Talbots Plunges; Is Now the Time to Buy?
NEW YORK (
) --
Talbots
(TLB)
is plunging after it cut its full-year outlook and said it will continue to lower prices.
The women's apparel retailer now expects to earn between 70 cents and 78 cents a share, from prior forecast of 84 cents to 92 cents a share.
Sales in the fourth-quarter will be flat to down in the low single-digit percentage range.
"We believe the challenging and promotional environment will continue. To that end, we will stay nimble and have appropriately enhanced our promotional activity to best position ourselves for the remainder of this holiday season," Chief Executive Officer Trudy Sullivan said in a statement.
During its third-quarter, Talbots earned $17 million, or 24 cents a share, compared with $14.6 million, or 28 cents, in the year-ago period. The number of shares outstanding climbed 26% year-over-year.
Sales declined 3.2% to $299.1 million, while same-store sales plunged 7.1%.
Despite this disappointing earnings report, UBS analyst Roxanne Meyer said she would be a buyer of the stock on today's weakness. Shares are currently down 22.8% to $8.77 in early morning trading.
"While patience is required as the second half of 2010 turned out not to be inflection quarters, we continue to view the company as well positioned for a turnaround in 2011, given product improvement and given the company is still in very early innings of increased marketing, catalog prospecting, store-level product allocation and store renovations," Meyer wrote in a note.
--Written by Jeanine Poggi in New York.
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