Wednesday, specialty retailer Talbots, Inc. (TLB) said its second-quarter net loss narrowed slightly from a year ago, as costs decreased from the previous year. Both net sales and comparable store sales for the second quarter declined from the previous year, as the uncertain economy continues to discourage non-discretionary spending. Looking forward, the company expects to report a loss from continuing operations in the third quarter.
The Hingham, Massachusetts-based company reported a second-quarter net loss of $24.49 million or $0.45 per share, compared to a net loss of $25.01 million or $0.47 per share reported last year.
Net loss from continuing operations widened to $20.48 million or $0.38 per share from last year's $11.95 million or $0.22 per share.
Recent quarter results included restructuring and impairment charges of $2.9 million or $0.05 per share. Results of the previous year included restructuring and impairment charges of $2.5 million or $0.05 per share.
The company's adjusted net loss from continuing operations was $17.6 million or $0.33 per share, in comparison with a net loss of $9.4 million or $0.17 per share in the prior-year quarter. The company's guidance was for a quarterly loss per share of $0.50 to $0.58.
On average, eight analysts polled by Thomson Reuters expected a loss of $0.52 per share for the quarter. Analysts' estimate typically excludes one-time items.
Loss from discontinued operations were $4.00 million compared to $13.06 million in the previous year.
Net sales for the quarter dropped to $304.64 million from $395.21 million in the previous year. Analysts were looking for sales of $309.34 million.
Retail store sales slipped to $254.8 million from $334.3 million reported last year. Direct marketing sales, including catalog and Internet, declined to $49.8 million from $60.9 million reported last year. Comparable store sales dropped 24.9% for the thirteen week period.
Among others in the industry, AnnTaylor Stores Corp. (ANN) last month reported a second-quarter net loss of $18 million or $0.32 per share, compared to profit of $29.25 million or $0.50 per share reported a year ago. Ann Taylor's quarterly net sales were $470.23 million, lower than last year's $592.32 million. Comparable store sales declined 22.5%.
Talbots said today that pure merchandise gross margin increased 230 basis points from last year, primarily due to improved sourcing business practices and strong inventory management.
Cost of sales dropped to $220.24 million from $278.50 million, while selling, general and administrative expenses declined to $94.88 million from $124.89 million in the previous year.
According to Trudy Sullivan, Talbots' President and Chief Executive Officer, "We ended the second quarter with a substantial reduction in operating expenses and a solid increase in merchandise margin, all of which contributed to a significantly better-than-expected bottom line performance. We are especially pleased with our inventory position as we enter the third quarter."
Early last month, FBR Capital Markets upgraded shares of Talbots to ''Outperform'' from ''Market Perform'' and increased its price target to $7 from $5. The brokerage also narrowed its 2009 second quarter loss per share estimate to $0.50 from $0.53. Analyst Adrienne Tennant upgraded the stock based on inventory and SG&A control that should help drive earnings, compelling risk/reward, conservative consensus estimates, and a value-oriented investor base. The analyst's store checks showed ongoing tight inventory control and more efficient use of promotions and markdowns to continuously move products, the firm noted.
For the first quarter of the fiscal year, the company reported a net loss of $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. Quarterly net sales dropped to $306.2 million from $414.8 million in the previous year.
For the first half of the year, net loss widened to $48.05 million or $0.89 per share from $23.37 million or $0.44 per share in the prior year. Net sales dropped to $610.82 million from $809.98 million in the previous year.
Looking ahead, the company currently expects to report a loss from continuing operations in the third quarter of about $0.24 to $0.30 per share, excluding restructuring and impairment charges. This projection is based on a top-line sales decline estimate in the range of about 14% - 17%. Wall Street analysts forecast a loss of $0.31 per share for the third quarter.
TLB is currently trading at $7.35, up $0.24 or 3.38%, on 504,484 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.