Talbots swings to profit on lowered costs

Hingham, Mass. The Talbots returned to a profit in the fiscal second quarter as the company cut costs to offset slightly lower revenue.

The retailer raised its yearly outlook on the results, but trimmed its revenue outlook due to the continued weak economy. It also offered third-quarter guidance below expectations.

Net income for the three months ended July 31 totaled $941 million, compared with a loss of $24.5 million in the year-ago period.

Revenue fell 1% to $300.7 million from $304.6 million, a year earlier. Same-store sales were down 1.4%.

Talbots CEO Trudy F. Sullivan said the company continued to see double-digit increases in sales of full-priced items, "which is in line with our focus on improving margins through strong inventory management."