AnnTaylor Issues Weak 2008 Forecast

"We expect fiscal 2008 to be challenging particularly in the first half," said Kay Krill, company president and chief executive, in a statement. She said the company is scaling back new store growth and cutting costs in an effort to improve results.

It is also expanding its lower-priced Ann Taylor Factory business and introducing a Loft Outlet concept.

The women's apparel sector has been hit hard as consumers cut back on discretionary spending amid high food and gas prices and weak credit and housing markets.

AnnTaylor expects a fiscal first-quarter profit of 35 cents to 40 cents per share, while analysts polled by Thomson Financial expect a profit of 41 cents per share.

For the year, the company expects earnings of $1.80 to $1.90 per share, excluding restructuring costs, while analysts currently expect a higher profit of $1.95 per share.