Interviews
News Flash
Talbots brand merchandise gross margin continues to expand
09 Aug '08
5 min read
Additional Second Quarter Sales Commentary:
• The Talbots brand second quarter regular price selling trends were consistent with its first quarter trends of negative mid-single digits on inventories in the negative high-teens. This resulted in much improved sell-thru to the year ago period.
• June comps were the most difficult in the quarter, particularly for the Talbots brand due to the shift in the start of the season end sale event. However, both brands experienced a pick-up in selling trends in July, with total company comps in the positive low single digit range.
• The Company ended the quarter with very lean inventory positions at both brands, with total Company inventory down 22% compared to last year.
• Overall for the Company, the improvement in Talbots brand merchandise gross margin will be offset by the decline in J. Jill brand merchandise gross margin and deleverage in occupancy costs due to negative comps. This will result in second quarter total Company reported gross margin of approximately 30 basis points below last year.
• The Company expects to be in compliance with all covenants of its acquisition term loan agreement for the second quarter fiscal 2008.
Ms. Sullivan concluded, "As we enter the third quarter, we are optimistic about the opportunities that lie ahead as we introduce our revamped and reinvigorated product offerings at both brands reflecting the new creative teams. However, we remain cautious about the retail sector given the continued uncertainty in the macroeconomic environment and the consumer's judicious purchasing behavior.
While we are maintaining our previously announced outlook for the full year 2008 earnings, we will continue to closely monitor our performance and the macro environment, as we focus on driving growth across the organization and enhancing our long term shareholder value. Overall, we continue to be confident in our approach and the steps we are taking to manage our business."
Second Half 2008 Outlook:
The Company has reconfirmed its previously announced outlook for fiscal 2008 earnings from ongoing core operations, excluding Talbots Kids, Mens and U.K. operating results and close down costs, to be approximately in the range of $0.47 to $0.52 per diluted share. The Company is planning for a loss from non core operations in the range of approximately ($0.64) to ($0.59) per share, for a total loss per share in the range of approximately ($0.17) to ($0.07), compared to the ($3.56) loss per share reported in fiscal 2007.
As previously stated, the Company expects that it will complete the closing of its Talbots Kids, Mens and U.K. businesses in the third quarter of 2008. At that time, the operating results and close down costs of these businesses will be reported as discontinued operations for the third quarter and all prior reporting periods.
• The Talbots brand second quarter regular price selling trends were consistent with its first quarter trends of negative mid-single digits on inventories in the negative high-teens. This resulted in much improved sell-thru to the year ago period.
• June comps were the most difficult in the quarter, particularly for the Talbots brand due to the shift in the start of the season end sale event. However, both brands experienced a pick-up in selling trends in July, with total company comps in the positive low single digit range.
• The Company ended the quarter with very lean inventory positions at both brands, with total Company inventory down 22% compared to last year.
• Overall for the Company, the improvement in Talbots brand merchandise gross margin will be offset by the decline in J. Jill brand merchandise gross margin and deleverage in occupancy costs due to negative comps. This will result in second quarter total Company reported gross margin of approximately 30 basis points below last year.
• The Company expects to be in compliance with all covenants of its acquisition term loan agreement for the second quarter fiscal 2008.
Ms. Sullivan concluded, "As we enter the third quarter, we are optimistic about the opportunities that lie ahead as we introduce our revamped and reinvigorated product offerings at both brands reflecting the new creative teams. However, we remain cautious about the retail sector given the continued uncertainty in the macroeconomic environment and the consumer's judicious purchasing behavior.
While we are maintaining our previously announced outlook for the full year 2008 earnings, we will continue to closely monitor our performance and the macro environment, as we focus on driving growth across the organization and enhancing our long term shareholder value. Overall, we continue to be confident in our approach and the steps we are taking to manage our business."
Second Half 2008 Outlook:
The Company has reconfirmed its previously announced outlook for fiscal 2008 earnings from ongoing core operations, excluding Talbots Kids, Mens and U.K. operating results and close down costs, to be approximately in the range of $0.47 to $0.52 per diluted share. The Company is planning for a loss from non core operations in the range of approximately ($0.64) to ($0.59) per share, for a total loss per share in the range of approximately ($0.17) to ($0.07), compared to the ($3.56) loss per share reported in fiscal 2007.
As previously stated, the Company expects that it will complete the closing of its Talbots Kids, Mens and U.K. businesses in the third quarter of 2008. At that time, the operating results and close down costs of these businesses will be reported as discontinued operations for the third quarter and all prior reporting periods.
Talbots Inc
Popular News
Leave your Comments
Esteemed Clients
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
