Women's clothing retailer AnnTaylor Stores Corp reported a higher-than-expected quarterly profit on Friday, helped by improved merchandise at its LOFT stores and cost cuts.

But the company gave a tempered outlook for the back half of its fiscal year, and its shares fell nearly 4 percent.

On a net basis, the company posted a loss of $18.0 million, or 32 cents per share, for the second quarter ended on August 1, compared with a year-earlier profit of $29.3 million, or 50 cents per share.

Excluding restructuring charges, AnnTaylor had a profit of 6 cents per share, topping the analysts' average forecast of 2 cents, according to Reuters Estimates.

The company said in July that, excluding restructuring and impairment costs, it expected second-quarter earnings to be slightly above break-even on revenue of $470 million.

Sales came in at $470.2 million, down from $592.3 million a year earlier. Sales at stores open at least a year, or same-store sales, fell 22.5 percent, with a 38 percent drop at the Ann Taylor chain and a 15.4 percent decline at LOFT.

Like Chico's FAS Inc , Talbots Inc and other apparel chains targeting adult women, AnnTaylor has suffered in the recession as some customers reduce spending on themselves before cutting back on buying for their families.

What is more, the company's namesake chain has seen demand for suits and other professional clothes slow along with U.S. employment.

To offset weak sales, AnnTaylor is working on a three-year restructuring plan designed to shave $125 million a year in costs by cutting jobs, closing stores and reducing inventory.

The new inventory strategy, implemented in July, has both chains selling core basic items -- such as the perfect pencil skirt and perfect pants -- for an entire season and bringing in more fashionable pieces monthly to complement them.

The company said it expected a slight sequential improvement in sales and gross margins in the third quarter. Selling, general and administrative expenses will also be higher than in the second quarter, due to an extra $10 million of marketing investment for fall product launches.

For the rest of the year, the company expects margins to improve due to tight inventory management, improved merchandise at both chains and an expectation that the retail sector overall will see less deep promotions.

AnnTaylor expects sales to remain under pressure for the rest of the year, but it expects same-store sales, a key gauge of retail health, to be better in the second half of the year than in the first half.

Total square footage is expected to be decline 3.6 percent by the end of the year, as the company closes underperforming stores. It expects capital expenditures of $35 million for the year.

Shares of AnnTaylor were down 3.6 percent at $12.36 in trading before the market opened.

(Reporting by Martinne Geller; Editing by Lisa Von Ahn)