Talbots operating profit tops view
NEW YORK (Reuters) - Women's apparel retailer Talbots Inc TLB.N posted higher-than-expected quarterly operating profit on Wednesday and affirmed its full-year forecast, sending its shares up 21 percent.
Talbots, which runs the Talbots and J. Jill chains, said better inventory management, expense controls and monthly markdowns contributed to a "dramatic improvement" in its merchandising gross margin.
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.
The company, majority-owned by Japan's Aeon Co Ltd (8267.T), said net income tumbled 69 percent to $1.6 million, or 3 cents per share, from $5.2 million, or 10 cents per share, a year earlier.
Sales in the quarter, ended May 3, fell to $542.4 million from $573.6 million a year ago. Sales fell 6 percent at Talbots stores and 12 percent at J. Jill stores.
Sales at stores open at least a year, or same-store sales, fell 9.8 percent, down 20.2 percent at J. Jill stores and off 7.4 percent at Talbots stores.
Talbots stood by its 2008 forecast for earnings from continuing operations of 47 cents to 52 cents per share.
Talbots shares rose to $9 in premarket trading, up from a Tuesday close at $7.44 on the New York Stock Exchange.
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