Shares of the Talbots, Inc. (NYSE:TLB) tumbled 22.65% to trade close at $8.81 after the retailer cut its outlook for the year & issued a disappointing fourth fiscal quarter outlook.
Shares of direct marketer of women’s apparel, accessories and shoes traded with the high volume of 29.13 million shares in its last trading session compared to the daily average volume of 2.34 million shares. Currently, the market capitalization of the stock stands at $619.94 million along with P/E of 63.71. The Stock has 52 week range of $6.81 - $17.79 and intraday trading range of $8.77 - $9.30.
For the third fiscal quarter, net income of $17 million or 24 cents per share has been posted compared with $15.5 million, or 28 cents per share, a year ago.
Excluding Special item, Adjusted EPS was $18.7 million or 27 cents per share, a penny better than expectations.
Sales went down by 3.2% to $299.1 million compared to $308.9 million in the same period last year versus the consensus estimate of $303.11 million. Same-store sales dropped -7.1% and the store sales decreased 5.2% to $242.1 million, compared to $255.4 million in the same period last year. Normally there are 200-300 basis points spread between same store sales and total sales which were wider in the third quarter due to the stronger DTC business and contribution of new stores (outlets).
Gross margins expanded 280 basis point to 42.7% primarily due to higher merchandise margin (+160 basis point) with strong IMU (+300 basis point) partially offset by a higher level of markdowns, with buying and occupancy also leveraging 120 basis point year over year due primarily to lower depreciation. Adjusted SG&A was 340 basis point higher than last year at 35.5%, which was primarily attributed to planned investments in marketing ($8 million) and re-instatement of certain employee based comp ($3 million), partially offset by expense controls. Overall, operating margins declined 60 basis point years over year to 7.2%.
Looking forward, the company said it expects a loss of 5 cents a share to a profit of 3 cents a share during its fourth quarter, significantly below the 14 cent consensus. For the full year, Talbots guided for EPS of 70 to 78 cents, down from an earlier view of 84 to 92 cents. Analysts were looking for full-year EPS of 88 cents.
Talbots sells classic apparel, shoes and accessories for women, men and children through over 570 retail stores in the U.S. and Canada, and through the Internet and catalogs. Talbots offers a distinctive collection of classic sportswear, casual wear, dresses, coats, sweaters, accessories and shoes, consisting almost exclusively of Talbots own branded merchandise in misses, petites, woman's and woman's petite sizes.
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