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Talbots Tops Lowered Views

Shares have an early rally before giving back ground.
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investors breathed a sigh of relief Tuesday after the clothing retailer didn't lose quite as much as it had predicted last month.

The Hingham, Mass.-based company posted a fiscal third-quarter loss of $9.4 million, or 18 cents a share, reversing a year-ago profit of $8.1 million, or 15 cents a share.

While the results show a marked deterioration as Talbots grapples with

merchandise missteps and lackluster demand, they were better than the company's recently slashed outlook. In October, Talbots forecast a loss of 20 cents to 25 cents a share, and the company reiterated that projection earlier this month.

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Chief Executive Trudy Sullivan attributed the narrower-than-expected loss to tight expense controls and better-than-anticipated results from the company's smaller J. Jill chain.

Analysts polled by Thomson Financial were looking for a per-share loss of 23 cents. Talbots' results include 8 cents' worth of acquisition-related and financing costs, as well as 6 cents in one-time executive compensation and professional consulting fees.

Shares of Talbots rose as much as 12% Tuesday before giving back ground. The stock recently was up 10 cents, or 0.8%, to $13.28.

As previously reported, Talbots' total sales dipped 2.2% from last year to $556 million amid revenue declines at its namesake brand. Same-store sales, or sales at locations open for more than a year, slid 7.9% from a year earlier.

Same-store sales at the Talbots brand slid 8.2%, while the J. Jill chain recorded a 6.5% decline.

In a bid to improve results for the current quarter, Sullivan said the company is now engaging in "a number of immediate actions" that include a more aggressive marketing approach.

Still, amid a persisting "difficult macro-environment," Talbots reiterated the sharply lowered fourth-quarter guidance that it set last month. It continues to expect a loss of 5 cents to 10 cents a share, with same-store sales projected to decline in the mid-single digits.