnnTaylor’s President and CEO and Mike Nicholson, our CFO. As you know, earlier this morning we issued our results for the third quarter of fiscal ‘09. Kay and Mike will provide an overview of the quarter, update you on our outlook and then we’ll open the lines for questions.
Before turning it over to Kay, we would like to remind you that our discussion this morning includes forward-looking statements which are subject to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect the company’s current expectations concerning future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially. With that, let me turn it over to Kay.
Kay Krill
Good morning and thank you for joining us. I’m pleased to update you on the progress we’re making. Some of which can be seen in the earnings we reported for the third quarter.
While the environment remained challenging during the quarter and the top line continued to be pressured, our operating earnings benefited from our continued focus on the strategy we have been employing throughout the year, a strategy that calls for us to maximize our gross margin dollar performance.
To that end, I am especially pleased to report that all of our divisions achieved significant increases in gross margin rate during the quarter with LOFT nearing its historic high. Consistent with what you have heard us say many times this year, we believe that the current environment and its impact on our clients, particularly the AnnTaylor division, has caused us to take an even more prudent and disciplined approach to the business. That has been our mantra all year and it is working.
Our strategy has focused on making our inventory investment as productive as possible allowing us to generate better full price selling and keeping our merchandise edited, fresh and compelling.
On the top line, our overall sales showed some improvement on a comp basis versus the second quarter, though we came in slightly softer than we expected.
Looking at the quarter as a whole, comps were weakest in August at both AnnTaylor and LOFT and improved as new merchandise flowed into the stores and we rebuilt our inventory position to meet the consumer demand.
