ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3499319 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
7 Times Square, New York, NY | 10036 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Class | Outstanding as of May 14, 2012 | |
Common Stock, $.0068 par value | 48,785,441 |
Page No. | ||
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• | the Company's ability to anticipate and respond to changing client preferences and fashion trends and provide a balanced assortment of merchandise that satisfies client demands in a timely manner; |
• | the effectiveness of the Company's brand awareness and marketing programs, and its ability to maintain the value of its brands; |
• | the Company's ability to manage inventory levels and changes in merchandise mix; |
• | the Company's ability to successfully implement its business transformation initiatives and upgrade and maintain its information systems, including adequate system security controls, successful transitioning of certain information technology functions to third parties and the ability to operate in accordance with its business continuity plan in the event of a disruption; |
• | the performance and operation of the Company's websites and the risks associated with Internet sales; |
• | the Company's ability to successfully execute brand goals, objectives and new concepts; |
• | the impact of fluctuations in sourcing costs, in particular increases in the costs of raw materials, labor, fuel and transportation; |
• | the Company's reliance on key management and its ability to hire, retain and train qualified associates; |
• | the depressed levels of consumer spending and consumer confidence resulting from the worldwide economic downturn and financial crisis; |
• | the Company's ability to secure and protect trademarks and other intellectual property rights; |
• | the Company's reliance on foreign sources of production and the associated risks of doing business in foreign markets, including fluctuations in the value of the U.S. dollar against foreign currencies, the imposition of duties or other possible trade law or import restrictions, including legislation relating to import quotas, and financial or political instability in any of the countries in which the Company's merchandise is manufactured; |
• | the Company's reliance on third-party manufacturers and key vendors, including operational risks such as reduced production capacity, errors in complying with merchandise specifications, insufficient quality control and failure to meet production deadlines; |
• | the Company's ability to successfully manage store growth and optimize the productivity and profitability of its store portfolio; |
• | the impact of a privacy breach and the resulting effect on the Company's business and reputation; |
• | a significant change in the regulatory environment applicable to the Company's business and the Company's ability to comply with legal and regulatory requirements; |
• | the failure by independent manufacturers to comply with the Company's social compliance program requirements; |
• | the effect of competitive pressures from other retailers; |
• | the effect of continued uncertainty in the global economy on the Company's liquidity and capital resources; |
• | the Company's dependence on its Louisville distribution center and third-party distribution facilities and transportation companies, including any significant interruptions due to work stoppages, slowdowns or strikes by employees of the third-party vendors that it utilizes; |
• | the impact on the Company's stock price relating to the Company's level of sales and earnings growth; |
• | acts of war or terrorism in the United States or worldwide, and the potential impact of natural disasters and public health concerns, including severe infectious diseases, particularly on the Company's foreign sourcing offices and the manufacturing operations of the Company's vendors; |
