June same-store sales at Ann Taylor (NYSE:ANN) fell a whopping 8.4%. I suppose management deserves some kudos for its candor. Rather than blaming weather or the calendar, it placed the culpability squarely on its merchandise assortment. Apparently its neutral-colored blouses and skirts were out of style, in favor of more colorful displays.

Despite the setback, management remains confident it can earn $2.15-$2.25 a share. I don't share the same enthusiasm. First, when sales are that disappointing, it leaves the unsold goods sitting on the shelves. The problem is retailers only have a limited amount of space. So in order to make room for the new goods, it must get rid of the old. This is usually done by having clearance sales. How else do you sell clothes that no one wanted in the first place? Outlet stores, here we come! So, inevitably, lower prices means lower margins going forward. I'm betting that the company has discounted its goods.

Ann Taylor did cite the ability to implement cost efficiencies at its stores. Share buybacks are also expected to boost earnings per share. But, while meeting an earnings target is nice, and efficient operations are also important, I'd rather see sales growth as well.

Sales at its LOFT division, which sells more casual and moderately priced apparel, were just abysmal, falling 13.9%. Same-store sales at its namesake Ann Taylor stores declined 3.3%. Presumably, its higher-end chain would be more immune to the high gas prices and housing slowdown which seems to have affected other chains, particularly those catering to consumers of more moderate means. Still, TJX Companies (NYSE:TJX) reported a solid 5% increase in SSS, while, at the high end, Nordstrom's (NYSE:JWN) had a SSS rise of 2%. So it's also a matter of execution.

Both Ann Taylor's LOFT division and its Ann Taylor stores appear to have stumbled. Given the chance for discounting and disappointing sales going forward, investors may wish to shop elsewhere.

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Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. He doesn't have any positions in the companies mentioned.