Earnings

Return to Article

Talbots Posts 1Q Loss, To Cut 20 Percent Of Jobs

The Associated Press

HINGHAM, Mass. (AP) — Talbots Inc. on Tuesday recorded a fiscal first-quarter loss amid increased charges, and said it will institute new job cuts of 20 percent as it looks to lower costs and streamline operations.

The women's apparel retailer posted a loss of 44 cents per share, or $23.6 million, for the period ended May 2. That compares with a profit of $1.6 million, or 3 cents per share, in the same period a year earlier.

Loss from continuing operations was 35 cents per share in the latest quarter. Excluding restructuring and impairment charges of 12 cents per share, loss from continuing operations was 23 cents per share.

Analysts polled by Thomson Reuters, whose estimates generally exclude one-time items, forecast a loss of 49 cents per share.

Talbots, which announced Monday that it is selling its J. Jill brand for about $75 million, said the latest round of job cuts are part of its $150 million expense reduction plan and include the elimination of open positions. The 20 percent head count reduction is expected to result in annual savings of about $21 million.

In February the retailer announced that it would cut 370 corporate-level jobs. The new cuts are on top of that.

Sales for the first quarter fell 26 percent to $306.2 million from $414.8 million as sales at stores open at least a year, or same-store sales, dropped 26.9 percent. Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

On average, analysts expected revenue of $313.2 million.

Talbots predicted a second-quarter adjusted loss from continuing operations of about 50 cents to 58 cents per share.

Analysts forecast a second-quarter loss of 68 cents per share.

Talbots operated 586 name brand stores in 47 states, the District of Columbia and Canada at the end of the first quarter.