Talbots Inc. predicted that its fourth-quarter loss from continuing operations will come in well below analysts' consensus forecast on Thursday and said the women's clothing retailer may take an impairment charge.
Analysts surveyed by Thomson Reuters, who generally exclude discontinued operations, forecast a fourth-quarter loss of 32 cents per share.
Talbots updated its guidance at the same time it reported that same-store sales tumbled 24.6 percent during the quarter. Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance because they measure growth at existing stores rather than newly opened ones.
The company also announced 370 job cuts as part of a new $150 million cost-cutting program said that its majority shareholder has agreed to provide the retailer with a $200 million term loan.
Talbots said it is also testing its Talbots and J. Jill brand intangible assets for impairment. The company said its updated fourth-quarter guidance does not include any impairment or restructuring charges.
"We are planning very conservatively for fiscal 2009 and at this time expect little to no improvement in the economic climate for the first half of the year," said President and Chief Executive Trudy F. Sullivan in a statement. "While there are significant challenges that lie ahead for all retailers, we remain confident that the actions we have and continue to take are the appropriate measures for the long-term growth, profitability and value of our business."
Talbots plans to report fourth-quarter and full-year fiscal 2008 results on March 12.
Talbots shares jumped 17 cents, or 8.1 percent, to $2.18 in midday trading. The stock has traded between $1.19 and $17.97 during the past 52 weeks.