NEW YORK — For specialty retailers Talbots, Charming Shoppes, Hot Topic and Zumiez, third-quarter results on Wednesday were a mixed bag.
Talbots beat Wall Street analysts' consensus by a penny, but profits dropped 26.5 percent while Hot Topic watched its earnings get cut in half. Charming Shoppes and Zumiez reported robust top- and bottom-line growth.
For the three months ended Oct. 29, Talbots Inc.'s net income fell to $20 million, or 37 cents a diluted share, from $27.2 million, or 49 cents, in the same year-ago quarter. Last year's earnings included a $4.5 million, or 8 cents a share, tax benefit. Excluding the onetime gain, net income was $22.7 million, or 41 cents.
Sales for the quarter rose 3.1 percent to $426.3 million from $413.4 million, which included a 1.9 percent increase in retail store sales to $362.6 million from $356 million. Same-store sales showed a 2 percent decline. At Talbots' direct-marketing operation, which include the catalogue and Internet businesses, sales gained 11 percent to $63.7 million from $57.4 million.
For the nine-month period, net income fell 8.3 percent to $73.4 million, or $1.35 a diluted share, from $80 million, or $1.41, last year, on sales that climbed 7.8 percent to $1.32 billion from $1.23 billion.
Dana Telsey, analyst at Bear, Stearns, wrote in an early morning update following Talbots' earnings announcement that "Talbots stumbled in [in the quarter] owing to fashion miscues, weak traffic in September and unseasonably warm weather in October."
Arnold B. Zetcher, chairman and chief executive officer, said in a Wednesday statement that, in order "to drive ongoing momentum in our business, we have significantly expanded our fourth-quarter marketing plan. Some of our new initiatives include a multitiered sweepstakes, a series of weekly in-store events and national newspaper advertising. This enhanced program has already begun and will continue through Christmas."
Zetcher guided fourth-quarter earnings per share of 35 cents to 37 cents, versus analysts' estimates for 37 cents. Fourth-quarter EPS last year was 28 cents. Shares of Hingham, Mass.-based Talbots closed up 4.2 percent to $28.30.
At women's plus-size retailer Charming Shoppes Inc., profits in the three months ended Oct. 29 rose 69.4 percent to $10.8 million, or 9 cents a diluted share, a penny ahead of analysts' estimates. Comparatively, the company earned $6.4 million, or 5 cents, in last year's third quarter.The Bensalem, Pa.-based company cited a 70 basis-point operating margin improvement, which was driven by a 120 basis-point expansion in gross margins, for its third-quarter earnings performance.
Net revenues rose 22.4 percent to $663.3 million from $541.8 million last year, while same-store sales in the company's retail store brands were up 3 percent.
For the nine months, Charming Shoppes, which operates the Lane Bryant, Fashion Bug and Catherines Plus Sizes chains, said earnings were up 34.4 percent at $80.2 million, or 61 cents, compared with $59.7 million, or 48 cents, a year ago. Revenues increased 12 percent to $1.95 billion.
Looking to the fourth quarter, the company confirmed prior expectations for EPS of 13 cents to 14 cents, which assumes a same-store sale increase of 2 to 4 percent. Analysts are expecting 14 cents in the fourth quarter. Shares of Charming Shoppes closed up 2.3 percent to $12.74.
After the close of the stock market, Hot Topic Inc. said third-quarter earnings declined by more than half to $5.9 million, or 13 cents a diluted share, compared with $12.4 million, or 26 cents, in the year-earlier period. Results in the most recent quarter included a charge of $1.5 million, or 2 cents, as a provision for potential liabilities from two lawsuits. Analysts had been expecting a profit of 13 cents. Net revenues rose 6.6 percent to $192.4 million, while same-store sales fell 6.2 percent.
In the nine months, City of Industry, Calif.-based Hot Topic earned $11.8 million, or 26 cents, versus $22.3 million, or 46 cents, last year. Revenues were $494.7 million, up 11.1 percent. Hot Topic shares had closed down 1.7 percent at $13.58.
Also after the close, action sports retailer Zumiez Inc. reported third-quarter profits that climbed 52.6 percent to $5.3 million, or 37 cents a diluted share, easily beating analysts' estimates for 34 cents. Comparatively, the company earned $3.5 million, or 27 cents, in the same quarter last year. Revenues were up 27.2 percent at $57.4 million, as same-store sales jumped 9.8 percent.
In the nine months, earnings at Everett, Wash.-based Zumiez doubled to $6.1 million, or 45 cents, from $3 million, or 23 cents, a year ago. Revenues rose 29.4 percent to $130.2 million. Shares of Zumiez had closed up 1.2 percent to $36.85.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast