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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 2, 2003

Commission file number: 1-12552

THE TALBOTS, INC.

(781) 749-7600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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INDEX TO FORM 10-Q

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PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

THE TALBOTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) FOR THE THIRTEEN AND TWENTY-SIX WEEKS ENDED AUGUST 2, 2003 AND AUGUST 3, 2002 (Amounts in thousands except per share data)

See notes to consolidated financial statements.

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THE TALBOTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AUGUST 2, 2003, FEBRUARY 1, 2003 AND AUGUST 3, 2002 (Dollar amounts in thousands except share data)

See notes to consolidated financial statements.

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THE TALBOTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 2, 2003 AND AUGUST 3, 2002
(Dollar amounts in thousands)

See notes to consolidated financial statements.

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THE TALBOTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) (Dollar amounts in thousands except share data)

1.		OPINION OF MANAGEMENT
		With respect to the unaudited consolidated financial statements set forth herein, it is the opinion of management of The Talbots, Inc. and its subsidiaries (the “Company”) that all adjustments, which consist only of normal recurring adjustments necessary to present a fair statement of the results for such interim periods, have been included. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the fiscal year ended February 1, 2003, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. All significant intercompany accounts and transactions have been eliminated in consolidation.
		Certain prior year amounts have been reclassified to conform to current year classifications.
2.		FEDERAL AND STATE INCOME TAXES
		The Company has provided for income taxes based on the estimated annual effective rate method.
3.		COMPREHENSIVE INCOME
		The following is the Company’s comprehensive income for the periods ended August 2, 2003 and August 3, 2002:

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4.		STOCK-BASED COMPENSATION
		The Company accounts for stock-based compensation awards to employees using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees. Had the Company used the fair value method to value compensation, as set forth in SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company’s net income and net income per share would have been reported as follows:

	During fiscal 2003, the Company issued 307,125 restricted shares with a total market value of $7.7 million to members of Company management under its 2003 Executive Stock Based Incentive Plan.

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5.

NET INCOME PER SHARE

The weighted average shares used in computing basic and diluted net income per share are presented below. For the thirteen week periods ended August 2, 2003 and August 3, 2002, options to purchase 2,417,349 and 2,490,666 shares of common stock, respectively, were not included in the computation of diluted net income per share because the options’ exercise prices were greater than the average market price of the common shares. For the twenty-six week periods ended August 2, 2003 and August 3, 2002, 2,536,049 and 2,487,666 shares, respectively, were not included in the computation of diluted net income per share.

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SEGMENT INFORMATION

	The Company has segmented its operations in a manner that reflects how its chief operating decision-maker reviews the results of the operating segments that make up the consolidated entity.
	The Company has two reportable segments, its retail stores (the “Stores Segment”), which includes the Company’s United States, Canada and United Kingdom retail store operations, and its catalog operations (the “Catalog Segment”), which includes both catalog and internet operations.
	The Company’s reportable segments offer similar products; however, each segment requires different marketing and management strategies. The Stores Segment derives its revenues from the sale of women’s, children’s and men’s classic apparel, accessories and shoes, through its retail stores, while the Catalog Segment derives its revenues through its approximately 26 distinct catalog mailings per year and through its e-commerce site at www.talbots.com.
	The Company evaluates the operating performance of its identified segments based on a direct profit measure. The accounting policies of the segments are generally the same as

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those described in the summary of significant accounting policies, except as follows: direct profit is calculated as net sales less cost of goods sold and direct expenses, such as payroll, occupancy and other direct costs. Indirect expenses are not allocated on a segment basis; therefore, no measure of segment net income or loss is available. Assets are not allocated between segments; therefore, no measure of segment assets is available.

