Apr 13, 2010
Talbots posts profit, sees sales picking up
Apr 13, 2010
NEW YORK (Reuters) - Women's apparel retailer Talbots Inc (TLB.N) reported a quarterly profit from a year ago loss and forecast improved sales in the current year, sending its shares up 6 percent.
Talbots, which had been struggling with declining sales for several quarters and a heavy debt load, is revamping its styles to cater to younger women shoppers.
Last week, Talbots completed a financing deal that cut its ties with Aeon Co Ltd (8267.T), a major investor and Japan's second-largest retailer, and boosted its liquidity, enabling it to proceed with its plan to overhaul its business.
Talbots forecast that sales would perk up in the first quarter of its fiscal year 2010 by between 4 percent and 5 percent, continuing on the trend it saw in January, when sales at its stores open at least year rose in the high single digits. It sees full year sales up 3 percent to 5 percent.
Chief Executive Trudy Sullivan said in a statement that Talbots' efforts to refresh its brands, modernize its merchandise and streamline the company had set the stage for future growth.
Talbots reported net income of $4.1 million, or 7 cents per share in its fourth quarter, which ended January 30, 2010, compared to a loss of $361.5 million, or $6.75 a year earlier.
Sales at stores open at least a year fell 7.2 percent during the fourth quarter. But results were helped by an increase in sales of full-price merchandise, which rose 10 percent during the quarter.
Total sales fell 3.7 percent $315.9 million. Analysts on average had forecast sales of $314.4 million, according to Thomson Reuters I/B/E/S.
Much of Talbots improved fortunes have come from that spike in full price selling and from leaner inventory management, in contrast with the steep discounts the chain had to offer in previous quarters to get merchandise off its shelves.
The Hingham, Massachusetts-based retailer also got a boost from lower payroll and marketing expenses.
Shares rose to $15.25 in premarket trading from a close of $14.39.
(Reporting by Phil Wahba; Editing by Derek Caney, Dave Zimmerman)
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