Classic-clothing retailer Talbots (NYSE:TLB) has been having a hard time pushing its apparel lately, but on Wednesday it reported some promising news. While third-quarter profits were down, it said sales late in the quarter picked up some steam.
For Talbots fans, this is good to hear, especially considering indications in the recent past that the company's product mix just wasn't inspiring shoppers to open their wallets, even after red-line markdowns. October same-store sales dipped 8.4%, which led the company to revise its third-quarter outlook downward several weeks ago.
More good news? Talbots said it opened 33 new stores during the third quarter, and still plans to open 20 stores in the fourth. This steadily increasing presence is one of the reasons the company was a Stocks for Mom pick for Mother's Day this past May. Also in the fourth quarter, Talbots plans to expand its marketing campaign -- including television advertising -- to lure shoppers to its stores during the crucial holiday season.
While improving sales and solid plans sound like reasons to celebrate, Talbots' third quarter looks a little dowdy compared to the third-quarter numbers posted by another women's clothing retailer, Ann Taylor (NYSE:ANN). Ann Taylor has shown over the past several months that it's more in touch with what women are looking for in fashion.
Overall, the retail environment has been touch-and-go lately, and it's anyone's guess which retailers are likely to come out on top. Consumers are getting touchy, and even giants like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have shown reluctance to make definitive calls on the prospects for upcoming holiday sales.
In its press release, Talbots took a similar conservative approach. While the company said it believes its sales trends are improving, it also said it needs to wait to be able to gauge its fourth-quarter outlook with clarity, and that's probably wise. Given the unpredictable sales of the last couple months, it seems fair that investors might want to take a cautious approach to Talbots as well.
Is Talbots equipped to handle cutthroat competition for the crucial holiday season? Get answers on the Fool's Retail discussion board.
Alyce Lomax welcomes your feedback at [email protected].
