On Jun 29, 2013, Zacks Investment Research downgraded
), the N.Y.-based retailer of upscale women's clothing to a Zacks
Rank #5 (Strong Sell).
Why the Downgrade?
ANN has been witnessing downward estimate revisions after it
reported disappointing first-quarter fiscal 2013 results, which
prompted management to lower its fiscal 2013 outlook.
This apparel retailer, which targets women in the age group of
25 to 55 years, declared its results on Jun 6, 2013, with
earnings of 44 cents per share, down 24.1% from 58 cents in the
prior-year quarter. The year-over-year fall in the bottom line
was primarily due to increase in promotional and markdown
activities as well as higher operating expenses.
ANN's net sales for the quarter grew 2.5% year over year to
$574.5 million, but fell short of the Zacks Consensus Estimate of
$579.0 million. Comparable store sales dropped 0.5% in the
Following weak quarterly results, ANN lowered its fiscal 2013
net sales forecast to $2.54 billion from $2.565 billion projected
earlier. Similarly, gross margin is presently expected to be
54.5%, compared with 55.0% projected earlier.
Consequently, we are witnessing a revision in the Zacks
Consensus Estimate. The Zacks Consensus Estimate for the second
quarter of fiscal 2013 fell by 3.0% and 4.4% over the last 7 and
30 days respectively, to 63 cents per share. Additionally, over
the past 7 days, the Zacks Consensus Estimate for fiscal 2013 and
2014 dropped by 1.0% and 1.6% to $2.14 and $2.49 per share,
Other Stocks to Consider
Not all stocks in the retail sector are performing as
disappointingly as ANN. Other stocks worth considering in the
apparel retail industry include
Stein Mart Inc.
Pacific Sunwear of California Inc.
) - all of which carry a Zacks Rank #2 (Buy).
ANN INC (ANN): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
PAC SUNWEAR CAL (PSUN): Free Stock Analysis
STEIN MART INC (SMRT): Free Stock Analysis
To read this article on Zacks.com click here.