UBS Maintains a 'Neutral' on Talbots (TLB); A Long Road Still Ahead

UBS maintains a 'Neutral' on Talbots (NYSE: TLB) price target lowered from $2.75 to $2.00.

UBS analyst says, "While TLB showed sequential improvement in Q3, compares were easy (product timing issues LY) and promo were aggressive. Q4 outlook of quarter-to-date sales -5% and gross margins - 600-800 bps (well below the Street) is far from a stabilizing scenario. Inventories are better positioned than before, but a sizable spread remains (+13% vs sales -7%). There are a lot of moving parts to this story which keeps visibility low (expense cuts, liquidity, and new leadership by 2013)."

"Lowering Q4 est to $(0.53) from $(0.26), FY12 from $(0.87) to $(1.20) and FY13 from $(0.38) to $(0.85)."

For an analyst ratings summary and ratings history on Talbots click here. For more ratings news on Talbots click here.

Shares of Talbots closed at $1.62 yesterday.

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