Financial Reports: Talbots, Chico’s


Sales Way

Up, Income Down at Talbots
Thanks to its May 2006 purchase of women’s apparel cataloger/retailer J. Jill Group, fourth-quarter direct sales for The Talbots climbed 58%, to $114.2 million for the three months ended Feb. 3. Total sales for the quarter rose 31%, to $638 million. But same-store sales declined nearly 2%. By brand, same-store sales for Talbots decreased 2%, while same-store sales for J. Jill rose 1.5%. As for net income, the Hingham, MA-based apparel merchant earned just $17,000, compared with net income of $19.8 million for the fourth quarter of 2005.

For the fiscal year, catalog/Internet sales soared 45%, to $385 million. Total sales for fiscal 2006 were $2.23 billion, up 23% from $1.81 billion the previous year. Net income was $31.6 million, down from $93.2 million for fiscal 2005.

“As we previously announced, after experiencing a six-month period of healthy positive comps beginning in April and a particularly strong September for the Talbots brand, we anticipated a strong fourth quarter and increased our inventory commitment,” CEO Arnold Zetcher said in a statement. “Unfortunately, these strong sales trends were not sustained, which resulted in higher levels of markdown merchandise available for our post-Christmas semiannual clearance event and deeper discounts.”

As for J. Jill, Zetcher added, “we saw a continued trend of improving business performance throughout the fourth quarter, with comps turning positive for the first time in over a year. However, we did not achieve our overall sales expectations for the period due to weaker-than-anticipated performance across all channels. This also resulted in heavier markdowns during the period, which impacted the bottom line.”

Sales Up, Profits Down at Chico’s Too
Fourth-quarter net sales for women’s apparel merchant Chico’s FAS rose nearly 19%, to $446.0 million for the three months ended Feb. 3. Catalog and Internet sales increased 41%, to $16.3 million. The Fort Myers, FL-based company attributed the rise in direct sales to an increase in the amount of merchandise now available on the Websites of its White House/Black Market, Soma, and Chico’s brands and to increased circulation of its Chico’s catalog. Net income sunk 59%, however, to $18.2 million from $44.4 million last the previous fourth quarter. Same-store sales decreased 2%.

For fiscal 2006, net sales rose 17%, to $1.65 billion. Catalog and Internet sales rose 48.2%, to $53.5 million from $36.1 million. Net income fell 14%, to $166.6 million from $193.9 million in fiscal 2005. Same-store sales for the Chico’s brand were flat, while same-store sales for White House/Black Market increased approximately 11%.

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.