• | the Company's dependence on shopping malls and other retail centers to attract customers; |
• | the impact of potential consolidation of commercial and retail landlords on the Company's ability to negotiate favorable rental terms; |
• | the effect of external economic factors on the Company's future funding obligations for its defined benefit pension plan; and |
• | the impact of climate change on the Company's business. |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(in thousands, except per share amounts) | |||||||
Net sales | $ | 560,411 | $ | 523,628 | |||
Cost of sales | 243,040 | 223,676 | |||||
Gross margin | 317,371 | 299,952 | |||||
Selling, general and administrative expenses | 272,018 | 254,033 | |||||
Operating income | 45,353 | 45,919 | |||||
Interest income | 555 | 235 | |||||
Interest expense | 335 | 280 | |||||
Income before income taxes | 45,573 | 45,874 | |||||
Income tax provision | 16,841 | 18,560 | |||||
Net income | $ | 28,732 | $ | 27,314 | |||
Earnings per share: | |||||||
Basic earnings per share | $ | 0.59 | $ | 0.52 | |||
Weighted average shares outstanding | 47,922 | 52,082 | |||||
Diluted earnings per share | $ | 0.58 | $ | 0.51 | |||
Weighted average shares outstanding, assuming dilution | 48,677 | 53,089 |
Quarter ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(in thousands) | |||||||
Net income | $ | 28,732 | $ | 27,314 | |||
Other comprehensive income, before tax: | |||||||
Amortization of net loss included in net periodic pension benefit cost | 175 | 24 | |||||
Other comprehensive income, before tax | 175 | 24 | |||||
Income tax expense/(benefit) on other comprehensive income items | 80 | (38 | ) | ||||
Other comprehensive income, net of tax | 95 | 62 | |||||
Comprehensive income | $ | 28,827 | $ | 27,376 |
April 28, 2012 | January 28, 2012 | April 30, 2011 | |||||||||
(in thousands, except share amounts) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 106,154 | $ | 150,208 | $ | 104,295 | |||||
Accounts receivable | 29,783 | 19,591 | 28,126 | ||||||||
Merchandise inventories | 243,516 | 213,447 | 223,628 | ||||||||
Refundable income taxes | 9,240 | 11,965 | 26,511 | ||||||||
Deferred income taxes | 31,891 | 30,999 | 26,163 | ||||||||
Prepaid expenses and other current assets | 63,123 | 49,107 | 58,169 | ||||||||
Total current assets | 483,707 | 475,317 | 466,892 | ||||||||
Property and equipment, net | 361,646 | 360,890 | 342,811 | ||||||||
Deferred income taxes | 23,579 | 39,134 | 26,950 | ||||||||
Other assets | 13,606 | 12,340 | 12,704 | ||||||||
Total assets | $ | 882,538 | $ | 887,681 | $ | 849,357 | |||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | 103,628 | $ | 94,157 | $ | 100,734 | |||||
Accrued salaries and bonus | 18,770 | 16,122 | 15,533 | ||||||||
Current portion of long-term performance compensation | 29,151 | 19,373 | 14,575 | ||||||||
Accrued tenancy | 41,951 | 41,435 | 42,523 | ||||||||
Gift certificates and merchandise credits redeemable | 43,259 | 50,750 | 41,264 | ||||||||
Accrued expenses and other current liabilities | 68,242 | 64,060 | 61,567 | ||||||||
Total current liabilities | 305,001 | 285,897 | 276,196 | ||||||||
Deferred lease costs | 158,866 | 159,435 | 163,439 | ||||||||
Deferred income taxes | 1,367 | 1,320 | 966 | ||||||||
Long-term performance compensation, less current portion | 17,902 | 42,122 | 23,296 | ||||||||
Other liabilities | 28,555 | 35,030 | 23,314 | ||||||||
Commitments and contingencies | |||||||||||
Stockholders’ equity | |||||||||||
Common stock, $.0068 par value; 200,000,000 shares authorized; 82,563,516 shares issued | 561 | 561 | 561 | ||||||||
Additional paid-in capital | 808,126 | 811,707 | 794,924 | ||||||||
