TalbotsWomen's clothing retailer Talbots (TLB) has released a three-year financial outlook and strategic plan, and it's not too sanguine. The company cut its revenue outlook for the third quarter and full fiscal year 2010. The plan also involves closing 75-100 stores by 2013, with an annual sales growth rate of around 5% by then. Investors ran for the exits on the news, pushing Talbots stock price down over 11%, to around $11.10, in midmorning trading.

Talbots President and CEO Trudy F. Sullivan put the best face on the new outlook and plan: "Looking forward, we will continue to build on our key initiatives and are expecting to capitalize on opportunities to generate strong top- and bottom-line growth." But all the spin in the world can't change the fact that customer traffic in the third quarter has been "inconsistent."

A Focus on Growth

It's no surprise that Talbots trimmed its sales growth forecast for the third quarter and full year 2010. It now expects a top-line sales decrease of low-single digits in the quarter and an increase of 1% for the fiscal year. This is below the company's previous expectations for a low-single-digit sales growth for both periods.

The retailer reiterated its expectations for adjusted earnings per share from continuing operations in a range of approximately 22 cents to 28 cents for the third quarter and 84 cents to 92 cents for the full year. Analysts estimate quarterly earnings of 27 cents per share and full-year earnings of 90 cents.

The Hingham, Mass.-based company said its strategic plan will focus on achieving growth across all channels, as well as continued inventory management and improved supply-chain and information-technology systems.

By 2013, the apparel company hopes to achieve total sales in the range of approximately $1.4 billion to $1.5 billion, which would represent a compounded annual growth rate of approximately 4% to 6% from 2010. It expects to improve gross margins, selling and general and administrative expenses.

"We are pleased with our overall first-half performance and the successful launch in the third quarter of key initiatives," Sullivan said. "Further, we continue to have confidence that we have the right strategies in place to achieve long-term sustainable growth and profitability." With shares losing over 11% of their value, It seems the market doesn't share her confidence.

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I'll move forward, by reiterating what Janet and sjs380 separately wrote on 06 October 2010, by incorporating their comments by reference in their entirety. They express my sentiments as a near lifetime Talbots' loyalist circa 1979 -2007, when a combination of market conditions and the store's compromised quality, with its concomitant failure to make necessary price adjustments prompted me to start shopping elsewhere. I surrendered my Platinum Talbots card and moved on with a sense of loss. No longer is there a store where I can reliably shop with confidence that I will find the perfect attire for all occasions - business, casual or formal. Moreover, I've contended with adapting to lifetime sizing changes which ranged from a size 2 petite to a 14 women's petite and finally back down to a 10 petite. Like Cheryl and Kirby, I too question the reliability/accuracy of the company's present sizing structure.

December 12 2011 at 12:01 AM Report abuse rate up rate down Reply

I love Talbots clothes and the fact they carry sizes 2 & 4 petites. And just because I'm a smaller size does not, by no means, represent the fact I cannot afford Talbot's prices! Please don't stop carrying your line for petite small figured ladies.

August 27 2011 at 12:40 PM Report abuse rate up rate down Reply

I have missed the old Talbot's. Not enough casual items now and they seem to be catering to the professional younger women. I have 2 young professional daughters and neither of them would think to shop at Talbots. I think you're missing your target customer of old. Maybe that's the plan, but I'm dissappointed almost every time I visit Talbot's lately. Too bad, as I felt I was a very good customer for many years.Bring some of the old classic cuts and styles back and add some color!

October 29 2010 at 10:25 PM Report abuse rate up rate down Reply

Sorry to read this....contrary to other entries: There IS a market for classic, quality made tailored clothing for women. I think Talbots "lost it" when it tried to change its image and cater to younger women who wanted their trousers hanging off their hips etc......those buyers are NOT shopping at Talbot....as evidenced by the market and by the responses here. There are not alot of options for buying classic, traditional, tailored women's clothing. Could they consider going back to the basics?

October 06 2010 at 11:34 PM Report abuse rate up rate down Reply
Cheryl & Kirby

Maybe if Talbots would quit screwing around with the sizing of their clothes, problems wouldn't be building up for the corporation. Three years ago, I could wear a size 14 blouse, nothing has changed for me, in fact I have lost a lot of weight, and now I must purchase 16 Women's blouses at $10.00. I just won't do it based on principal.

October 06 2010 at 10:38 PM Report abuse rate up rate down Reply

"Sanguine?" Just say optimistic or positive--you sound like you are trying too hard.

October 06 2010 at 9:45 PM Report abuse rate up rate down Reply

As an upper middle class east coast full time working professional, 55 years old, 75% of my clothing, up to 3 years ago, was from Talbots. I used to buy the things I loved the most in every color. I always felt I presented a classic understated look that conveyed confidence and I would shop four times a year probably spending $2,500.+ I went to my Talbots yesterday, walked right past the white doors, doubled back, went in and realized Talbots existed no more. I still want classic well made, well fitting clothing, so I'll be looking for a new label.

October 06 2010 at 8:37 PM Report abuse +1 rate up rate down Reply

I love Talbots...sorry to hear this.

October 06 2010 at 7:57 PM Report abuse +1 rate up rate down Reply

I love Talbots clothes but I almost always wait for them to be on sale because they are too expensive. They do have great sales though.

October 06 2010 at 7:51 PM Report abuse -1 rate up rate down Reply

Talbot's was known for quality and "pricey" clothes but now they have "pricey" and no quality. They have lost their way. Women today will pay for quality and design which is where they should be but are instead in an "outlet" mode. And... they should drop the dress line all together. They've never been interesting. Too long for young women and too "young" for elderly women. What gives???

October 06 2010 at 7:10 PM Report abuse -1 rate up rate down Reply