Talbots will close up to 100 stores
Shares sink after the women's apparel retailer cuts revenue projections and announces plans to shutter stores.
By Jeanine Poggi, TheStreet
Talbots (TLB) slashed its revenue outlook, sending shares plunging Tuesday morning.
The women's apparel retailer said it now expects third-quarter revenue to decrease by a low-single-digit percentage because of inconsistent customer traffic. Talbots previously forecast a low-single-digit increase. For the full year, Tablots now foresees revenue rising just 1%, also below its prior benchmark.
"While customer traffic in our stores in the third quarter has been inconsistent, which is a reversal of the improving trends we saw in the first half of the year, sales in our direct business continue to trend positive quarter-to-date," chief executive Trudy Sullivan said in a statement. "That said, we do believe we are solidly positioned for the remainder of the fall as well as the upcoming holiday season." Post continues after video:
Talbots reaffirmed its third-quarter profit forecast in the range of 22 cents to 28 cents a share, in line with analysts' estimates.
Management also outlined its three-year business plan, which includes shuttering up to 100 stores, turning its focus to its outlet business.
The retailer is looking to grow its annual revenue between 4% and 6% a year and lower selling, general and administrative expenses by about 100 to 150 basis points by 2013. Talbots believes this will increase gross margin by 450 to 500 basis points over the same period.
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[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
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