Retained earnings | 602,990 | 574,257 | 515,005 | ||||||||
Accumulated other comprehensive loss | (5,223 | ) | (5,318 | ) | (2,316 | ) | |||||
Treasury stock, 33,790,075, 33,284,631 and 30,514,994 shares, respectively, at cost | (1,035,607 | ) | (1,017,330 | ) | (946,028 | ) | |||||
Total stockholders’ equity | 370,847 | 363,877 | 362,146 | ||||||||
Total liabilities and stockholders’ equity | $ | 882,538 | $ | 887,681 | $ | 849,357 |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(in thousands) | |||||||
Operating activities: | |||||||
Net income | $ | 28,732 | $ | 27,314 | |||
Adjustments to reconcile net income to net cash provided by/(used for) operating activities: | |||||||
Deferred income taxes | 14,630 | 6,410 | |||||
Depreciation and amortization | 23,302 | 23,026 | |||||
Loss on disposal and write-down of property and equipment | 387 | 212 | |||||
Stock-based compensation | 3,361 | 6,003 | |||||
Non-cash interest and other non-cash items | (150 | ) | (41 | ) | |||
Tax benefit from exercise/vesting of stock awards | 4,975 | 5,931 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (10,192 | ) | (10,595 | ) | |||
Merchandise inventories | (30,069 | ) | (30,003 | ) | |||
Prepaid expenses and other current assets | (14,016 | ) | (802 | ) | |||
Refundable income taxes | 2,725 | 120 | |||||
Other non-current assets and liabilities, net | (3,639 | ) | 4,037 | ||||
Accounts payable and accrued expenses | (10,941 | ) | (33,208 | ) | |||
Net cash provided by/(used for) operating activities | 9,105 | (1,596 | ) | ||||
Investing activities: | |||||||
Purchases of marketable securities | (1,314 | ) | (366 | ) | |||
Sales of marketable securities | 17 | — | |||||
Purchases of property and equipment | (27,936 | ) | (27,629 | ) | |||
Net cash used for investing activities | (29,233 | ) | (27,995 | ) | |||
Financing activities: | |||||||
Proceeds from the issuance of common stock pursuant to the Associate Discount Stock Purchase Plan | 723 | 780 | |||||
Proceeds from exercise of stock options | 9,493 | 5,198 | |||||
Excess tax benefits from stock-based compensation | 5,353 | 6,818 | |||||
Repurchases of common and restricted stock | (39,044 | ) | (104,897 | ) | |||
Repayments of fixed asset financing and capital lease obligations | (360 | ) | (456 | ) | |||
Change in trade payable program obligation, net | (91 | ) | (201 | ) | |||
Net cash used for financing activities | (23,926 | ) | (92,758 | ) | |||
Net decrease in cash | (44,054 | ) | (122,349 | ) | |||
Cash and cash equivalents, beginning of period | 150,208 | 226,644 | |||||
Cash and cash equivalents, end of period | $ | 106,154 | $ | 104,295 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for interest | $ | 260 | $ | 221 | |||
Cash paid during the period for income taxes | $ | 10,162 | $ | 7,405 | |||
Accrual for purchases of property and equipment | $ | 14,507 | $ | 17,972 |
1. | Basis of Presentation |
2. | Recent Accounting Pronouncements |
3. | Fair Value Measurements |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
3. | Fair Value Measurements (Continued) |
April 28, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | ||||||||||||||||
Non-qualified deferred compensation plan assets (1) | $ | 5,906 | $ | 1,655 | $ | 4,251 | $ | — | ||||||||
Total assets | $ | 5,906 | $ | 1,655 | $ | 4,251 | $ | — | ||||||||
January 28, 2012 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | ||||||||||||||||
Non-qualified deferred compensation plan assets (1) | $ | 4,149 | $ | 1,309 | $ | 2,840 | $ | — | ||||||||
Total assets | $ | 4,149 | $ | 1,309 | $ | 2,840 | $ | — |
April 30, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(in thousands) | ||||||||||||||||
Non-qualified deferred compensation plan assets (1) | $ | 3,313 | $ | 397 | $ | 2,916 | $ | — | ||||||||
