Financial Reports: Talbots, Blyth

Talbots Annual Sales Up 6%, Per Preliminary Results
In its preliminary and unaudited year-end results, Hingham, MA-based The Talbots (NYSE: TLB) announced a 6% rise in annual sales and an 8% decline in net income.

For the year ended Jan. 29, the apparel cataloger/retailer netted $96.4 million on sales of $1.7 billion. Catalog sales increased 5%, to $243.2 million. Retail store sales rose 7%, to $1.5 billion, and comparable store sales increased 2%.

Talbots said it’s reviewing its accounting for store leases and expects to restate its previously reported financial statements. But the earnings impact in any given period will not be significant, the company said, and the adjustments will not change historical or future cash flows.

During the fourth quarter, Talbots also changed the reporting for its Classic Awards customer loyalty program. The change reduced revenue with a corresponding reduction to selling, general, and administrative expenses and cost of goods sold. This reclassification will not affect Talbots’ operating income, net income, or earnings per share.

Blyth’s 4Q Catalog/Web Sales Up 19%
Greenwich, CT-based Blyth (NYSE: BTH), the manufacturer/marketer of candles and home décor that’s the parent of the Walter Drake, Miles Kimball, Exposures, and The Home Marketplace titles, reported a 3% rise in fourth-quarter net sales, to $498.8 million for the three months ended Jan. 31.

Fourth-quarter catalog and Internet net sales increased 19%, to $62.6 million, a result of a full quarter of Walter Drake sales. Operating profit gained a paltry 3%, however, to $6.2 million. The culprit? Higher returns due to order-processing backlogs and lower shipping and handling revenue resulting from increased backorders.

Total net earnings for the quarter increased 89%, to $39.2 million. In the fourth quarter of fiscal 2003, the company had recorded restructuring and impairment charges of $23.0 million, primarily from the realignment of its North American wholesale home fragrance business.

For the year, total net sales increased 5%, to $1.6 billion. Net earnings increased 12%, to $96.5 million. Blyth did not break out catalog and Internet sales for the full year.

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