NEW YORK — The Talbots Inc. on Wednesday posted third-quarter results that reflected a decline in income, due mostly to weakness during its mid-season sale event.
This story first appeared in the November 20, 2003 issue of WWD. Subscribe Today.
For the three months ended Nov. 1, income fell by 7 percent to $34.8 million, or 60 cents a diluted share, from $37.4 million, or 63 cents, in the year-ago quarter. Sales rose 1.6 percent to $408.1 million from $401.8 million. The specialty chain’s retail sales gained 2 percent to $345 million from $339.7 million. Comparable-store sales fell 4.5 percent. Catalogue sales increased 2 percent to $63.2 million from $62.1 million.
Arnold B. Zetcher, chairman, president and chief executive, said in a conference call to Wall Street that the retailer saw continued strength during the quarter in sales of regular-priced merchandise, which continued into early October. What hurt sales in the period was a decline in markdown selling.
According to Zetcher, “The mid-season sale didn’t catch fire.”
He explained that the sale featured merchandise from July and August, which this year had more summer fabrics than in the past. Instead of going to a third markdown — the feeling was that the lightweight summer fabrics still wouldn’t sell — the company moved the items to its outlet stores to make room for fourth- quarter deliveries.
To attract customers back to the stores, the company expanded its “best customer” promotion in several ways. It added seven days to the promotion period this year, and allowed a 15 percent discount offer on a full day’s purchase amount compared with just one individual transaction last year. The company said sweater sales, a key component of its fourth-quarter merchandise, are showing strength again.
Zetcher pointed out in a statement that even with weakness in the quarter, the company’s net income was 8.5 percent of total company sales, “still a very healthy level of profitability.”
For the nine months, income was down 10.5 percent to $82.7 million, or $1.43 a diluted share, from $92.4 million, or $1.52, last year. Sales rose 2.5 percent to $1.19 billion from $1.16 billion.