Total assets | $ | 3,313 | $ | 397 | $ | 2,916 | $ | — |
(1) | The Company maintains a self-directed, non-qualified deferred compensation plan structured as a rabbi trust for certain executives at the vice-president level and above. The investment assets of the rabbi trust are valued based on quoted market prices. |
4. | Net Income Per Share |
Quarter Ended | |||||||||||||||||||||
April 28, 2012 | April 30, 2011 | ||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
Basic Earnings per Share: | Net Income | Shares | Per Share Amount | Net Income | Shares | Per Share Amount | |||||||||||||||
Net income | $ | 28,732 | $ | 27,314 | |||||||||||||||||
Less net income associated with participating securities | 438 | 460 | |||||||||||||||||||
Basic earnings per share | $ | 28,294 | 47,922 | $ | 0.59 | $ | 26,854 | 52,082 | $ | 0.52 | |||||||||||
Diluted Earnings per Share: | |||||||||||||||||||||
Net income | $ | 28,732 | $ | 27,314 | |||||||||||||||||
Less net income associated with participating securities | 431 | 451 | |||||||||||||||||||
Effect of dilutive securities | 755 | 1,007 | |||||||||||||||||||
Diluted earnings per share | $ | 28,301 | 48,677 | $ | 0.58 | $ | 26,863 | 53,089 | $ | 0.51 |
5. | Equity and Incentive Compensation Plans |
Shares | Weighted Average Exercise Price | |||||
Options outstanding at January 28, 2012 | 4,498,817 | $ | 22.18 | |||
Granted (1) | 514,750 | 27.85 | ||||
Exercised | (714,381 | ) | 13.29 | |||
Forfeited or expired | (165,760 | ) | 26.27 | |||
Options outstanding at April 28, 2012 | 4,133,426 | $ | 24.26 | |||
Vested and exercisable at April 28, 2012 | 2,792,183 | $ | 25.20 | |||
Options expected to vest in the future as of April 28, 2012 | 974,281 | $ | 25.31 |
(1) | Options vest annually over a three-year period, and expire ten years after the grant date. |
5. | Equity and Incentive Compensation Plans (Continued) |
Quarter Ended | |||||
April 28, 2012 | April 30, 2011 | ||||
Expected volatility | 54.6 | % | 57.1 | % | |
Risk-free interest rate | 0.9 | % | 1.8 | % | |
Expected life (years) | 4.40 | 4.54 | |||
Dividend yield | — | — |
Time - Based | Performance - Based | ||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||
Restricted stock awards at January 28, 2012 | 523,096 | $ | 18.40 | 247,003 | $ | 17.13 | |||||||||||
Granted | 261,375 | (1) | 27.85 | 146,500 | (2) | 27.85 | |||||||||||
Vested | (283,199 | ) | 12.37 | (81,364 | ) | 10.44 | |||||||||||
Forfeited | (27,087 | ) | 25.12 | (94,467 | ) | 14.90 | |||||||||||
Restricted stock awards at April 28, 2012 | 474,185 | $ | 26.83 | 217,672 | $ | 27.81 |
(1) | Of this amount, 257,375 shares vest equally in each of March 2013, 2014 and 2015 and 4,000 shares vest equally in each of March 2013 and 2014. |
(2) | These shares vest over a three-year period based on achievement of performance targets set bi-annually for each tranche of the grant. Based on Company performance, grantees may earn 50% to 150% of the shares granted with respect to each tranche. If the Company does not achieve the minimum threshold goal associated with such shares, grantees will not earn any shares with respect to that tranche. |
Time - Based | Performance - Based | ||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||
Restricted unit awards at January 28, 2012 | 175,353 | $ | 19.58 | 98,670 | $ | 19.58 | |||||||||||
Vested | (86,165 | ) | 19.58 | (27,871 | ) | 19.58 | |||||||||||
Forfeited | (7,836 | ) | 19.58 | (21,462 | ) | 19.58 | |||||||||||
Restricted unit awards at April 28, 2012 | 81,352 | $ | 19.58 | 49,337 | $ | 19.58 |
5. | Equity and Incentive Compensation Plans (Continued) |
6. | Debt and Other Financing Arrangements |
7. | Employee Benefits |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(in thousands) | |||||||
Net periodic pension cost: | |||||||
Interest cost | $ | 437 | $ | 416 | |||
