NEW YORK (Reuters) - Women's clothing retailerTalbots Inc posted a higher-than-expected quarterlyprofit as tighter inventory management boosted margins, but itsshares fell as sales missed Wall Street forecasts.

The second-quarter results echoed those of the firstquarter, when sales suffered as the retailer did not stockenough merchandise.

The strategy of tighter inventory helps prop up profitmargins but can lead to problems if demand is heavier thananticipated.

In the second quarter, the company reduced total inventoryby 10.4 percent to $130.3 million.

"Our top-line sales performance reflects our decision toremain on plan with respect to our promotional event calendarwithin what proved to be an aggressively promotionalenvironment," Chief Executive Trudy Sullivan said.

Net profit was $941,000, or 1 cent a share, in the secondquarter, ended July 31, compared with a year-earlier net lossof $24.5 million, or 45 cents a share.

Excluding one-time items, Talbots earned 14 cents a share,beating analysts' average forecast of 5 cents, according toThomson Reuters I/B/E/S.

Sales fell 1.3 percent to $300.7 million, missing analysts'average estimate of $313.9 million.

Shares of Talbots were down 10 percent at $10.00 inpremarket trading. (Reporting by Dhanya Skariachan; additional reporting byAlexandria Sage; Editing by Lisa Von Ahn and John Wallace)