Talbots, When Low Growth Is Good Enough (TLB)

By Douglas A. McIntyre Updated Mar 26, 1:16PM EDT · Published Apr 1, 1:49PM EDT

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Talbots (NYSE: TLB) is seeing shares surge today after the apparel maker and retailer unveiled its strategic plan for long-term growth and for productivity improvement.

For starters, the company reaffirmed its guidance and it sees Fiscal-09 between $0.47 and $0.52. We have consensus as $0.37 EPS from First Call. Talbots is planning for top-line growth of roughly 3%, based on a slightly negative comparable sales with the Talbots brand being 11% and the J. Jill brand rising by +1%.

As far as productivity, Talbots is becoming a design-led organization that will focus on compelling merchandise that reflect each of its brand’s unique identity. It will streamline operations, control costs and inventories, use innovative marketing, and implement more efficient processes enterprise-wide.

The company has identified its key growth platforms to build its business on going forward that will drive long-term growth, profitability, and enhanced shareholder value.

Shares are up over 10% today at $11.90 in mid-day trading. Three or four months ago, this news would have probably sent shares south because of low top-line growth. With a $6.48 to $26.10 trading range over the last year, it looks like the earnings beat will be plenty. Now it just has to execute this plan.

Jon C. Ogg
April 1, 2008

Jon Ogg produces the Special Situation Investing Newsletter and he can be reached at [email protected]; he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.