By and  on November 17, 2005

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.

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