Talbots Announces March Sales; Comparable Store Sales Decrease 3.4%; Company Updates First Quarter Earnings Outlook
April 06 2006 - 7:30AM
Business Wire
The Talbots, Inc. (NYSE: TLB) today announced total Company sales
for fiscal March, the five weeks ended April 1, 2006, decreased 3%
to $195.4 million from $201.7 million for the five weeks ended
April 2, 2005. Comparable store sales decreased 3.4% for the month.
Year to date sales for the nine weeks ended April 1, 2006 decreased
3% to $286.8 million, compared to $294.7 million reported for the
nine weeks ended April 2, 2005. Comparable store sales decreased
4.2% for the nine-week period. Arnold B. Zetcher, Chairman,
President and Chief Executive Officer, commented, "While our March
comparable store sales trends were on or near plan during most of
the month, we saw a sharper than expected decline in customer
demand in the third and fourth weeks of the period. We believe this
was partially due to the shift of the Easter holiday to three weeks
later versus last year. In addition, a much weaker than anticipated
performance of our spring catalogs also impacted our retail sales,
as historically our catalogs have been our most important store
traffic drivers." "In order to build momentum in our business, we
will be making adjustments to our marketing program for April. As a
result, our forecast for the combined March/April period remains
consistent with our earlier expectation for flat to slightly
positive comparable store sales," continued Mr. Zetcher. "However,
given the additional markdowns resulting from the change in our
promotional strategy and the sizeable miss in March's catalog
sales, we are revising our expectations for first quarter earnings
per share to be in the range of $0.49 to $0.53, including
approximately $0.03 in estimated stock option expense. This
compares to our previously announced expectation of $0.61 to $0.65.
Our first quarter 2006 outlook for earnings per share excluding the
estimated stock option expense is in the range of $0.52 to $0.56,
versus last year's reported $0.63." "We believe the actions we are
taking to improve our business, including the impact of the new
merchandising initiatives that we established late last year, will
begin to more substantially benefit our performance in the second
quarter and beyond," concluded Mr. Zetcher. Talbots is a leading
national specialty retailer and cataloger of women's, children's
and men's classic apparel, shoes and accessories. The Company
currently operates 1,085 stores - 537 Talbots Misses stores,
including 20 Talbots Misses stores in Canada and three Talbots
Misses stores in the United Kingdom; 290 Talbots Petites stores,
including four Talbots Petites stores in Canada; 40 Talbots
Accessories & Shoes stores; 69 Talbots Kids stores; 112 Talbots
Woman stores, including three Talbots Woman stores in Canada; 12
Talbots Mens stores; two Talbots Collection stores; and 23 Talbots
Outlet stores. Its direct marketing segment currently expects to
circulate approximately 47 million catalogs worldwide in fiscal
2006. Talbots on-line shopping site is located at www.talbots.com.
For more detailed information, please visit our website at
www.talbots.com, or call (703) 736-7208 to listen to The Talbots,
Inc. monthly sales recording. The foregoing contains
forward-looking information within the meaning of The Private
Securities Litigation Reform Act of 1995. These statements may be
identified by such forward-looking terminology as "expect," "look,"
"believe," "anticipate," "outlook," "will," "would," "would yield,"
or similar statements or variations of such terms. All of the
"outlook" information (including future revenues, future comparable
sales, future earnings, future EPS, and other future financial
performance or operating measures) constitutes forward-looking
information. Our outlook and other forward-looking statements are
based on a series of expectations, assumptions, estimates and
projections about our Company which involve risks and uncertainty,
including assumptions and projections concerning store traffic,
levels of store sales including regular-price selling and markdown
selling, and customer preferences. All of our outlook information
and other forward-looking statements are as of the date of this
release only. The Company can give no assurance that such outlook
or expectations will prove to be correct and does not undertake to
update or revise any "outlook" information or any other
forward-looking statements to reflect actual results, changes in
assumptions, estimates or projections, or other circumstances
occurring after the date of this release, even if such results,
changes or circumstances make it clear that any projected results
will not be realized. Our forward-looking statements involve
substantial known and unknown risks and uncertainties as to future
events which may or may not occur, including the risk that the J.
Jill business will not be successfully integrated, the risk that
the cost savings and other synergies from the transaction may not
be fully realized or may take longer to realize than expected, the
risk that the acquisition will disrupt Talbots or J. Jill's core
business, transaction costs, the reaction of Talbots and J. Jill
customers and suppliers to the transaction, diversion of management
time on merger-related issues, effectiveness of the Company's brand
awareness and marketing programs, any different or any increased
negative trends in its regular-price or markdown selling,
effectiveness and profitability of new concept, effectiveness of
its Internet site, success of our expected marketing events in
driving sales, success of our catalogs in driving both our Direct
Marketing sales and in driving store traffic, acceptance of the
Company's fashions including its 2006 spring and early summer
fashions, the Company's ability to anticipate and successfully
respond to changing customer tastes and preferences and to produce
the appropriate balance of merchandise offerings, the Company's
ability to sell its merchandise at regular prices as well as its
ability to successfully execute its major sale events including the
timing and levels of markdowns and appropriate balance of available
markdown inventory, any difference between estimated and actual
stock option expense, retail economic conditions including consumer
spending, consumer confidence, impact on discretionary consumer
spending of significantly higher gasoline and energy costs and
higher interest rates, and the impact of a continued promotional
retail environment. In each case, actual results may differ
materially from such forward-looking information. Certain other
factors that may cause actual results to differ from such
forward-looking statements are included in the Company's periodic
reports filed with the Securities and Exchange Commission and
available on the Talbots website under "Investor Relations" and you
are urged to carefully consider all such factors.
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