Expected return on plan assets | (377 | ) | (428 | ) | |||
Amortization of actuarial loss | 175 | 24 | |||||
Net periodic pension cost | $ | 235 | $ | 12 |
8. | Securities Repurchase Program |
9. | Legal Proceedings |
• | Comparable sales – Comparable sales provide a measure of existing store sales performance. A store is included in comparable sales in its thirteenth month of operation. A store with a square footage change of greater than 15% is treated as a new store for the first year following its reopening. Sales from our Online Stores are also included in comparable sales. In a fiscal year with 53 weeks, sales in the last week of that year are excluded from comparable sales. |
• | Gross margin – Gross margin measures our ability to control the direct costs of merchandise sold during the period. Gross margin is the difference between net sales and cost of sales, which is comprised of direct inventory costs for merchandise sold, including all costs to transport merchandise from third-party suppliers to our distribution center. Buying and occupancy costs are excluded from cost of sales. |
• | Operating income – Because retailers do not uniformly record supply chain costs as a component of cost of sales or selling, general and administrative expenses, operating income allows us to benchmark our performance relative to other retailers. Operating income represents earnings before interest and income taxes and measures our earnings power from ongoing operations. |
• | Store productivity – Store productivity, including sales per square foot, average unit retail price ("AUR"), units per transaction ("UPT"), dollars per transaction ("DPT"), traffic and conversion, is evaluated by management in assessing our operating performance. |
• | Inventory turnover – Inventory turnover measures our ability to sell our merchandise and how many times it is replaced over time. This ratio is important in determining the need for markdowns, planning future inventory levels and assessing client response to our merchandise. |
• | Quality of merchandise offerings – To monitor and maintain client acceptance of our merchandise offerings, we monitor sell-through levels, inventory turnover, gross margin, returns and markdown rates at a class and style level. This analysis helps identify merchandise issues at an early date and helps us plan future product development and buying. |
Quarter Ended | |||||
April 28, 2012 | April 30, 2011 | ||||
Net sales | 100.0 | % | 100.0 | % | |
Cost of sales | 43.4 | % | 42.7 | % | |
Gross margin | 56.6 | % | 57.3 | % | |
Selling, general and administrative expenses | 48.5 | % | 48.5 | % | |
Operating income | 8.1 | % | 8.8 | % | |
Interest income | 0.1 | % | — | % | |
Interest expense | 0.1 | % | 0.1 | % | |
Income before income taxes | 8.1 | % | 8.7 | % | |
Income tax provision | 3.0 | % | 3.5 | % | |
Net income | 5.1 | % | 5.2 | % |
Quarter Ended | |||||
April 28, 2012 | April 30, 2011 | ||||
increase | |||||
Net sales | 7.0 | % | 10.0 | % | |
Operating income | (1.2 | )% | 18.6 | % | |
Net income | 5.2 | % | 20.8 | % |
Quarter Ended | |||||||||||||
April 28, 2012 | April 30, 2011 | ||||||||||||
Sales | Comp % | Sales | Comp % | ||||||||||
Sales and Comps | ($ in thousands) | ||||||||||||
Ann Taylor brand | |||||||||||||
Ann Taylor Stores | $ | 109,597 | (15.5 | )% | $ | 125,379 | 13.7 | % | |||||
Ann Taylor e-commerce | 32,614 | 9.6 | % | 29,461 | 43.1 | % | |||||||
Subtotal | 142,211 | (10.3 | )% | 154,840 | 18.3 | % | |||||||
Ann Taylor Factory | 70,165 | 0.7 | % | 68,035 | 9.2 | % | |||||||
Total Ann Taylor brand | $ | 212,376 | (6.9 | )% | $ | 222,875 | 15.3 | % | |||||
LOFT brand | |||||||||||||
LOFT Stores | $ | 262,388 | 10.0 | % | $ | 239,099 | (1.0 | )% | |||||
LOFT e-commerce | 36,486 | 29.1 | % | 28,293 | 32.8 | % | |||||||
