Talbots swings to profit, projects higher revenue

Hingham, Mass. Talbots reported Tuesday that it posted a profit in the fourth quarter ended Jan. 30, compared with a loss the prior year. The retailer recorded a profit of $4.1 million, compared with a loss of $361.5 million in the year-ago period.

Talbots also reported that it expects revenue in the first quarter and the full year to top Wall Street expectations.

Fourth-quarter revenue fell to $315.9 million from $327.9 million, still beating Wall Street's predicted $314.4 million. Same-store sales dropped 7.2%.

Last week Talbots completed a financing deal with BPW Acquisition that ended its relationship with its major investor Aeon and boosted its liquidity.

For the year, Talbots lost $29.4 million, compared with a loss of $555.7 million a year ago.

Annual revenue dropped to $1.24 billion from $1.5 billion, while same-store sales fell 19.3%.

“We delivered a strong fourth quarter, capping off a successful year of tremendous change and innovation. Our strategic transformation -- re-energizing our brand, modernizing our merchandise, streamlining our organization and improving our business processes -- firmly positions us for future growth and profitability,” said Trudy F. Sullivan, Talbots president and CEO. “With the completion of the BPW merger and related transactions, we now have a very strong balance sheet and capital structure, so we can focus our energy on deepening our relationship with our customers and maximizing value for all of our stakeholders.”

Talbots expects its 2010 sales to reach $1.28 billion to $1.3 billion, and anticipates first-quarter sales will $318.4 million to $321.4 million. Analysts forecast full-year revenue of $1.25 billion and first-quarter sales of $302.9 million.

Talbots operates 580 stores in 46 states, Washington, D.C., and Canada.