Talbots Q4 Profits up 29%

HINGHAM, MA-Higher sales and fewer markdowns help boost fourth-quarter profits by 29% at women’s clothing retailer Talbots. The Hingham, MA-based chain said its net income rose to $19.8 million, or 37 cents per share, in the quarter ending Jan. 28, a 29% increase from the same period last year when net income was $15.4 million, or 28 cents. Analysts expected earnings of 36 cents per share for the quarter.

Quarterly sales for the company also rose 3% to $486.2 million, due largely to tighter controls on inventory which allowed the high-end clothing retailer to sell more of its lines at full price. Company officials said direct marketing sales were also up 3% during the period and quarterly sales at stores open at least a year increased by 1.6%.

For 2005, annual earnings dropped to $93.2 million, or $1.72 per share, from $95.4 million, or $1.70 per share, in 2004, even though sales for 2005 were up 7% and same store sales increased 2.6%. The company had sales of $1.81 billion last year.

Also showing strong yearly gains was the company’s direct marketing business, which grew 9% during 2005 to set a three-year profitability record, the company said. Helping those numbers was a 28% increase in sales related to Talbots internet operation.

The company, which opened 15 stores in 2005 to bring its total to 1,083 stores , also said it plans to acquire The J.Jill Group during the second quarter in a deal that it expects will facilitate its long-term growth and profitability.

Talbots predicts that its first-quarter income will range from 61 cents to 65 cents per share, or 65 cents to 69 cents before stock-option costs. However, an unexpected 6% drop in February comparable store sales, due largely to a major snowstorm that swept across most of the country, could impact those numbers.