Talbots (TLB) Shares Plummet as Q1 Results Mixed, Q2 Outlook Disappoints

June 7, 2011 8:56 AM EDT
The Talbots, Inc. (NYSE: TLB) shares are tanking in pre-market action Tuesday following first-quarter results from the Hingham, MA-based retailer.

Sales in the quarter fell 6 percent from $320.66 to $301.31 million, missing the analyst consensus view of $306.26 million. Comparable-store sales fell 6.5 percent in the quarter.

Net income swung to a profit of $739 million, or 1 cent per share, from a loss of $4.368 billion during the same quarter last year. Adjusting for items like restructuring charges, impairment costs, merger costs, and other items, EPS came in at 8 cents, beating the consensus of 3 cents.

"Our first quarter performance reflects an inconsistent customer response to our merchandise assortments, a challenging competitive environment and high levels of promotional activity," CEO Trudy Sullivan commented. "Although we did see a positive customer reaction to our March brand moment, our February and April brand moments underperformed and sales in each month of the quarter decreased year over year."

Looking ahead, Talbots sees second-quarter sales and gross margins to be significantly below the same period last year. The outlook results from "high promotional and markdown activity as we work to clear slower moving goods."

Talbots shares are a staggering 29 percent lower ahead of the market open Tuesday.

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