Shares of women's apparel retailer AnnTaylor Stores Corp. (NYSE: ANN) have been taking a hit today following this morning's earnings release. Citing restructuring expenses and lower sales, AnnTaylor posted a loss of $6.7 million for its fourth-quarter.

For the quarter, the retailer said it swung to a loss of 11 cents per share, compared with a profit of 31 cents in the same period a year ago. Included in the company's earnings figures were 30 cents charge related to its restructuring program. Excluding that, AnnTaylor's earnings numbers would have come at 19 cents a share. Analyst, on average, expected the company to show quarterly earnings of 20 cents per share.

The women's apparel retailer also reported a quarterly revenue decline of 2% to $600.8 million, compared with $610.5 million in the previous year, which included an extra week. The company missed analysts' predictions for a higher revenue of $609 million, according to Thomson Financial.









Looking at same stores sales (sales at stores open at least 12 months), the quarter saw a drop of 3.2%. Weak demand for the company's clothing products resulted in declines of 78% at AnnTaylor and 0.5% at Loft.

With persistent fears over a possible recession the department store retailer had to face a pretty difficult 2007. The tumbling housing market, credit crush, and higher food and gas prices brought a slowdown in consumer spending; the effects of this are reflected in the company's earnings.

Looking ahead, AnnTaylor didn't show too much optimism and forecast a "challenging" first half of 2008. The company said it plans to take some cost-cutting measures to improve its performance. Thus, AnnTaylor forecast first-quarter earnings in a range of 35 cents and 40 cents per share, below analysts' expectations for a profit of 41 cents per share. Excluding restructuring costs, the retailer also predicted full-year earnings of $1.80 to $1.90 per share. Analysts, on average, expected the company to show full-year profit numbers of $1.95 per share.

After its weak earnings numbers, AnnTaylor's pessimistic outlook added more pressure to investors who already face fears over the weak market conditions. As a result, Wall Street has reacted by pushing the stock down over 8% to $21.93 this morning.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.