TLB Talbots (The)

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.