Ann Taylor (NYSE:ANN) may be poised to celebrate its 50th anniversary later this year, but the concept's still fresh, with most of its recent success, of course, owed to its younger offspring, Ann Taylor Loft. Last night's first-quarter earnings announcement gave a few more indications that the company's still working its way into many a wardrobe.

Ann Taylor's first-quarter earnings rocketed 78% to $31.8 million, or $0.65 per share. Net sales increased 23% to $433.2 million, while same-store sales garnered double-digit growth, rising 12%. With its financials, the company attached its cash flow statement -- a move Fools appreciate, as many companies neglect to include it until they file with the SEC.

The lower-priced Loft division has been the real story here for quite some time now; this quarter, the trend continued. These days, Loft represents 43% of sales, and for first-quarter 2004, its same-store sales jetted 25% higher.

While the big question has been what Ann Taylor stores could do to emulate the success of Loft, some of the initiatives -- including de-emphasizing suits and moving towards versatile separates that are suitable for any event -- seem to be panning out, with same-store sales improving compared to last year.

Ann Taylor's gross margins increased to 58.4% from 53.7% last year. One of the major reasons was a reduced dependence on promotions and sales. In fact, seven promotional events this time last year were pared down to three this year. You've got to like it when shoppers are driven to pay full price instead of waiting for the markdowns. It's a sign that the retailer is tuned in to its female clientele's taste for style and price.

With Loft's continued, maybe even increasing, popularity, where, oh where is Ann stealing customers from? According to the company's conference call (transcript courtesy of CCBN StreetEvents), market research has indicated that new customers are defecting from Gap (NYSE:GPS) and its offshoots, Banana Republic and Old Navy, as well as Limited Brands' (NYSE:LTD) Express concept.

Ann Taylor didn't up guidance for upcoming quarters, calling for an expectation of high single-digit same-stores growth. That's not too surprising. Ann Taylor's comparisons to the first quarter of last year were fairly easy, and the going will get steeper as this year progresses, based on the anniversary of last year's building momentum.

Investors weren't charmed; the stock was down nearly 2% in recent trading. Maybe they were expecting a little bit more excitement -- after all, Ann Taylor has upped guidance repeatedly over recent months. Also, while it was an attractive quarter, it didn't quite match its rather torrid fourth-quarter showing. The stock seems to be stuck in an awkward phase, 17% down from its 52-week high achieved in March. Though the company faces some tough comparisons coming up, after all the recent success, you've got to wonder if it's a good time to ogle Ann.

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Alyce Lomax does not own shares of any of the companies mentioned, but she's contributed to Loft's sales over the past several months.