Several consumer-goods stocks reported quarterly results last week. There's good, there's bad, there's ugly. Are these stocks you should consider -- or stay far, far away from? Let's see what happened, and check into what our Motley Fool CAPS community has to say about these stocks.


CAPS Rating (out of 5)

Change in Earnings Per Share

Revenue Change

Impact on Price

Talbots (NYSE:TLB)





Sally Beauty (NYSE:SBH)





Men's Wearhouse (NYSE:MW)





J. Crew (NYSE:JCG)










Talbots bested analysts' expectations with a net loss of $9.4 million, or $0.18 per share, versus net income of $8.1 million or $0.15 per share last year. The most recent results include an $0.08-per-share hit from acquisition-related expenses, and $0.06 per share in compensation expenses and consulting fees. Ouch.

Same-store sales dropped 7.9%, with its namesake brand's comps falling 8.2% and J. Jill's comps down 6.5%. It doesn't sound so good to me. (Talbots has been a longstanding stinker, in my opinion, although other retailers targeting older women, like Chico's (NYSE:CHS) and Coldwater Creek (NASDAQ:CWTR), have had similar difficulties lately). But investors thought otherwise last week, since Talbots shares climbed on the news.

The CAPS community seems to feel just as bearish as I do, since the stock has just one star. BuyingRetail sums up a bearish point: "Difficulty with merchandising mix. Merchandise needs a bold new direction but their team seems to be ducking for cover." And when it comes to bull pitches, well, there really aren't any to speak of in 2007. Sounds like CAPS isn't too enamored of Talbots.

Is beauty only skin deep?
Sally Beauty's profit may have slipped, but it beat analysts' expectations. Net earnings fell 45%, but the company said last year's GAAP net earnings are not reflective of the change in capital structure, since it was still owned by Alberto Culver back then.

The stock has a three-star rating in CAPS, with the most-recommended bull pitch coming from WhyBeI in July:

With all the bad news, this company's price [hasn't] really changed during the last year or so. This is a great sign of a good business in some distress. Now the question is this: do you believe the management is going to bring a change? I do.

On the other hand, jimbuffet said last February that "This is a short's dream."

Despite its emphasis on youthful shoppers, Wet Seal has had a tough time. It swung to a loss in its third quarter, with a net loss of $3.3 million, or $0.04 per share, versus net income of $2.4 million, or $0.02 per share, in the same quarter the previous year. Sales may have increased, but its comps dropped 3.4%. Shares fell 10% on the news.

CAPS investors aren't too crazy about Wet Seal; it has just two stars. A bullish CAPS player, JSPEED6, said, "Wet Seal targets one of the top spending demographics. This only has room to grow as the holidays approach and the weather finally changes over and has great potential in the next six months." LifeIsGood123 had this to say this time last year: "Wide, outspread weird fashions that aren't in. A real downer."

Dress for success?
Let's switch from women's retail to men's -- Men's Wearhouse. Its guidance came in a bit lighter than Wall Street was expecting and the stock fell 16%. CaligiurideJesus commented this week, "Selling at 52-week low. Profitable. Not a lot of debt. Great price, basically." Interestingly, there are no bear pitches regarding Men's Wearhouse in CAPS.

J. Crew's another three-star stock; its stock jumped 19% on its third-quarter results. Its net income increased 3% on a 21% increase in revenues, and the retailer increased its 2007 guidance to between $1.50 per share and $1.52 per share; it had previously guided for earnings of $1.42 per share to $1.46 per share.

CAPS All-Star PLynchJr gave a bull case on J. Crew just last month:

Great brand that is being resurrected under [Mickey] Drexler (former Gap CEO back when they didn't suck). He owns about 10% of the company and other insiders also have large stakes. JCG sells high quality classic clothes to upscale adults. JCG has surpassed 1 billion in sales and has 3 straight years of double digit comp sales increases. Long term debt has been significantly reduced. Financials are steadily improving. Room for lots of expansion. They've recently launched 2 new concepts (crewcuts and Madewell) that are off to a good start.

To my way of thinking (and you may disagree), J. Crew and Men's Wearhouse seem to be the most interesting stocks for further research out of this set, although I don't see any urgency to snap up shares now. And given CAPS' middle-of-the-road, three-star ratings on both stocks, the community seems to feel the same way. If you disagree with the community's sentiments, be sure to drop by CAPS and offer your two cents -- the more investors participate, the stronger CAPS gets.

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Alyce Lomax does not own shares of any of the companies mentioned. As of this writing, she was a CAPS All-Star, ranked 2,565 out of 40,643 rated players. The Fool has a disclosure policy.