) to overweight from underweight.
Analyst Stacy Pak says the 8.1% February comparable sales Talbots posted last week was a good number. She notes strength in regular price selling in early spring merchandise as well as in casual, refined lines.
Pak says inventory is up 15% per square foot and guidance is for up mid-singles at the end of the quarter, suggesting Talbots will have a healthy inventory to fund its midseason sale.
She says guidance looks achievable, if not conservative. She notes Talbots shares underperformed the market and softlines group last year.
She keeps her $1.57 fiscal 2005 (ending January) earnings per share estimate and $1.85 fiscal 06. She raises a $25 target to $36.