TALBOTS BUCKS THE TIDE, POSTING STRONG GAINS FOR FIRST QUARTER
NEW YORK--The Talbots Inc. broke this year's industry-wide pattern of poor sales and earnings by posting solid gains on both fronts for the first quarter. Most specialty retailers--including Ann Taylor, The Limited and The Gap, have reported declines in earnings for the first quarter. Talbots, however, boosted by robust sales at its petites stores, said profits climbed 16.3 percent to $21.6 million, or 62 cents a share, matching Wall Street estimates. The company earned $18.6 million, or 53 cents, a year ago. Total sales grew 13.2 percent to $230.6 million from $203.6 million and same-store sales moved up 3.7 percent. On Thursday, the stock market plunged 81 points, but Talbots only fell 3/4 to 32 1/8 on The New York Stock Exchange. Jeffrey Edelman, analyst at C.J. Lawrence Duetsche Bank, attributed the strong quarter to good expense control. Edelman said that with inventories a little on the high side, the second quarter will be a bit tougher for the company. He expects Talbots to earn 22 cents in the second quarter versus 20 cents last year and maintains his estimate of $1.85 for the full year against $1.56 last year. Arnold Zetcher, president and chief executive officer of the 415-unit chain, said the first-quarter results were in line with the internal plan. He added that the strong performance "is especially gratifying" after last year's 17.2 percent same-store sales gain "and in light of a retailing environment that proved difficult for many specialty apparel retailers."
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