Subtotal | 298,874 | 12.0 | % | 267,392 | 1.7 | % | |||||||
LOFT Outlet | 49,161 | 6.1 | % | 33,361 | 15.7 | % | |||||||
Total LOFT brand | $ | 348,035 | 11.3 | % | $ | 300,753 | 2.4 | % | |||||
Total Company | $ | 560,411 | 3.8 | % | $ | 523,628 | 7.8 | % |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
Sales Related Metrics | |||||||
Average Dollars Per Transaction ("DPT") | |||||||
Ann Taylor brand | $ | 83.03 | $ | 89.40 | |||
LOFT brand | 67.86 | 66.93 | |||||
Average Units Per Transaction ("UPT") | |||||||
Ann Taylor brand | 2.35 | 2.45 | |||||
LOFT brand | 2.68 | 2.58 | |||||
Average Unit Retail ("AUR") | |||||||
Ann Taylor brand | $ | 35.33 | $ | 36.49 | |||
LOFT brand | 25.32 | 25.94 | |||||
Net Sales Per Average Gross Square Foot (1) | |||||||
Ann Taylor Stores | $ | 76 | $ | 86 | |||
Ann Taylor Factory | 102 | 101 | |||||
LOFT Stores | 91 | 82 | |||||
LOFT Outlet | 95 | 101 |
(1) | Net sales per average gross square foot is determined by dividing net sales for the period by the average monthly gross square footage for the period. Unless otherwise indicated, references herein to square feet are to gross square feet, rather than net selling space. Sales from our Online Stores are excluded from the net sales per average gross square foot calculations. |
Quarter Ended | |||||||||||
April 28, 2012 | April 30, 2011 | ||||||||||
Stores | Square Feet | Stores | Square Feet | ||||||||
(square feet in thousands) | |||||||||||
Stores and Square Footage | |||||||||||
Ann Taylor brand | |||||||||||
Ann Taylor Stores | 274 | 1,416 | 266 | 1,450 | |||||||
Ann Taylor Factory | 99 | 691 | 96 | 690 | |||||||
Total Ann Taylor brand | 373 | 2,107 | 362 | 2,140 | |||||||
LOFT brand | |||||||||||
LOFT Stores | 500 | 2,898 | 500 | 2,917 | |||||||
LOFT Outlet | 74 | 519 | 61 | 437 | |||||||
Total LOFT brand | 574 | 3,417 | 561 | 3,354 | |||||||
Total Company | 947 | 5,524 | 923 | 5,494 | |||||||
Number Of: | |||||||||||
Stores open at beginning of period | 953 | 5,584 | 896 | 5,284 | |||||||
New stores (1) | 7 | 36 | 32 | 244 | |||||||
Downsized stores (2) | — | (25 | ) | — | (4 | ) | |||||
Closed stores | (13 | ) | (71 | ) | (5 | ) | (30 | ) | |||
Stores open at end of period | 947 | 5,524 | 923 | 5,494 |
(1) | During the quarter ended April 28, 2012, we opened two new Ann Taylor stores, four new LOFT stores, and one new LOFT Outlet store. During the quarter ended April 30, 2011, we opened four new Ann Taylor Factory stores, three new LOFT stores and 25 new LOFT Outlet stores. |
(2) | During the quarter ended April 28, 2012, we downsized three Ann Taylor stores, three Ann Taylor Factory stores, one LOFT store and one LOFT Outlet store . During the quarter ended April 30, 2011, we downsized one Ann Taylor store. |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(dollars in thousands) | |||||||
Cost of sales | $ | 243,040 | $ | 223,676 | |||
Gross margin | $ | 317,371 | $ | 299,952 | |||
Percentage of net sales | 56.6 | % | 57.3 | % |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(dollars in thousands) | |||||||
Selling, general and administrative expenses | $ | 272,018 | $ | 254,033 | |||
Percentage of net sales | 48.5 | % | 48.5 | % |
Quarter Ended | |||||||
April 28, 2012 | April 30, 2011 | ||||||
(dollars in thousands) | |||||||
Income tax provision | $ | 16,841 | $ | 18,560 | |||
Effective income tax rate | 37.0 | % | 40.5 | % |
April 28, 2012 | January 28, 2012 | April 30, 2011 | |||||||||
(dollars in thousands) | |||||||||||
Working capital | $ | 178,706 | $ | 189,420 | $ | 190,696 | |||||
Current ratio | 1.59:1 | 1.66:1 | 1.69:1 |
Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under Publicly Announced Program | ||||||||||
(in thousands) | |||||||||||||
January 29, 2012 to February 25, 2012 | 931,737 | $ | 23.63 | 930,700 | $ | 162,095 | |||||||
