Retailers Stick to Script for Qtr.

Talbots warns of loss, stock falls.

The holiday season might have raised hopes only to later deflate them, but the general retail narrative — as read in fourth-quarter updates from Tiffany & Co., Sears Holdings Corp., The Talbots, Inc. and Phillips-Van Heusen Corp. — appears to have remained unchanged.

The extremes of luxe, at Tiffany, and mass, at Sears, foresaw better profits, while the struggles of the muddled middle were seen in Talbots’ projected loss, which sent its stock reeling. PVH illustrated the potential for growth through acquisition by playing up the impact of its purchase of Tommy Hilfiger in May.

It was Talbots’ warning that got the strongest reaction from investors, who pushed the stock down 17.4 percent to $6.25. Despite issuing stronger outlooks, shares of PVH fell 3 percent to $59.94 and Tiffany’s stock dipped 0.6 percent to $60.56. Sears was a standout with a 6.3 percent gain to $75.03, giving it the largest percentage increase of the 171 equities tracked by WWD.

The S&P Retail Index ticked down 0.1 percent, or 0.46 points, to 501.27 as the Dow Jones Industrial Average gained 0.3 percent, or 34.43 points, to 11,671.88.

■ Talbots, among a number of missy chains fighting for buoyancy, now expects an adjusted fourth-quarter loss of 15 cents to 19 cents a share, down from its previous projection, which ranged from a loss of 5 cents to a profit of 3 cents. Trudy F. Sullivan, president and chief executive officer, said the company would “continue to evolve our strategic approach to achieve our long-term objectives and remain keenly focused on merchandise initiatives to improve our assortment.”

■ Tiffany said November and December sales rose 11 percent and would lead to adjusted profits of $2.83 to $2.88 for the full year, moving the company’s previously projected range up 11 cents. “Healthy sales growth was seen across most product categories, with particular strength in Tiffany’s fine jewelry collections, diamond engagement rings and fashion gold jewelry, although with limited growth in silver jewelry sales,” said Michael Kowalski, chairman and ceo.

■ Sears’ Kmart division posted a 3.4 percent comparable-store sales gain for November and December, driven by the chain’s layaway program and strength in apparel and footwear, sporting goods, toys and home. Comps at Sears U.S. stores fell 5.3 percent for the two months with declines in the electronics, appliances and tools areas. Sears projected quarterly profits of $3.39 to $4.12 a diluted share, well ahead of the $3.09 analysts expected.

■ PVH said adjusted fourth-quarter profits would tally 82 cents versus the range of 76 cents to 81 cents previously projected.

With growth slow at best in the U.S., other fashion companies are expected to follow in the footsteps of Emanuel Chirico, chairman and ceo of PVH, who orchestrated the industry’s first big postrecession acquisition: the $3 billion deal to buy Hilfiger from Apax Partners.

In a presentation at the Cowen and Co. Ninth Annual Consumer Conference Tuesday, Chirico said the Hilfiger business exceeded plan and will add about $205 million to PVH’s operating income this year. That’s $25 million more than originally planned and the ceo said $20 million of that was added to the brand’s advertising budget.

Chirico expects the focus on advertising and branding to leave the company in good stead as cost pressures finally work their way through the supply chain and are, at least theoretically, passed on to the consumer.

“We’re seeing cost increases for the first half in that 5 percent range, very manageable,” he said. “We’ll raise price slightly and work with our retail partners and with our customers. Second half of the year, we’re seeing increases that are approaching 15 percent, I think everybody’s talking about the same type of increases in the industry.”

Chirico said it was still unclear how the consumer would react to rising prices, but he noted the pricing dynamic change means retailers will have tighter inventories.

Late on Tuesday, Zale Corp. said same-store sales in November and December rose 8.5 percent, with an 11.5 percent increase in November and a more modest 7.4 percent boost in December. Excluding currency fluctuation, comps were up 7.6 percent for the season.

Also on Tuesday, Anchor Blue, Inc. filed for Chapter 11 bankruptcy protection in federal court in Delaware and said it plans “to implement the orderly liquidation of all the company’s assets.” The plan to dissolve the chain confirms details in a previous story in WWD.