The Talbots, Inc (NYSE: TLB) announced results for the second quarter ended July 29, 2000 last week. Net income was $14.6m compared to $3.8m last year. Earnings per diluted share for the quarter were $0.46, an increase of 283 per cent over the $0.12 in the same period last year. Total Company net sales rose 17 per cent to $356.6m from $305.0m last year. Retail store sales were $311.5m, an 18 per cent increase over the $264.1m in the second quarter last year. Included in retail sales was an increase of 14.6 per cent in comparable store sales. Catalog sales increased 10% to $45.1m, up from $40.9m reported last year.

For the six-month period, net income increased to $47.3m from $23.1m last year. Earnings per diluted share were $1.50, up 103 per cent over the $0.74 reported for the comparable period last year. Total company net sales increased 19 per cent to $714.4m from $598m in the first half last year. Retail store sales were $606.9m, 20 per cent over the $507.6m in the same period last year. Included in retail store sales was an increase of 15.9 per cent in comparable store sales. Catalog sales rose 19 per cent to $107.5m, up from $90.4m reported in the six-month period last year.

Arnold B. Zetcher, chairman, president and CEO, commented, "We are delighted to have achieved record second quarter earnings per diluted share of $0.46, an increase of 283 per cent over the same period last year. These outstanding results were driven primarily by continued exceptional regular-price selling across all concepts and sales channels, including stores, catalog and Internet."

Mr. Zetcher continued: "We remain on track to open approximately 55 new stores by the end of the fiscal year, with our newest brand extension, Talbots Woman, expanding more rapidly as a major growth vehicle for the company. For the fall season, we plan to continue with our successful integrated marketing campaign, including national and major market print and television advertising as well as direct mail initiatives.

Talbots is a leading national specialty retailer and cataloger of women's classic apparel, shoes and accessories. The Company operates 686 stores - 407 Talbots Misses stores, including 19 Talbots Misses stores in Canada and six Talbots Misses stores in the United Kingdom; 161 Talbots Petites stores, including one Talbots Petites store in Canada; 35 Talbots Accessories & Shoes stores; 55 Talbots Kids stores; eight Talbots Woman stores; and 20 Talbots Outlet stores. Its catalog operation currently expects to circulate approximately 57 million catalogs worldwide in fiscal 2000. Talbots on-line shopping site is located at www.talbots.com.



THE TALBOTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts In Thousands Except Per Share Data)
(Unaudited)


Thirteen Weeks Ended Twenty-Six Weeks Ended
July 29, July 31, July 29, July 31,
2000 1999 2000 1999

Net Sales $ 356,597 $ 304,993 $ 714,356 $ 597,999

Costs and Expenses
Cost of sales,
buying and
occupancy 232,109 216,347 429,429 385,228
Selling, general
and administrative 99,835 81,016 205,620 171,842

Operating Income 24,653 7,630 79,307 40,929

Interest Expense
- net 884 1,516 2,443 3,306

Income Before Taxes 23,769 6,114 76,864 37,623

Income Taxes 9,151 2,354 29,593 14,485

Net Income $ 14,618 $ 3,760 $ 47,271 $ 23,138

Net Income Per
Share -
Basic $ 0.48 $ 0.12 $ 1.54 $ 0.74
Assuming
Dilution $ 0.46 $ 0.12 $ 1.50 $ 0.74

Weighted Average
Number of Shares
of Common Stock
Outstanding -
Basic 30,737 31,179 30,652 31,208
Assuming Dilution 31,799 31,557 31,602 31,414

Cash Dividends Per
Share $ 0.14 $ 0.11 $ 0.26 $ 0.22


THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

July 29, January 29, July 31,
2000 2000 1999
(unaudited) (audited) (unaudited)

Cash and cash
equivalents $ 68,238 $ 22,001 $ 18,235
Customer accounts
receivable - net 113,008 116,737 105,401
Merchandise inventories 177,452 183,614 171,795
Other current assets 53,328 47,434 48,857
Total current assets 412,026 369,786 344,288

Property and equipment
- net 210,229 203,206 192,259
Intangibles - net 116,989 118,853 120,717
Deferred income taxes 2,574 2,059 5,519

TOTAL ASSETS $ 741,818 $ 693,904 $ 662,783


Notes payable to banks $ - $ - $ -
Accounts payable 59,363 56,604 56,951
Accrued liabilities 87,598 87,327 67,970
Total current
liabilities 146,961 143,931 124,921

Long-term debt 100,000 100,000 100,000
Deferred rent under
lease commitments 19,246 18,641 17,789
Stockholders' equity 475,611 431,332 420,073

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 741,818 $ 693,904 $ 662,783


THE TALBOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)


Twenty-Six Weeks Ended
July 29, July 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 47,271 $ 23,138
Depreciation and amortization 23,126 21,105
Deferred and other items 955 2,105
Change in working capital 13,241 (17,799)
84,593 28,549

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (29,390) (22,686)
Proceeds from disposal of property
and equipment - 5
(29,390) (22,681)

NET CASH PROVIDED BEFORE FINANCING
ACTIVITIES 55,203 5,868

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock options 15,705 5,274
Cash dividends (8,010) (6,860)
Purchase of treasury stock (16,373) (6,206)
(8,678) (7,792)

OTHER (288) (36)

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 46,237 $ (1,960)