     The following is the Stores Segment and Catalog Segment information for the thirteen and twenty-six weeks ended August 2, 2003 and August 3, 2002:

     The following reconciles direct profit to consolidated net income for the thirteen and twenty-six weeks ended August 2, 2003 and August 3, 2002:

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with the consolidated financial statements of the Company and the notes thereto appearing elsewhere in this document.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items in the Company’s consolidated statements of earnings for the fiscal periods shown below:

THE THIRTEEN WEEKS ENDED AUGUST 2, 2003 COMPARED TO THE THIRTEEN WEEKS ENDED AUGUST 3, 2002 (SECOND QUARTER)

     Net sales in the second quarter of 2003 were $389.6 million compared to $370.4 million in 2002, an increase of $19.2 million or 5.2%. The sales increase was driven by strong regular-price selling of the Company’s transitional and early fall merchandise, a trend that began in early-June and continued throughout the period. In addition, the Company experienced solid markdown sales throughout its semi-annual clearance sale event, which

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began in mid-June. Operating income was $30.2 million in the second quarter of 2003 compared to $32.6 million in the second quarter of 2002, a decrease of $2.4 million or 7.4%.

     Retail store sales in the second quarter of 2003 were $339.4 million compared to $323.0 million in the second quarter of 2002, an increase of $16.4 million or 5.1%. The increase in store sales is due to sales from the 38 net new stores opened in the first half of 2003 and the 40 net non-comparable stores that were opened in the last two quarters of 2002. This was partially offset by a decline in comparable store sales of 1.7% in the second quarter of 2003. Comparable stores are those that were open for at least one full fiscal year. When a new Talbots Petites store, Talbots Woman store or Talbots Accessories & Shoes store is opened adjacent to or in close proximity to an existing comparable Misses store, such Misses store is excluded from the computation of comparable store sales for a period of 13 months so that the performance of the full Misses assortment may be properly compared. The percentage of the Company’s net sales derived from its retail stores decreased slightly to 87.1% in the second quarter of 2003 compared to 87.2% in the second quarter of 2002 due to catalog sales increasing at a greater rate than store sales.

     Catalog sales in the second quarter of 2003 were $50.2 million compared to $47.4 million in the second quarter of 2002, an increase of $2.8 million or 5.9%. Sales generated from the Company’s Internet website, www.talbots.com, are included in catalog sales. The percentage of the Company’s net sales from its catalogs and website, as a percent of total sales, increased to 12.9% in the second quarter of 2003 compared to 12.8% in the second quarter of 2002. The increase in catalog sales was due to increased customer demand and improved fulfillment rates.

     Because the Company sells a wide range of products, which by their nature are subject to constantly changing business strategies and competitive positioning, it is not possible to attribute changes in retail sales or catalog sales to specific changes in prices, changes in volume or changes in product mix.

     Cost of sales, buying and occupancy expenses increased as a percentage of net sales to 65.0% in the second quarter of 2003 from 63.6% in the second quarter of 2002 due to negative leverage on occupancy and buying costs resulting from negative comparable store sales and the additional occupancy expense primarily associated with the 38 net new stores opened in the first 26 weeks of 2003 and the 40 net non-comparable stores that opened in the last two quarters of 2002.

     Selling, general and administrative expenses as a percentage of net sales decreased to 27.3% in the second quarter of 2003, compared to 27.6% in the second quarter of 2002. Store operating expenses, as a percent of total sales, remained relatively flat. However, general corporate operating expenses declined as a percentage of sales due to continued tight management of expenses. Additionally, the Company recognized savings in catalog production and support costs associated with a planned reduction in catalog circulation.

     Interest expense, net, remained relatively flat at $0.6 million in the second quarter of

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2003 compared to $0.5 million in the second quarter of 2002. Interest expense decreased by $0.1 million to $0.6 million during the quarter ended 2003 due to lower borrowing rates and was partially offset by increased borrowing levels during the second quarter of 2003. The average borrowing rate, including interest on short-term and long-term bank borrowings, was 2.3% in the second quarter of 2003 compared to 2.8% in the second quarter of 2002. The average total debt level, including short-term and long-term bank borrowings, was $111.3 million in the second quarter of 2003 compared to $101.6 million in the second quarter of 2002. Interest income decreased by $0.1 million in the second quarter of 2003 compared to 2002 primarily due to lower invested cash balances in 2003.

