Talbotssaid on Wednesday that quarterly net profit tumbled, hurt by heavy markdowns and declining sales at its flagship Talbots chain, sending its shares sharply lower.
The company, which operates the J. Jill and Talbots chains, said it earned just $17,000 in the fourth quarter, compared with a profit of $19.8 million, or 37 cents a share, a year ago.
Analysts, on average, expected a loss of 1 cent a share according to Reuters Estimates.
"Strong sales trends were not sustained, which resulted in higher levels of markdown merchandise ... and deeper discounts," Chief Executive Arnold Zetcher said in a statement.
Fourth-quarter sales were $638 million, and included sales of $433 million at its Talbots stores and $91 million at the J. Jill stores, as well as Internet and catalog sales.
Talbots said it expects to earn between 36 cents and 43 cents a share in the first quarter of fiscal 2007. For fiscal 2007, the company expects to earn between $1.05 and $1.15 a share.
The outlook matched analysts' estimates of 38 cents a share for the quarter and $1.13 a share for fiscal 2007, according to Reuters Estimates.
The apparel retailer's new spring merchandise was selling well and was expected to boost sales in the quarter, Zetcher said.