Talbots Operating Profit Tops View, Net Income Tumbles
Hingham, Mass. The Talbots Inc. posted higher-than-expected quarterly operating profit on Wednesday and affirmed its full-year forecast. The retailer said better inventory management, expense controls and monthly markdowns contributed to a “dramatic improvement” in its merchandising gross margin.
Talbot’s net income for the period ended May 3, dropped 69%. Earnings slipped to $1.6 million, compared with $5.2 million in the prior year.
Excluding a loss related to the closing of its children’s, men’s and British businesses and restructuring charges, Talbots said profit from continuing core operations was 21 cents per share in the first quarter, way ahead of analysts’ average forecast of 11 cents, according to Reuters Estimates.
Total company sales for the quarter were $542 million. By brand, retail store sales were $363 million for Talbots compared to $387 million last year, and $71 million for J. Jill compared to $81 million last year.
Same-store sales declined 9.8% for the quarter. By brand, comparable store sales for Talbots and J. Jill decreased 7.4% and 20.2% respectively.
“During the quarter, we focused on the strategic initiatives we put in place to better manage our inventories, control expenses, streamline our operations and innovate our marketing/promotional programs,” said Trudy F. Sullivan, Talbots president and CEO. “It was a solid quarter and we are encouraged with our progress, particularly in the Talbots brand, where we have seen a dramatic improvement in our merchandising gross margin.”
Stobb named investor relations head at Goodyear
AKRON, Ohio The Goodyear Tire & Rubber Co. announced that Patrick Stobb has joined the company as director of investor relations. Stobb will report to Darren Wells, Goodyear’s senior vp of finance and strategy.
Prior to joining Goodyear, Stobb was director of investor relations for TRW Automotive Holdings since 2003. He also held a variety of investor relations and finance positions with the Visteon from 2000 to 2003 and the Ford Motor Co. from 1997 to 2000.
Mervyns to open new stores, launch Web site
HAYWARD, Calif. Mervyns said it plans to open five new stores in its core markets in 2009. This brings the total number of new Mervyns stores to 17 since the company was acquired by its private equity owners three years ago, and reflects its commitment to maintaining a dominant real estate position in California and the Southwest. Concurrently, Mervyns reported it has engaged DJM Realty, LLC, one of the nation’s leading real estate advisory firms, to sell 5-10 underperforming, but high real-estate-value, stores. The real estate portfolio transition is expected to generate $25 to $50 million in cash to fund operations and new growth initiatives.
The company also announced it will launch a fully integrated e-commerce Web site in the fourth quarter of 2008. Mervyns said the e-commerce Web site presents a new growth vehicle and multi-channel opportunity for existing and new customers nationwide, and forecasts that the online platform could quickly grow into a $50 million business. Mervyns will partner with a nationally recognized provider of turnkey order entry and fulfillment services in launching its Web site.
Ceo John Goodman commented, “We have a plan that centers around our consumer and her needs, and we are putting the capital and people resources behind it to not only overcome the current difficult retail climate, but to gain market share and reinvigorate the Mervyns brand.”