Retailers Report Earnings

AnnTaylor Stores led a raft of retailers reporting quarterly results Tuesday, as the seller of upscale women's clothing beat Wall Street projections by 22 percent.

Powerhouse home-improvement retailer Home Depot, J.C. Penney and Talbots slightly exceeded expectations, while the Limited Inc. posted results in line with the consensus estimate.

AnnTaylor

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ANNTAYLOR (ANN)

For the quarter ended Oct. 31, sales climbed 22 percent to $227.5 million from $187.2 million a year ago. Same-store sales rose 12.5 percent.

A year ago, AnnTaylor moved toward tighter, brightly colored clothing, which turned off many of its traditional customers. The company has since returned to less flashy, more conservative professional clothing, winning back many women.

Home Depot

The Home Depot (HD), the world's largest home improvement retailer, said it earned $392 million, or 26 cents a share, up 31 percent from $299 million, or 20 cents, a year ago, excluding a one-time $104 million pre-tax charge in the 1997 period. The company was expected to earn 25 cents, according to First Call.

Sales rose 24 percent to $7.7 billion from $6.22 billion a year ago. Same-store sales rose 7 percent.

During the third quarter, Home Depot opened 38 new stores, including its first two stores outside North America, and it relocated three stores. At the end of the period, it operated 717 stores.

J.C. Penney

Shares of J.C. Penney (JCP) dipped 2 1/8 to 49 1/2 after the Plano, Texas, retailer posted third-quarter profits of 68 cents a share, compared to 40 cents a year ago, excluding one-time charges of 45 cents in the 1997 period related to Penney's voluntary retirement program.

While that surpassed the First Call consensus estmate of 67 cents a share, sales edged up a meager 1.5 percent to $7.55 billion from $7.44 billion a year ago. Sales at stores open at least a year dropped 4.0 percent.

James E. Oesterreicher, the chief executive, cited "soft sales in our department stores."

"For the fourth quarter, we expect continued higher growth in our drugstore and direct marketing operations and a modest sales gain for JCPenney comparable stores and catalog," he said.

The Limited Inc.

The largest U.S. specialty retailer said it earned $39.4 million, or 17 cents a share, in the third quarter, up from $32.5 million, or 14 cents, excluding a onetime gain a year earlier. That matches the consensus of analysts surveyed by First Call Corp.

Sales of Columbus, Ohio-based Limited (LTD) climbed 4 percent to $2 billion from $1.92 billion a year ago, adjusted for the spin-off of Abercrombie & Fitch Co.

Specialty retailers have been performing especially well in 1998, as have discount retailers, at the expense of more traditional department stores chains.

Talbots

The Hingham, Mass., retailer of women's and children's clothing said it earned $12.7 million, or 40 cents a share, in the third quarter, up from $11.2 million, or 35 cents, a year ago, as shoppers bought more clothes at full price and on markdowns.

The per-share results met the consensus of analysts surveyed by First Call.

For the quarter ended Oct. 31, sales rose 5 percent to $267.7 million from $256 million a year earlier. Same-store sales edged up 1.8 percent.

The company got a big boost in October, when same-store sales soared 26.3 percent, as customers flocked to the stores for Talbot's (TLB) conservative apparel. Like AnnTaylor, Talbots tried a flashier line of clothing last year in an effort to attract more business, but its attempt faltered.

Zale Corp.

The Dallas-based jewelry king tallied a 50 percent rise in profits to $2.2 million, or 6 cents a share, from $1.1 million, or 3 cents, a year earlier, excluding a gain on the sale of its Diamond Park Fine Jewelers unit. That beat the 4-cent-a-share estimate of analysts surveyed by First Call.

Sales rose 4.7 percent to $254.2 million from $252.5 million a year ago, but they jumped 8.3 percent excluding sales from the Diamond Park unit.

Zale (ZLC) shares edged up 1/4 to 26 11/16 Tuesday. The company operates about 1,100 specialty retail jewelry stores.

Dayton Hudson

The Minneapolis-based general goods retailer posted profits of $185 million, or 39 cents a share, compared to $160 million, or 38 cents, in the year-earlier quarter, excluding charges in both periods. Dayton Hudson matched First Call analysts' expectations of 39 cents.

Charges for the third-quarter totaled $1 million compared to $19 million, or 4 cents, a year earlier. Charges in the latest quarter did not affect the share price.

Sales of the company, whose stores include Target and Mervyn's, rose 10 percent ithe quarter to $7.3 billion from $6.6 billion last year.

Written By Jeffry Bartash