Talbot's Q2 Sales Up 12%

The Hingham, MA-based chain said it earned $18.9 million, or 35 cents a share in this year's second quarter ending June 30 compared with $19.4 million, or 34 cents a share, one year ago. Excluding the 2004 tax benefit of $3.4 million, earnings would have increased 18% and per share earnings would have been 25% higher than the prior year's quarter.

"Our customer's positive response to our spring and summer merchandise assortments contributed to a steady improvement in company business throughout the entire season resulting in solid top- and bottom-line growth," Arnold B. Zetcher, the company's president, told investors and analysts in a conference call Wednesday. Zetcher said the company's earnings are expected to grow 16% in the second half of the fiscal year, or 29% excluding last year's tax benefit.

The retailer, known for its classic styles, reported that its retail and direct marketing efforts pushed net sales up 12% to $449.6 million during the quarter with retail store sales increasing 11%, or $338 million. Direct marketing sales, which include catalog and Internet sales, grew 16% to $60.8 million during the same period with online sales accounting for 41% of its total direct marketing business.

Driven by its refined line of sportswear and improvement in its Talbot Kids' brand, same-store sales at stores open at least a year also was up 6.7%, the company said. The results for the latest quarter barely beat analysts earnings estimates of 34 cents per share on sales of $444.5 million.

The firm, which opened 11 stores during the second quarter, operates 1,071 upscale women and children's clothing stores in the United States, Canada and the United Kingdom. Zetcher said the company plans to open an additional 25 stores during the second half of the year.