Shares of The Talbots Inc. pulled back nearly 23 percent Tuesday despite a 17.1 percent jump in third-quarter profits after the company said fourth-quarter sales could decline given the “challenging and promotional environment.” For the three months ended Oct. 30, net income was $17 million, or 24 cents a diluted share, from $14.6 million, or 26 cents, last year. Adjusted EPS of 27 cents was 1 cent better than analysts’ consensus estimates. Sales dipped 3.2 percent to $299.1 million from $308.9 million. Store sales fell 5.2 percent to $242.1 million, while comparable-store sales dropped 7.1 percent. Early holiday receipts and disappointing sales boosted year-on-year inventories 11.3 percent to $184.7 million. The company provided fourth-quarter guidance for adjusted EPS from continuing operations ranging from a loss of 5 cents to earnings of 3 cents. Last year’s adjusted EPS from continuing operations was 13 cents. Talbots also said that, given current trends, sales will be in the range of flat to down in the low-single digits versus the comparable 2009 quarter. UBS analyst Roxanne Meyer said in a research note Tuesday that while investors would not be happy with the comp decline and fourth-quarter outlook, “We continue to view the company as well positioned for a turnaround in 2011....We’d be buyers on stock weakness today.” Shares ended the day at $8.81, down $2.58, or 22.7 percent, by far the largest percentage decline among the 172 issues tracked by WWD. Trudy F. Sullivan, president and chief executive officer, told Wall Street analysts the upscale outlet business, which expanded to 27 stores with the addition of five units, was a highlight of the quarter. She said she was pleased with the concept’s performance, including average sales productivity of $500 a square foot. However, she noted, “We expect the operating environment to remain challenging and highly promotional....We’ve made appropriate adjustments to our promotional activities to respond to the current retail trend. We need to remain nimble to effectively manage our inventory and drive sales.” For the 39 weeks, income was $13.6 million, or 19 cents a diluted share, against a loss of $33.5 million, or 62 cents, last year. Sales inched up 0.1 percent to $920.5 million from $919.7 million. Comps fell 2.1 percent. The S&P Retail Index, which is trading near its three-year high, slipped 0.1 percent, or 0.73 points, to 507.35 Tuesday as the Dow Jones Industrial Average gave up 3.03 points to close at 11,359.16. Investors are still fretting over the debt bailout for Ireland and are trying to square Friday’s weaker-than-expected employment report with stronger holiday sales and other signs that the economy is recovering. Among the retail decliners in addition to Talbots were AnnTaylor Stores Corp., down 2.3 percent to $26.32; J.C. Penney Co. Inc., 1.5 percent to $33.92, and Limited Brands Inc., 1.2 percent to $31.43.
To celebrate Pride 2018, @themarcjacobs released the #GratefulNotHateful campaign, a social media initiative aimed at extending Pride beyond the parade. Inspired by Jacobs’ everyday outlook, the campaign features Jacobs along with a group of models and social media stars who are members and supporters of the LGBT community, all seen wearing @marcbeauty’s Highliner Gel Eye Crayons in colors of the rainbow. Head to our Instagram stories to see close-ups of the liner. #wwdbeauty
Virgil Abloh’s dad Nee and Don Crawley, cofounder of RSVP Gallery, were some of the hometown crew at the Chicago-born designer’s debut show for Louis Vuitton. (📸: @jdiderich ) #wwdmens #louisvuitton #virgilabloh
About last night: @marycharteris and @adwoaaboah hit up Hyde Park for the Serpentine Galleries’ annual summer party held in partnership with @chanelofficial. Head to WWD.com to see more photos. #wwdfashion
“This is Paris, my first show. I’m all about democracy. If some kid shows up, flew from New Jersey to just be around, let’s get him a seat.” — @virgilabloh tells WWD’s @jdiderich ahead of his first show for @louisvuitton men’s. (📸: @alfredo_piola ) #wwdmens #virgilabloh #louisvuitton
“Kate Spade was a true fashion icon who brought joy to the lives of women around the world, and inspired women to live life to the fullest. We are dedicated to carrying on her legacy,” said Anna Bakst, brand president and chief executive officer of @katespadeny. The Kate Spade Foundation announced that it will be donating $1 million to suicide prevention and mental health awareness in tribute to the recent death of Kate Spade. Read more on WWD.com. #wwdnews (📷: @chinseephoto)
A first look at @virgilabloh’s sneakers for @louisvuitton. Abloh spoke to WWD about his debut collection for Louis Vuitton, creating @kendalljenner’s #metgala outfit and redefining the heritage brand. Read the full story on WWD.com. #wwdfashion 📷: @alfredo_piola)
The world’s largest producer of denim @iskodenim is sharing the strategy behind its product development process. Read our full interview with ISKO’s product development manager Baris Ozden on the company’s extensive research practices, upcoming denim trends and the latest material innovations on WWD.com. #iskodenim