Third-quarter profits slipped 26% at
thanks to weak sales, and the retailer lowered expectations for the holiday.
The clothing chain reported net income of $20 million, or 37 cents a share, down from $27.2 million, or 49 cents a share, in the same quarter last year. Excluding a one-time tax benefit from last year's results, its latest profit marks a decline from $22.7 million, or 41 cents a share.
Analysts on Wall Street had expected worse, predicting earnings of 36 cents a share, according to consensus estimates reported by Thomson First Call. But the company also forecast a fourth-quarter profit in a range that trails Wall Street's estimates.
The retailer guided fourth-quarter earnings between 35 and 37 cents a share, up from last year's 28 cents a share. Analysts were expecting earnings of 37 cents a share. Shares of Talbots were recently trading down 41 cents, or 1.5%, to $26.75.
Its total sales in the third quarter rose 3% to $426.3 million from last year's $413.4 million, but its same-store sales, a key retail metric gauging sales at stores open for at least a year, declined 2%.
"Following softness in our September trends, our store traffic and sales performance improved significantly in the latter part of October," Talbots said. "Our direct marketing business, including catalog and Internet, remained strong throughout the third quarter, increasing 11% over last year."