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Thursday May 8, 8:26 PM
Talbots 1st-qtr same-store sales fall 9.8 pctCHICAGO, May 8 (Reuters) - Talbots Inc on Thursday said first-quarter sales at stores open at least a year fell 9.8 percent and the women's clothing retailer reconfirmed its 2008 profit outlook. The Hingham, Massachusetts-based company also said it is in discussions with financial institutions to increase its working capital line of credit and it expects to be in compliance with all covenants of its acquisition term loan agreement for the first quarter.
Last month, Talbots confirmed its 2008 profit outlook and said meeting that goal would give it sufficient funding to continue turning around its business. That statement came two days after it disclosed Bank of America and Hongkong Shanghai Banking Corp would stop providing letters of credit, which were used to back financing for merchandise bought overseas. Talbots, which is majority owned by Japan's Aeon Co Ltd , said sales in the 13 weeks that ended May 3 fell 5.6 percent from last year to $542 million, softer than the company had expected. By brand, retail sales at Talbots fell 4.6 percent to $436 million, while J. Jill declined 9.4 percent to $106 million. Same-store sales at the Talbots brand fell 7.4 percent in the quarter, while the J. Jill brand same-store sales dropped 20.2 percent. Citing improved gross profit margins, Talbots also reconfirmed its outlook for 2008 earnings from continuing operations in the range of 47 to 52 cents a share. That forecast excludes Talbots Kids, Mens and British businesses, which the company expects to finish closing in the third quarter. It expects a loss from discontinued operations of 59 to 64 cents a share, for a total loss of 7 to 17 cents a share. (Reporting by Ben Klayman; Editing by Maureen Bavdek)
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