     The effective tax rate for the Company was 37.5% for both the second quarter of 2003 and the second quarter of 2002.

THE TWENTY SIX WEEKS ENDED AUGUST 2, 2003 COMPARED TO THE TWENTY SIX WEEKS ENDED AUGUST 3, 2002

     Net sales in the first 26 weeks of 2003 were $784.6 million compared to $761.7 million in the first 26 weeks of 2002, an increase of $22.9 million or 3.0%. Operating income in the 26 weeks ended 2003 was $77.9 million compared to $89.4 million in the first 26 weeks of 2002, a decrease of $11.5 million or 12.9%.

     Retail store sales in the first 26 weeks of 2003 were $668.6 million compared to $644.7 million in the first 26 weeks of 2002, an increase of $23.9 million or 3.7%. The increase in store sales is due to sales from the 38 net new stores opened in the first 26 weeks of 2003 and the 40 net non-comparable stores that were opened in the last two quarters of 2002. This was partially offset by a decline in comparable store sales of 3.0% in the first 26 weeks of 2003. The percentage of the Company’s net sales derived from its retail stores increased to 85.2% in the first 26 weeks of 2003 compared to 84.6% in the first 26 weeks of 2002 due to store sales increasing while catalog sales decreased.

     Catalog sales in the first 26 weeks of 2003 were $116.0 million compared to $117.0 million in the first 26 weeks of 2002, a decrease of $1.0 million or 0.9%. This is primarily due to a $3.8 million decline in catalog sales during the first quarter of 2003. However, the increase in second quarter catalog sales largely offset the first quarter decline. The Company has continued its planned strategy of reducing catalog circulation to improve overall catalog profitability. During the first 26 weeks of 2003, the Company reduced total catalog circulation by 3.6% and catalog pages distributed by 8.4%. The combination of these actions has contributed to an increase in catalog productivity, as measured by sales per page distributed, of 7.4%. The percentage of the Company’s net sales from its catalogs and website, as a percent of total sales, decreased to 14.8% in the first 26 weeks of 2003 compared to 15.4% in the first 26 weeks of 2002.

     Cost of sales, buying and occupancy expense increased, as a percentage of net sales, to 61.6% in the first 26 weeks of 2003, compared to 60.0% in the first 26 weeks of 2002, due to

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negative leverage on occupancy and buying costs resulting from negative comparable store sales and the additional occupancy expenses primarily associated with the 38 net new stores opened in the first 26 weeks of 2003 and the 40 net non-comparable stores that opened in the last two quarters of 2002.

     Selling, general and administrative expenses increased as a percentage of net sales to 28.5% in the first 26 weeks of 2003 compared to 28.3% in the first 26 weeks of 2002. Store operating expenses, as a percent of sales, increased due to negative comparable store sales and costs associated with incremental advertising spending in the first quarter of 2003. Offsetting some of this increase was a reduction in catalog production and support costs associated with the planned reduction in catalog circulation.

     Interest expense, net, decreased by $0.1 million to $1.3 million for the first 26 weeks of 2003 compared to $1.4 million for the same period in 2002. Interest expense decreased by $0.2 million to $1.4 million due to lower borrowing rates and was partially offset by increased borrowing levels. The average borrowing rate, including interest on short-term and long-term bank borrowings, was 2.3% for the first 26 weeks of 2003 compared to 2.8% for the first 26 weeks of 2002. The average total debt level, including short-term and long-term bank borrowings, was $122.8 million in the first 26 weeks of 2003 compared to $116.4 million for the same period in 2002. Interest income remained relatively flat at $0.2 million.

     The effective tax rate for the Company was 37.5% for both the first 26 weeks ended 2003 and 2002.

