Specialty retailer Talbots said poor September sales drove down third-quarter profit by 27 per cent.

Third-quarter net income still beat expectations at $20.0 million, compared to income of $27.2m last year.

Quarterly net sales rose 3 per cent to $426.3m from $413.4m a year ago, as retail store sales were up 2 per cent and same-store sales fell 2 per cent. Direct marketing sales rose 11 per cent.

Chairman, president and chief executive Arnold Zetcher said: "Following softness in our September trends, our store traffic and sales performance improved significantly in the latter part of October."