Talbots says 2Q comps hurt by slow traffic

HINGHAM, Mass. Talbots Thursday announced total company sales for the 13 weeks ended Aug. 4 of $572 million, versus last year's reported sales of $571 million. Total company comparable-store sales declined 4.8% for the 13-week period, which was primarily due to a weak June and a particularly difficult July for both the Talbots and J. Jill brands.

Year-to-date sales for the 26 weeks ended Aug. 4 increased 11.7% to $1.1 billion from $1.02 billion reported for the 26 weeks ended July 29, 2006. Total company comparable-store sales declined 4.1% for the six-month period.

The company currently expects a consolidated second quarter loss per diluted share to be in the range of 25 cents to 27 cents. Although Talbots brand second quarter was difficult, virtually all of this anticipated loss is due to J. Jill brand operations and acquisition-related and financing costs. This anticipated second quarter loss per diluted share in the range of 25 cents to 27 cents, compares to a 7 cents loss per diluted share reported in the same period last year.

The company attributes its disappointing second quarter performance to negative comps at both the Talbots and J. Jill brands, resulting from a lack of positive customer response to their spring and summer assortments, as well as a significant decline in customer traffic. In light of the much publicized uncertainty in the macro environment, the company believes that its customers have become increasingly more discriminating regarding their discretionary spending.

On a consolidated basis, the company is targeting second half comparable-store sales to be approximately flat with last year. If achieved, this sales plan would yield earnings per share in the range of 42 cents to 48 cents, compared to last year's reported 15 cents.