Web Sales Could Lift Ann's Shares Higher

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Ann Inc. ( ANN ) reported strong growth in online sales in its recently released Q1'11 earnings. The leading specialty retailer of women's apparel, shoes and accessories primarily competes with firms like Aeropostale ( ARO ),  J.Crew Group (NYSE:JCG), Jones Apparel Group ( JNY ) and Limited Brands (NYSE:LTD) in the U.S. We currently have a near $31 Trefis price estimate for Ann with LOFT e-commerce and Ann Taylor e-commerce making up ~10% and ~9% of the firm's value. Our price estimate is around 15% ahead of the current market price.

Strong Double Digit Growth in Online Sales

Ann witnessed solid growth figures in its online retail channel with total web sales increasing 36% to near $58 million from $42 million in the first quarter of 2010. E-commerce sales for the Ann Taylor brand grew 47% to $29.5 million from $20 million during the last year.

We currently forecast Ann Taylor e-commerce sales to be ~$105 million in 2011. However, better than expected growth in web sales at Ann Taylor- in line with Q1 results - would mean an upside to our estimate for Ann.

E-commerce sales growth for the Loft brand was also very strong at 31.6% year over year with sales increasing to $28 million from $21.5 million in first quarter of 2010.

We currently estimate that LOFT e-commerce will reach around $110 million in 2011, though there could be upside to our $31 price estimate if sales improve ahead of our forecast.

See our full analysis of Ann


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: ANN , ARO , JNY

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