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Talbots Earnings Delayed After SEC Request

Trudy Sullivan, president and chief executive officer, told investors the request is part of the SEC’s standard comment letter process.

The Talbots Inc. delayed its quarterly and year-end report due to a comment letter request from the Securities and Exchange Commission, according to the firm’s conference call to Wall Street analysts Monday afternoon.

Trudy Sullivan, president and chief executive officer, told investors the request is part of the SEC’s standard comment letter process — a normal review — and that it was connected to the retailer’s 2010 annual report and “other periodic reports.”

“The accounting matters under discussion principally focused on our identification of reporting units and on our operating and reportable segment,” she said.

Sullivan emphasized that “no accounting changes were made as a result of this review process,” noting that the letter and related responses would be made publicly available by the SEC at some future date.

She also said the firm’s board “continues to evaluate a full range of strategic alternatives.” The board has not set a definitive timetable for completion of the evaluation, and Sullivan said at the outset of the call that she would not be taking any questions regarding the process. She also declined a request from an analyst for an update regarding a ceo search for her successor when she retires in June.

That didn’t leave much for a discussion regarding the quarterly results that were revealed on Thursday. The company posted a $53.3 million fourth-quarter loss for the period ended Jan. 28 on revenues of $289.4 million. For the year, the net loss was $111.9 million on sales of $1.14 billion.

Sullivan did note that the retailer was able to clear through excess inventory in the fourth quarter. For the first quarter so far, the customer has been receptive to color and pattern, both in the core stores and in the upscale outlet channel. The chain plans to open 20 new upscale outlet locations in 2012.

Michael Scarpa, treasurer and chief operating and financial officer, said consolidated comparable-store sales to date were down 5.4 percent. While comps were down, gross margins improved due to fewer promotions.

He also noted the company is utilizing a new inventory management tool that allows orders from the direct channel to be fulfilled from stores, whereas before direct orders were filled from the direct channel inventory log. That has resulted in “$8 million in direct fulfillment of orders from stores,” Scarpa said.

Shares of Talbots rose 7.1 percent to $2.86 before the call began, and then fell 1.5 percent to $2.82 at 5:50 p.m. Eastern time in after-market trading. The conference call began at 4:30 p.m. and ended before 5:15 p.m.