Byline: Thomas J. Ryan / Vicki M. Young / Arnold J. Karr

NEW YORK — West was best, and East was least.
The lateness of Easter and some fashion question marks, such as dresses, hurt first-quarter sales and profits for many retailers, but unseasonably cool, wet weather was a special burden for retailers based in, or with a substantial number of units in, the northeastern third of the country.
Among four companies reporting results Wednesday, Talbots, posting a pacesetting 68.5 percent earnings increase for the period, appeared impervious to these considerations, while the challenges facing Goody’s Family Clothing, with its profits nearly cut in half, appeared to go well beyond them.
Ross Stores, logging a nearly 20 percent profit increase, noted that its concentration of stores in the West afforded it a significant advantage in the quarter. American Eagle Outfitters said its western stores excelled in the quarter and pointed to inclement weather and a “fashion miss” in dresses, a frequent complaint, to explain a mere 3 percent increase in profits.

Ross Stores
Ross Stores, the off-pricer based in Newark, Cal., reported earnings of $40.8 million, or 47 cents a share. This was 19.6 percent ahead of the prior-year quarter’s $34.2 million, or 37 cents, and a penny above Wall Street’s consensus. Sales advanced 15 percent to $633.4 million, from $550.8 million, with same-stores sales ahead 7 percent.
“Solid increases in sales were broad-based throughout most geographic regions and merchandise categories,” said Michael Balmuth, vice chairman and chief executive, in a statement.
Opportunistic buys both for current and future selling are improving offerings, and a poor spring for many department stores helped to increase surpluses in the market, he said. Balmuth described the promotional department-store climate as “rational” but expects markdowns to intensify come fall.
“They become a different animal in the fourth quarter,” he said.

Showing continuation of solid business trends, Talbots Inc. reported a 68 percent earnings increase for its first quarter and revised estimates of May comparable-store sales upward to “at least the mid-teens.”
For the quarter ended April 29, Talbots reported income of $32.7 million, or $1.04 a diluted share, versus $19.4 million, or 62 cents, in the comparable 1999 period. The latest period represents the eighth consecutive quarter of earnings growth for the specialty retailer. The result was in line with Wall Street’s consensus. Talbots previously said it would beat consensus estimates of 90 cents by 12 to 24 cents, and analysts had upped their expectations.
Arnold B. Zetcher, president and chief executive, said in a statement, “The continuation of exceptional regular-price selling, supported by strong inventory management, led to the achievement of a new company record for quarterly earnings per share of $1.04.”
Sales in the quarter increased 22.1 percent to $357.8 million from $293 million in the comparable 1999 period. Retail store sales were up 21 percent to $295.4 million from $243.5 million, while comps were up 17.3 percent. Catalog sales rose 26 percent to $62.4 million from $49.5 million.
A spokeswoman said comps were up 16.8 percent in the misses’ category, 16.3 percent in petites, 14.7 percent for shoes and accessories and 32. 3 percent in kids.
On Wednesday, analysts at Robertson Stephens in a research note upped their second-quarter earnings-per-share estimate to $2.54 from $2.50, compared with 1999 second-quarter earnings per share of $1.85.

Goody’s Family Clothing accelerated promotional activity to balance inventories during the fourth quarter, and the result was a steep drop in earnings.
For the quarter ended April 29, net income sagged 45.1 percent to $4.1 million, or 12 cents a diluted share, from $7.4 million, or 22 cents, during the first quarter of 1999.
The results verified the company’s announcement earlier this month that it not only would fail to match the 22 cents a share net income of the first quarter of 1999, but also fall short of an earlier first-quarter estimate of 14 cents.
As reported by the company earlier this month, sales were up 11 percent in the quarter to $278.3 million from $250.7 million in the 1999 period. Same-store sales dropped 1.4 percent.
Citing April sales “well below” Goody’s plans, Robert Goodfriend, chairman and chief executive, said in a statement, “In an effort to drive unit sales and reduce merchandise inventories to acceptable levels, we increased our promotional activities during the last two weeks of the quarter.”

American Eagle Outfitters
Profits at the Warrendale, Pa., youth-oriented casual chain nudged up 3 percent to $12.6 million, or 26 cents, from $12.2 million, or 25 cents. American Eagle warned on April 27 that earnings would range between 26 cents and 28 cents — short of estimates of 31 cents — as cold, wet weather in the East and a dismal dress business spelled trouble. Sales climbed 22.4 percent to $178 million from $145.4 million.
The 3.9 percent same-store gain in the quarter compared with hikes of 27.5 percent in 1999 and 52.4 percent in 1998. Women’s slid about 2 percent, but men’s rose 14 percent on a same-store basis.
“The first quarter was clearly challenging,” said George Kolber, vice chairman and chief operating officer.
“We remain confident about our brand and our position in the marketplace,” Kolber said, citing the potential to at least double the chain.
Nonetheless, officials said, based on a “very promotional general retail environment,” current sales trends and expected levels of inventory, they expected second-quarter gross margins to decline 240 basis points. Same-store sales should rise between 3 percent and 5 percent.
The guidance prompted Deutsche Banc.Alex Brown’s Marcia Aaron to cut her second-quarter estimate by 6 cents to 34 cents, which compares with 35 cents. However, Aaron said the chain was faring better than the competitor with which it is often compared, Abercrombie & Fitch, and she expects it will adjust to new trends calling for cleaner, dressier looks.
“They have a good management team and a strong brand, and I think they’ll be able to fix it,” said Aaron.