US: Talbots swings to $171m Q4 loss on charges
Women's wear retailer The Talbots Inc today (12 March) posted a fourth quarter loss, although its adjusted results and fiscal outlook managed to beat expectations.
For the three months to 3 February, the Hingham, Massachusetts-based company said its net loss was $171m or $3.23, versus a breakeven net income per share in the same period last year.
However, excluding charges of $144m, or approximately $2.71 per share, to write down assets related its J Jill brand, as well as the cost of closing its Talbots Kids and Mens businesses, the company said fourth quarter loss was $12m or ($0.22) per share.
Total sales for the quarter were down 8% to $587m from $638m.
By brand, retail store sales were down 10.4% to $388m at Talbots, and fell 5.5% to $86m at J Jill.
Same-store sales dropped 6.0%, with declines of 6.0% and 6.3% respectively at Talbots and J Jill.
For the full fiscal year, net loss was $189m or $3.56 per share, versus $0.59 per share for the previous 12 months.
Annual sales were up 2.6% to $2,289m from $2,231m. By brand, retail store sales fell 4.4% to $1,534m for Talbots, and rose 35.1% to $327m for J Jill.
Comparable store sales declined 5.5%, with Talbots decreasing 5.7% and J Jill down 4.6%.
Trudy F Sullivan, Talbots president and chief executive officer, said that although 2007 was a difficult year, "we feel very good about the progress we have made, and believe we are well-positioned to succeed in 2008."
For fiscal 2008, the company sees top line sales growth of approximately 3%, with the Talbots brand decreasing 1% and the J Jill brand increasing 1% compared to fiscal 2007.
The company has slowed its square footage growth and will open 27 Talbots brand stores and 19 J Jill brand stores for a total of 46 new stores in fiscal 2008, versus 75 new store openings in fiscal 2007.
It also expects to close around 20 underperforming Talbots stores in addition to the 78 Talbots Kids and Mens closings previously announced.
Earnings from continuing operations for 2008 are seen to be in the range of $0.47 to $0.52 per diluted share, which compares to a loss of $0.37 per share in 2007.
Last October Talbots said it was conducting a strategic review to turn around its business, including reducing costs and revamping its merchandise.
The company currently operates 1,149 stores under the Talbots name and 273 stores under the J Jill brand, both of which target women aged 35 and over.
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