Ann soars as momentum builds
The stock jumps 21% after the retailer reported a quarter of gains at its Ann Taylor and Loft stores.
Investors were enamored with the retail sector, applauding strong results from Gap (GPS) and Ann, which owns the Ann Taylor and Loft brands. Ann said that same-store sales were up and profit rose, which led it to slightly raise full-year expectations.
But we're still in a difficult economic time, one in which consumer sentiment is awfully shaky. Ann's huge price jump seems a bit unwarranted; perhaps everyone is so tired of Facebook (FB) and Groupon (GRPN) that they've decided to seize upon women's clothing as the last great hope.
Let's look at some of Ann's numbers from the quarter.
Profit: Earnings per diluted share were 63 cents, up 34% from 47 cents a share a year earlier. That was a strong beat over the 51 cents analysts expected. Looking at the first six months of the year, earnings per diluted share came in at $1.21, up 25% from the first half of 2011.
Sales: Total sales were $594.9 million, up about 6.6% from a year earlier. Same-store sales (a key retail metric) rose 4.7% from a year earlier. Sales for the first six months of the year grew about 7%, and same-store sales in that period rose by 4.3%.
Guidance: Yet despite the apparent momentum, the company only raised its full-year sales estimate by less than 1% to $2.39 billion. It previously forecast $2.38 billion, and analysts are expecting $2.37 billion.
Ann has 962 stores, which include 277 Ann Taylor stores, 100 Ann Taylor Factory stores, 505 Loft stores and 80 Loft Outlet stores.
Analysts responded to the news by raising their target prices for the stock. Jefferies' Randal Konik raised his price target for Ann to $38 from $33 and reiterated a "buy" rating, according to the Associated Press. Margaret Whitfield of Sterne, Agee & Leach also kept a "buy" rating and raised her price target to $40 from $34.
Before Friday's gain, shares of Ann had risen 37% this year. If you include Friday's increase, shares have rocketed 67% this year.
More from Top Stocks
- Why Apple's lofty valuation scares me
- 5 low-risk dividend funds
- Facebook's stock plunge: Is now the time to buy?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The company plans to close stores and lay off employees, and says it needs to make some deeper changes.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.