US: Talbots reports strong end to year
Retailer and catalogue company Talbots has reported a jump in fourth quarter income. It was not enough, however, for the company to avoid reporting a fall in income for the full year.
Net income for the fourth quarter was US$19.8m, compared to $15.4m for the fourth quarter of fiscal 2004. Earnings per share for the period increased 32% to $0.37 per diluted share, compared to $0.28 per diluted share for the same period last year.
Total company sales in the fourth quarter increased 3% to $486.2m. Retail store sales increased 3% to $414.1m. Comparable store sales increased 1.6% for the thirteen-week period ended January 28, 2006. Direct marketing sales increased 3% to $72.1m.
For the full year, however, net income was $93.2m versus $95.4m reported last year. But the company explained that last year's net income included a $7.8m tax benefit or $0.14 per share.
Excluding the tax benefit, last year's net income was $87.5m.
Earnings per diluted share were $1.72 this year compared to $1.70 reported last year, a 1% increase. Excluding the tax benefit, last year's earnings per share were $1.56 compared to $1.72 this year, reflecting a 10% increase.
Total company sales increased 7% to $1,808.6m. Retail store sales increased 6% to $1,543.6m Included in retail store sales was an increase in comparable store sales of 2.6% for the fifty-two week period. Direct marketing sales, including catalogue and internet, increased 9% to $265m.
Arnold B. Zetcher, chairman, president and CEO said: "We are delighted to have achieved a 32% increase in our fourth quarter earnings per diluted share over last year, driven by positive comparable store sales growth. Our strong inventory management also contributed to this healthy performance, resulting in earnings per share at the high end of our expectations and a penny above the First Call consensus estimate.
"We saw solid sales growth in both our comparable stores and in our direct marketing business. Among the strongest performers were our Talbots Woman large size and Talbots Kids concepts, both delivering consistently healthy sales growth throughout the year," continued Zetcher.
"Looking ahead, we are pleased with our new spring merchandise assortments, which we will be supporting with a comprehensive marketing programme. Included are national print and television advertising, a direct mail campaign, as well as a variety of in-store customer events."
"At this time, our outlook for first quarter 2006 earnings per share is in the range of $0.61 to $0.65, compared to last year's record performance of $0.63. This level of earnings per share includes approximately $0.04 in estimated stock option expense for the period. The first quarter 2006 outlook for earnings per share excluding the estimated stock option expense is in the range of $0.65 to $0.69."
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