February 26, 2012 to March 31, 2012 | 674,025 | 25.25 | 530,012 | 149,084 | |||||||||
April 1, 2012 to April 28, 2012 | 544 | 28.35 | — | 149,084 | |||||||||
1,606,306 | 1,460,712 |
(1) | Includes 145,594 shares of restricted stock purchased in connection with employee tax withholding obligations under the employee equity compensation plans, which are not purchases under the Company’s publicly announced program. |
(2) | On March 8, 2011, our Board of Directors approved a $200 million expansion of our existing securities repurchase program (the “Repurchase Program”) to a total of $600 million. The Repurchase Program will expire when we have repurchased all securities authorized for repurchase thereunder, unless terminated earlier by our Board of Directors. |
Exhibit Number | Description |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1° | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS‡ | XBRL Instance |
101.SCH‡ | XBRL Taxonomy Extension Schema |
101.CAL‡ | XBRL Taxonomy Extension Calculation |
101.DEF‡ | XBRL Taxonomy Extension Definition |
101.LAB‡ | XBRL Taxonomy Extension Labels |
101.PRE‡ | XBRL Taxonomy Extension Presentation |
* | Filed electronically herewith. |
° | Furnished electronically herewith. |
‡ | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. |
ANN INC. | |||
Date: | May 18, 2012 | By: | /s/ Kay Krill |
Kay Krill | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) |
Date: | May 18, 2012 | By: | /s/ Michael J Nicholson |
Michael J. Nicholson | |||
Executive Vice President, | |||
Chief Financial Officer and Treasurer | |||
(Principal Financial Officer) |
Exhibit Number | Description | |
31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1° | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS‡ | XBRL Instance | |
101.SCH‡ | XBRL Taxonomy Extension Schema | |
101.CAL‡ | XBRL Taxonomy Extension Calculation | |
101.DEF‡ | XBRL Taxonomy Extension Definition | |
101.LAB‡ | XBRL Taxonomy Extension Labels | |
101.PRE‡ | XBRL Taxonomy Extension Presentation |
* | Filed electronically herewith. |
° | Furnished electronically herewith. |
‡ | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. |
1. | I have reviewed this quarterly report on Form 10-Q of ANN INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q of ANN INC.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Securities Repurchase Program - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | |||
---|---|---|---|---|
Apr. 28, 2012
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Apr. 30, 2011
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Mar. 08, 2011
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May 18, 2012
Repurchase of Equity
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchased additional approved amount | $ 200 | |||
Total authorized under the Securities Repurchase Program | 600 | |||
Repurchases of Common stock, shares | 1,460,712 | 4,197,097 | ||
Repurchases of Common stock, value | 35.0 | 100.0 | ||
Total available for share repurchases under the Securities Repurchase Program | $ 149.1 | $ 149.1 |
Fair Value Measurements
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Apr. 28, 2012
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Notes to Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements ASC 820-10, Fair Value Measurements and Disclosures, establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
The following tables segregate all financial assets and liabilities of the Company that are measured at fair value on a recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine fair value at the measurement date:
At April 28, 2012, the Company believes that the carrying value of cash and cash equivalents, receivables and payables approximates fair value, due to the short maturity of these financial instruments. |