Tuesday, Apparel retailer Talbots Inc. (TLB) posted a first-quarter loss compared to a profit last year, and said it would reduce corporate headcount across all locations by about 20%. Looking forward, the company expects a loss for the second quarter and also stated it continues to try and manage its business conservatively.
Like many other retailers, Talbots is reeling under the financial tornado, as budget-conscious shoppers continue to restrain from lithe spending and shifted their focus on discounts and necessities in an effort to muddle through the recession. Q1 Results
The Hingham, Massachusetts-based company's first-quarter net loss was $23.6 million or $0.44 per share, compared to a profit of $1.64 million or $0.03 per share in the prior-year quarter.
Net loss from continuing operations for the latest quarter totaled $18.8 million or $0.35 per share, compared to a profit of $18.5 million or $0.35 per share in the same quarter of last year.
The latest quarter results included restructuring and impairment charges of $6.4 million or $0.12 per share, and the prior year results encompassed restructuring and impairment charges of $3.8 million or $0.07 per share. Also included in the first quarter net loss from continuing operations is a tax benefit in the amount of $10.6 million or $0.20 per share.
Net loss from continuing operations excluding restructuring and impairment charges, but including the tax benefit, was $12.4 million or $0.23 per share, compared to a profit of $22.3 million or $0.42 per share in the year-ago quarter.
On average, eight analysts polled by Thomson Reuters expected the company to post a loss of $0.49 per share. Analysts' estimates typically exclude special items.
Quarterly net sales dropped to $306.2 million from $414.8 million reported the comparable quarter of the previous year. Wall Street analysts had a consensus revenue estimate of $313.23 million for the quarter.
Retail store sales for the recent quarter were $256.4 million, down from $345.1 million last year. Comparable store sales declined 26.9% for the latest quarter.
Direct marketing sales for the first quarter of 2009 were $49.8 million, including catalog and Internet, compared to $69.7 million last year.
The company noted that as part of its strategic long-range plan to streamline operations and rationalize its cost structure, it has taken additional actions to reduce its corporate headcount, moving the company closer to achieving its goal of $150 million in expense savings.
Trudy Sullivan, President and Chief Executive Officer of Talbots, said, "We are making steady progress in implementing our strategic initiatives to better position our company for long-term success. This includes the announced signing of an asset sale agreement for J Jill, the opening of eight upscale outlet stores, and additional actions that will further contribute to achieving our goal of $150 million in annualized cost reduction."
Expense Reduction Program
As part of its $150 million expense reduction program, Talbots is further reducing corporate headcount across all locations by about 20%, including the elimination of open positions, for an annualized savings of about $21 million. Net expense related to the reduction is about $5.4 million. As a result, the company has now identified $125 million of annualized cost reductions, an increase from the $100 million the company announced in April.
Q2 Forecast
Looking ahead, the company expects to incur a loss from continuing operations of between $0.50 and $0.58 per share, excluding any restructuring and impairment charges, for the second quarter. Analysts are expecting a loss of $0.68 per share for the second quarter.
Peer Performance
Among Talbots' peers, AnnTaylor Stores Corp. (ANN) incurred a first-quarter loss of $2.31 million or $0.04 per share, compared to a profit of $25.90 million or $0.43 per share in the prior-year quarter, hurt by a 28% decline in quarterly sales that totaled $426.75 million, compared to $591.66 million in the previous year.
Meanwhile, Chico's FAS Inc. (CHS) posted a 14% growth in first-quarter profit that amounted to $14.49 million or $0.08 per share, compared to $12.73 million or $0.07 per share in the year-ago quarter. Net sales for the quarter were up 0.2% to $410.64 million from $409.56 million in the same quarter of last year.
Stock Quotes
Talbots shares, which have been upgraded to Outperform from Market Perform by Friedman, Billings, Ramsey in mid-May, is currently trading at $5.20, up 20 cents or 4.00%.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.