Unstructured Finance

Check Out Line: Mixed financial bag at Talbots

talbots1Check out the mixed results at women’s clothing retailer Talbots.

The company posted a higher-than-expected quarterly profit as tighter inventory management boosted margins, but demand lagged analysts’ expectations.

Talbots’ second-quarter results echoed those of the prior three-month period, when sales suffered as the retailer did not stock enough merchandise.

“Our top-line sales performance reflects our decision to remain on plan with respect to our promotional event calendar within what proved to be an aggressively promotional environment,” Chief Executive Trudy Sullivan said.

U.S. retailers posted modestly higher-than-expected August sales as consumers sought out bargains during the key back-to-school shopping season. The reports suggested retailers were able to clear excess inventories ahead of the key selling season without having to resort to deep discounts.

Also in the basket:

United Natural Q4 sales beat; gives strong FY outlook

Nespresso eyes N. America growth via stores

Casey’s says it has higher bid than Couche-Tard’s

(Reuters photo)

Check Out Line: More quarterly earnings to parse

louis1Check out the latest raft of earnings for clues on the U.S. economy’s health.

LVMH, the world’s biggest luxury group, posted a forecast-beating 13 percent increase in same-store sales, helped by a strong rebound in the United States and Europe.

The Paris-based maker of Louis Vuitton handbags and Hennessy cognac said its wines, spirits, watches and jewelry businesses — all hard hit by the downturn — had benefited from improving consumer spending.

Check Out Line: Power plays in the air

walgreen1Check out the power plays going on in the consumer world.

Walgreen said it will buy Duane Reed for $618 million in cash, catapulting the largest U.S. drugstore operator into the top spot in the New York City area. The deal price also includes the assumption of $457 million in debt.

Duane Reed is owned by private equity firm Oak Hill Capital Partners and operates 257 drugstores in the New York metropolitan area. Duane Reade will continue to operate under its brand name, and Walgreen expects to retain the employees at its stores, pharmacies and distribution centers.

Walgreen operates 70 stores in the New York area, including a multi-floor outlet in the heart of Times Square across the street from a Duane Reade store.

Check Out Line: Quarterly loss and job cuts at Talbots

talbots1Check out the quarterly loss and job cuts at women’s apparel retailer Talbots.

Talbots, whose clientele consists mainly of women above 35 years old, reported a first-quarter loss of 23 cents a share, less than half the 49-cent loss analysts had expected.

The company, majority owned by Japan’s Aeon Co Ltd, also said it would cut corporate headcount by about 20 percent in a move to save $150 million annually.

Check Out Line: Weakness at Talbots

talbots1Check out the deeper-than-expected quarterly loss at Talbots.

The women’s apparel retailer posted a fourth-quarter loss of $1.17 a share, excluding one-time items. That was far worse than what analysts polled by Reuters Estimates had expected. Sales fell 16 percent, while sales at stores open at least a year tumbled 25 percent.

Talbots is working to revamp its classic styles to boost sales in a slow market for women’s apparel. It has cut jobs, closed some units, suspended its dividend and frozen its pension plan to preserve cash. It also is looking to sell its J. Jill chain.

Stifel Nicolaus analyst Richard Jaffe, who has a “hold” rating on Talbots’ stock, called out the same-store sales decline as well as the 26-percent  decrease in direct sales. 

Check Out Line-Retail sector racks up more bad news

Check out the not-so-chipper news in the retail world.

bk1Restaurant chain Burger King reported lower profits and cut its full-year forecast due to the currency fluctuations, while cosmetics and perfume companies Estee Lauder and Elizabeth Arden rang up lower, albeit better-than-expected, profits and said they would cut jobs.

Indeed, retailers overall posted the second weakest monthly same-store sales performance since Thomson Reuters began tracking the data in 2000 as heavy job losses, weakness in the U.S. housing sector and the still-tight credit markets have many consumers closing their wallets.

In the mixed-bag camp, apparel retailer Gap saw same-store sales fall more than expected, but raised its full-year profit outlook.

Check Out Line: Apparel sales shrinking with economy

Check Out what the shrinking U.S. economy is doing to apparel sales.

The Paris-based Organization for Economic Cooperation and Development says the U.S. economy has probably slipped into a recession that will last through the middle of 2009.

But forget Paris, you don’t need to look any further than today’s results from apparel retailers for proof that the U.S. economy is in a slide.

Two retailers that cater to women over the age of 35, Talbots Inc and Chico’s FAS, each saw sales at established stores fall more than 13 percent in the latest quarter.

Check Out Line: Talbots leveling off

talbots.jpgCheck out Talbots’ sales forecast.
The struggling women’s apparel retailer said it expects same-store sales to be flat at its namesake stores in the current quarter and down low-to-mid single digits at its J. Jill stores.
That looks like progress, especially at the Talbots’ brand.
But, wait. Hasn’t the weakness in women’s apparel has been going on for some time now. So the glass-half-empty view would be to look at how that forecast compares with a year ago.
Same-store sales at Talbots’ stores fell 8.2 percent last year (and J. Jill same-store sales fell 6.5 percent).
So there might be some improvement coming at Talbots’, but it is off a weak comparison.
Then again, with how women’s apparel has gone lately, flat same-store sales might be a welcome new fashion trend.
Also in the basket:
Dollar Tree posts higher quarterly profit
Brown Shoe 2nd-quarter profit down; cuts outlook
Urban Outfitters Fashion Growth Plan (Wall Street Journal)

(Photo: Reuters)

Check Out Line: Talbots’ makeover includes board

talbots3.jpgCheck out the majority owner of Talbots exerting more control.

The women’s apparel retailer, which has endured hardships in recent months including falling sales, job cuts, an executive departure and a credit problem, said on Thursday that Tsutomu Kajita would become chairman of its board.

Kajita is senior vice president of international operations for Japan’s Aeon Co, Talbots’ majority owner.

“The appointment of Mr. Kajita as non-executive chairman further signifies Aeon and its management’s commitment and confidence in our continued success and ability to execute our long range strategic plan,” said Talbots Chief Executive Trudy Sullivan in a statement.

Check Out Line: Consumers seek basics; retailers seek mergers

eggs.jpgCheck out a busy day for retailers as earnings — or losses – poured in from BJ’s Wholesale, Talbots, Charming Shoppes and Brown Shoe. 

The “flight to necessities” by the U.S. consumer was on display as BJ’s  — which sells food and fuel — posted a 26 percent jump in quarterly profit.

But for businesses steeped in discrection, the quarter was no cakewalk.  Talbots posted sharply lower quarterly net profit; Charming Shoppes reported a quarterly loss and Brown Shoe posted a lower first-quarter profit.