Talbots sees 2Q loss widen

HINGHAM, Mass. Talbots Inc. today announced a net loss of $13.3 million or 25 cents per share for the second quarter ended Aug. 4 and includes acquisition related and financing costs of approximately 10 cents per share. This result compares to a net loss of $3.9 million or 7 cents per share for the same period last year, which included acquisition related and financing costs of approximately 14 cents per share.

Total consolidated company sales for the 13-week period were $572 million. By brand, retail store sales were $392 million for Talbots compared to $404 million last year, and were $80 million for J. Jill compared to $73 million last year.

Total company comparable-store sales declined 4.8% for the second quarter. By brand, comparable-store sales for the 13-week period decreased 4.9% for Talbots and declined 4.3% for J. Jill.

Arnold Zetcher, Talbots chairman, commented, "We are clearly disappointed in our second quarter performance, which reflected in part a weak customer response to our spring and summer assortments at both brands. Although we experienced a modest increase in transactions in the quarter, the increase was more than offset by a decline in average transaction value, resulting in negative comparable-store sales. We also believe that our business was affected by a shift in consumer sentiment, given the significant uncertainty in the macro environment, which led to lower levels of regular price selling."

For the six-month period ended Aug. 4, total consolidated company net loss was $8.1 million or 15 cents per share, and includes acquisition related and financing costs of approximately 23 cents per share. This result compares to net income of $23.5 million or 44 cents per share for the same period last year, which included acquisition related and financing costs of approximately 16 cents per share.

Total consolidated company sales were $1.15 billion for the first half of the year. By brand, retail sales were $779 million for Talbots and $161 million for J. Jill.

Total company comparable-store sales declined 4.1% for the six-month period. By brand, comparable-store sales for Talbots decreased 4.4% and J. Jill's comparable-store sales declined 2.7%.

"In terms of our financial outlook for Talbots Inc., as previously announced, we are currently targeting consolidated comparable-store sales in the second half of 2007 to be approximately flat with last year, which would result in earnings per share in the range of 42 cents to 48 cents, compared to 15 cents last year," said Zetcher.