The Talbots Inc announced that earnings per share on a reported basis for the first quarter ending May 5, 2007 are expected to be in the range of $0.07 to $0.11, compared to its previously announced expectation of $0.36 - $0.43 earnings per share, primarily due to significantly weaker than expected Talbots brand April sales. The Talbots Inc total company comparable store sales are expected to be negative low to mid single digits for the first quarter, compared to its previously announced expectation of positive low single digits.
Arnold B. Zetcher, Talbots Chairman, President and Chief Executive Officer, commented, "While we experienced some fluctuation in our sales trends in the first quarter, primarily at the core Talbots brand, we were on track to achieve our previously announced total company earnings per share expectations as we entered April."
"In March, for the Talbots brand, we had very strong regular-price selling across all channels, posting high double-digit, regular-price comps in weeks two through four. These strong sales trends were offset by the softness in our mid-season sale event, which began on March 22nd and featured the same merchandise that did not perform well at regular-price in February. We took deeper than planned discounts in order to move our clearance merchandise."
"Although our Talbots brand sale event was softer than anticipated, we entered April with optimism because of the strength of March's regular-price selling and our marketing programs, which included a broad-based best customer event. However, beginning on April 4th, we started seeing a dramatic decline in our regular-price sales trends, which then continued throughout the month." "We believe this was driven by a combination of factors, including adverse weather in the first few weeks of the period, the impact of the Easter shift and a much weaker than anticipated customer response primarily to our casual merchandise. At this time, due to our April performance we anticipate that Talbots brand first quarter comparable store sales will be in the negative low to mid single digit range, versus our previous expectation for positive low single digits."
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