• Adjusted Q3 net income US$17.2m
  • Sales down 13.5% to $308.9m
  • Forecasts Q4 loss per share of $0.06-0.14

Women's wear retailer The Talbots returned to profitability in its third quarter, thanks to a tight control on costs and expenses.

The adjusted net profit of US$17.2m, excluding restructuring and impairment charges, compared with a loss of $12.4m in the same period last year.

But sales fell 13.5% to $308.9m - slightly above the company's expectations - thanks to lower levels of markdown merchandise resulting in a 38% decline in markdown sales.

Retail sales were down 15.8% to $225.4m, with comparable store sales falling 15.9%, but direct sales held steady at $53.5m, only marginally down on last year.

For the first nine months of the fiscal year, the retailer posted an adjusted net loss of $12.8m, compared to breakeven last year.

Sales fell 21.2% to $919.7m, and retail sales dropped 22% to $766.7m, with comparable store sales declining 22.8%.

The Talbots president and CEO Trudy Sullivan said the results demonstrated "tremendous operational discipline".

She added: "The efforts over the past several quarters - particularly in the areas of strengthening our merchandise offering and tightly managing inventory and expense - have created a much stronger, leaner and profitable organisation."

The company is forecasting a fourth quarter adjusted loss per share of $0.06-0.14, based on a sales decline of 6-8%.