Talbots Inc. swung into a loss in the third quarter, hurt by acquisition and financing costs.
The specialty retailer said that, for the three months ended Nov. 3, it posted a loss of $9.4 million, or 18 cents a diluted share, compared with income of $8.1 million, or 15 cents, in the year-ago period. Results include acquisition-related and financing costs of 8 cents a share in connection with its purchase of J. Jill, and about 6 cents related to executive compensation costs and professional consulting fees.
Analysts expected a loss of 23 cents a share, based on the company’s lowered guidance of a loss forecast at between 20 and 25 cents a share.
Sales for the third quarter dropped 2.2 percent to $556 million from $568.6 million, and total company same-store sales declined 7.9 percent. By brand, same-store sales for Talbots fell 8.2 percent, and for J. Jill they declined 6.5 percent.
For the nine-month period, the company reported a loss of $17.5 million, or 33 cents a diluted share, from a profit of $31.6 million, or 59 cents, last year. Sales increased 6.8 percent to $1.7 billion from $1.59 billion.
“We have taken a number of immediate actions to improve our business performance,” Trudy Sullivan, president and chief executive officer, said in a statement. “Specifically, we have revamped our marketing approach by increasing the frequency of customer contact and offerings, as well as implemented a new promotional markdown cadence for the Talbots brand.”
The retailer said it remains cautious about the holiday season, and reconfirmed a previously forecast fourth-quarter loss of 5 to 10 cents a diluted share.