LIQUIDITY AND CAPITAL RESOURCES

     The Company’s primary sources of working capital are cash flows from operating activities and a line-of-credit facility from five banks, with maximum available short-term borrowings of $125.0 million. At August 2, 2003 and August 3, 2002, the Company had no amounts outstanding under this facility. The Company also has a revolving credit facility with four banks totaling $100.0 million. At August 2, 2003 and at August 3, 2002, the Company’s borrowings under this facility were $100.0 million. Additionally, the Company has two letter-of-credit agreements totaling $200.0 million, which it uses primarily for the purchase of merchandise inventories. At August 2, 2003 and August 3, 2002, the Company had outstanding $104.9 million and $97.3 million, respectively, in purchase commitments under these letter-of-credit arrangements. The Company’s working capital needs are typically at their lowest in the spring and peak during the fall selling season.

     For the 26 weeks ended August 2, 2003, cash and cash equivalents increased $25.1 million compared to an increase of $33.4 million for the same period in 2002.

     Cash provided by operating activities decreased to $112.7 million during the first 26 weeks of 2003 from $169.1 million in the first 26 weeks of 2002. This $56.4 million decrease was primarily due to the timing of merchandise receipts and payment of merchandise

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inventories and a decline in net income and the associated income tax accruals and payments.

     Capital expenditures for the first 26 weeks of fiscal 2003 were $42.3 million compared to $50.7 million in fiscal 2002. The Company used approximately $36.7 million and $37.6 million in the first 26 weeks of fiscal 2003 and 2002, respectively, for opening new stores and expanding and renovating existing stores. For the remainder of the fiscal year, the Company currently anticipates approximately $57.0 million in additional capital expenditures for the opening of new stores and expanding and renovating existing stores and to enhance the Company’s computer information systems. The actual amount of such capital expenditures will depend on the number and type of stores being opened, expanded and renovated, and the schedule of its capital expenditure activity during the remainder of fiscal 2003.

     Cash used in financing activities totaled $46.2 million during the 26 weeks ended August 2, 2003. The Company paid cash dividends totaling $0.19 per share and repurchased $38.0 million in treasury stock. During the 26 weeks ended August 2, 2003, the Company repurchased $36.8 million, or 1,337,180 shares of its common stock under a stock repurchase program authorized by the Board of Directors in October 2002 at an average price of $27.52 per share. As of August 2, 2003, the Company had $13.2 million remaining under this authorization.

     Cash used in financing activities during the 26 weeks ended August 3, 2002 was $85.3 million. The Company paid cash dividends totaling $0.17 per share and repurchased $80.5 million in treasury stock. During the 26 weeks ended August 3, 2002, the Company purchased $79.2 million, or 2,334,352 shares, of its common stock under an earlier $50.0 million stock repurchase authorization at an average price of $33.92 per share.

     The Company’s primary ongoing cash requirements are currently expected to be for the financing of working capital buildups during peak selling seasons, capital expenditures for new stores and the expansion and renovation of existing stores and facilities, the purchase of treasury shares and the payment of any dividends that may be declared from time to time. For the next twelve to eighteen months, the Company believes its cash flows from operating activities and funds available to it under credit facilities will be sufficient to meet its capital expenditures and working capital requirements, including debt service payments.

     The payment of dividends and the amount of any dividends, if any, will be determined by the Board of Directors and will depend on many factors, including expected net income, expected cash flows from operating activities, capital requirements and general business outlook. On August 12, 2003, the Company’s Board of Directors announced a quarterly dividend of $0.10 per share payable on September 15, 2003 to shareholders of record as of September 2, 2003.

     The combination of a low interest rate environment and the poor performance of the equity markets has had an adverse impact on the funded status of the Company’s non-contributory defined benefit pension plan (the “Plan”). Although interest rates and the equity markets have begun to stabilize, management continues to monitor interest rates and Plan

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asset returns and, if required, will adjust plan assumptions accordingly. If interest rates decline, additional charges to equity and expense may be required along with cash funding.

