In its press release, Talbots relied on two recent standard excuses: hurricanes and the late Labor Day weekend. Fool W.D. Crotty recently explored this concept, highlighting the fact that even women's clothing retailer Chico's
Talbots went on to say that its annual sale, while somewhat of a success, hasn't driven the expected full-price sales that it usually does. As a result of the uncertainty and trends, the company said that same-store sales are expected to be in the negative low to mid-single digits, with earnings coming in at $0.45 to $0.50 per share, as compared with $0.60 per share in the same quarter last year.
While some short-term, one-time disappointment because of weather and calendar changes might have provided a good bargain price to buy into performers such as Chico's, it's harder to argue that Talbots deserves the same faith. Last quarter, investors accepted word that Talbots met expectations with optimism -- even though those expectations had been previously lowered.
After all, Talbots is still showing some signs of a continued struggle for fashion relevance, as compared with Chico's, Ann Taylor
Meanwhile, when my fellow Fool Seth Jayson explored some chic retailing stocks not too long ago, Talbots didn't make the grade. In its last earnings announcement, Talbots' problems with inventory came to light once again. It's had some degree of difficulties keeping popular items that customers will buy at full price well-stocked, a retailing no-no.
So, Talbots shares slid today as investors absorbed the word as well as a slew of ratings downgrades from analysts. However, it's hard to imagine this as too much of a surprise. Until Talbots shows more sure signs that it can provide stable earnings and sales growth, investors should probably shop with care.
Talk to fashion-conscious Fools on our What to Wear? discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.