Web Sales Could Lift Ann’s Shares Higher
Ann Inc. (NYSE: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 (NYSE:ARO), J.Crew Group (NYSE:JCG), Jones Apparel Group (NYSE: 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
- Why We Expect Ann’s EBITDA Margins To Decline No Further
- Ann Outlines Growth Areas Following Lackluster Q1 Results.
- Ascena Group To Buy Ann In A Cash And Stock Deal
- How Multichannel Retailing Is Pushing Ann Taylor’s Store Count Down
- Ann Taylor Reportedly In Talks With Golden Gate Capital For A Buyout
- Ann Rises On Better-Than-Expected Growth; Shows Merchandise And Cost Savings Improvement
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.