Talbots reports decreasing sales in Q3
The Talbots Inc. reported results for the third quarter and commented on key initiatives and actions as well as fourth quarter 2011.
Third quarter loss from continuing operations was $22.1 million, or $0.32 per share, compared to last year's income from continuing operations of $17.0 million, or $0.24 per share.
Adjusted third quarter loss from continuing operations was $15.5 million, or $0.22 per share, excluding special items of $6.6 million, or $0.10 per share, compared to last year's adjusted income from continuing operations of $18.7 million, or $0.27 per share.
Trudy F. Sullivan, Talbots President and Chief Executive Officer, commented, “While we are not satisfied with our performance, we believe the modifications we are making to our merchandise assortment are better resonating with our core customer, which is consistent with the results of our most recent consumer research studies. Stronger product combined with a more aggressive promotional strategy, including the acceleration of a fall seasonal sale, drove improved customer traffic, conversion and sales trends in each month of the quarter, generating positive comparable store sales and consolidated comparable sales in October.”
“While November consolidated comparable sales decreased approximately 4.0%, we experienced a strong Black Friday and Cyber Monday and have seen improved customer traffic and strong conversion thus far in the fourth quarter. Given changes to our promotional cadence, if we view October and November on a combined basis, consolidated comparable sales were approximately flat, which is a significant improvement compared to the prior eight month period. We expect the holiday season to remain challenging and highly promotional, and we will continue to respond accordingly. ”
“Going forward, we are focused on product execution, aggressive inventory management, the completion of our new $50 million annualized cost reduction initiative and the ongoing implementation of our store reimage and store rationalization programs as well as the expansion of our upscale outlet business,” concluded Ms. Sullivan.
Third Quarter 2011 Operating Results:
• Operating loss was $18.1 million, compared to prior year's operating income of $19.8 million.
• Adjusted operating loss, excluding special items of $6.6 million, was $11.5 million, a decrease of $33.0 million, compared to prior year's adjusted operating income of $21.5 million.
• Net sales decreased 6.6% to $279.5 million, compared to $299.1 million in the same period last year.
• Consolidated comparable sales decreased 4.0%, which includes Internet, catalog and red-line sales. With sales trends improving in each month of the quarter, October consolidated comparable sales increased 3.6%. Consolidated comparable sales exclude stores scheduled to close under the Company's store rationalization plan.
• Store sales decreased 5.1% to $229.8 million, compared to $242.1 million in the same period last year. Comparable store sales decreased 2.4% in the third quarter of 2011, excluding stores scheduled to close under the Company's store rationalization plan. October comparable store sales increased 8.2%.