Sales down at Talbots

Talbots Inc. said today that its same-store sales slipped 4.8 percent in its second quarter, prompting the retailer of the Talbots and J.Jill brands to say it will record a loss for the period.

Same-store sales, or sales at stores open at least a year, is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

For the quarter ended Aug. 4, the company said same-store sales fell 4.9 percent at the Talbots brand and 4.3 percent at J.Jill due mainly to weak performance in June and July.

Total sales at the company for the quarter, meanwhile, rose 0.2 percent to $572 million from $571 million in the 2006 first quarter.

But the rise was not enough to meet Wall Street's expectations. Analysts polled by Thomson Financial expected second quarter sales of $597.7 million.

Talbots said it expects a second quarter loss between 25 cents per share and 27 cents per share due to J.Jill brand operations and acquisition-related and financing costs.

Analysts expect a profit of 2 cents per share.

Talbots said customer traffic fell significantly at both of its brands during the quarter and customers failed to respond to spring and summer merchandise.

"In light of the much publicized uncertainty in the macro environment, the company believes that its customers have become increasingly more discriminating regarding their discretionary spending," Talbots said.

Talbots said for its third quarter, it expects same-store sales to be flat with last year, with earnings per share in the range of 42 cents to 48 cents.

Analysts expect earnings per share of 28 cents for the third quarter. (AP)