FORWARD-LOOKING INFORMATION

     This report contains forward-looking information within the meaning of The Private Securities Litigation Reform Act of 1995. The statements may be identified by such forward-looking terminology as “expect,” “look,” “believe,” “anticipate,” “may,” “will,” or similar statements or variations of such terms. All of the Company’s “outlook” information (including future revenues, comparable sales, earnings and EPS, and other financial performance or operating measures) constitutes forward-looking information. The specialty apparel retail business is an evolving and highly competitive marketplace. The Company’s forward-looking statements are based on its current expectations, assumptions, estimates and projections about the Company including assumptions and projections concerning store traffic, levels of store sales including full price selling and customer preferences. The Company’s forward-looking statements involve material known and unknown risks and uncertainties as to future events which may or may not occur. Some of those risks and uncertainties that could cause actual results to differ materially include effectiveness of the Company’s brand awareness and marketing programs, effectiveness and profitability of new concepts including the Mens concept, effectiveness of its e-commerce site, acceptance of Talbots fashions and the Company’s ability to anticipate and successfully respond to changing customer tastes and preferences, appropriate balance of merchandise offerings, the Company’s ability to sell its merchandise at regular prices as well as its ability to successfully execute its major sale events including the timing and levels of markdowns, retail economic conditions including consumer spending, consumer confidence and a continued highly uncertain economy, and the impact of a continued highly promotional retail environment. In each case, actual results may differ materially from such forward-looking information. Certain other factors that may cause actual results to differ from such forward-looking statements are included in the Company’s Current Report on Form 8-K dated October 30, 1996 filed with the Securities and Exchange Commission (a copy of which may also be obtained from the Company at 781-741-4500) as well as other periodic reports filed by the Company with the Securities and Exchange Commission and available on the Talbots website under “Investor Relations”, and you are urged to carefully consider all such factors. In light of the substantial uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a guarantee or representation that such forward-looking matters will in fact be achieved. The Company assumes no obligation for updating or revising any such forward-looking statements to reflect actual results, changes in assumptions or changes in other factors or information affecting such forward-looking statements.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The market risk inherent in the Company’s financial instruments and in its financial position represents the potential loss arising from adverse changes in interest rates. The Company does not enter into financial instruments for trading purposes.

     At August 2, 2003, the Company had variable rate borrowings outstanding of $100.0 million under its revolving credit agreements, which approximate their fair market value.

     The Company enters into certain purchase obligations outside the United States, which are predominantly settled in U.S. dollars, and, therefore, the Company has only minimal exposure to foreign currency exchange risks. The Company does not hedge against foreign currency risks and believes that the foreign currency exchange risk is immaterial. In addition, the Company opened one store in Canada and no stores in the United Kingdom during the 26 weeks ended August 2, 2003. The Company believes its foreign currency translation risk is minimal, as a hypothetical 10% strengthening or weakening of the U.S. dollar relative to the applicable foreign currency would not materially affect the Company’s results of operations or cash flow.

Item 4. CONTROLS AND PROCEDURES

     The Company’s Chief Executive Officer and Chief Financial Officer, with the assistance of other members of the Company’s management, have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective.

     The Company’s Chief Executive Officer and Chief Financial Officer have also concluded that there have not been any changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II - OTHER INFORMATION

     ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On May 22, 2003, the Company held its Annual Meeting of Shareholders. At the Annual Meeting, the following persons were elected to serve as directors of the Company for a term of one year or until their successors are elected: Arnold B. Zetcher, Toshiji Tokiwa, Peter B. Hamilton, Elizabeth T. Kennan, Yoichi Kimura, Motoya Okada, Susan M. Swain and Isao Tsuruta. There are no other directors of the Company.

     The voting results were as follows:

	The proposal to approve the 2003 Executive Stock Based Incentive Plan: 36,469,407 votes were cast in favor of such proposal, 13,681,923 votes were cast against and 249,162 votes abstained.

	The proposal to ratify the appointment of Deloitte & Touche LLP to serve as the Company’s independent auditors for the 2003 fiscal year: 53,177,754 votes were in favor of such proposal, 831,094 votes were against and 23,354 votes abstained.

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     ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     The exhibits listed on the Exhibit Index are filed herewith in response to this Item.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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