I've had a hard time seeing a good investing case for Talbots (NYSE:TLB) for quite some time, and its first-quarter earnings report didn't give me reason to change my mind. Wednesday's dismal earnings report from the retailer gave more reason to wonder why more people didn't see this coming.

Talbots' first-quarter net income -- which didn't include the recently completed J. Jill acquisition -- dropped 21% to $27.4 million, or $0.51 per share, including $0.03 per share in stock option expenses. Sales increased 1% to $453 million, and same-store sales squeaked 0.9% higher.

As for those same-store sales figures, when Talbots announced April sales data, it said it will no longer report monthly same-store sales or break out sales data by brand. The company's excuse is that this is a "growing industry practice" for multibrand retailers, but retailers that don't release monthly same-store sales figures are actually the exception, not the rule. Given that same-store sales data helps investors gauge retailers' health, this seems like a shameful move to me, especially considering that Talbots and the newly acquired J. Jill have had a lot to prove, fashion-wise, over the last year or so.

Talbots warned investors to gear up for a frumpy second quarter. The company anticipates a second-quarter loss of $0.05 to $0.15 per share, precipitously lower than the $0.35 per share earnings analysts were expecting.

To harp on one more issue, Talbots' free cash flow dropped precipitously in the first quarter. Last year this time, Talbots reported $22.2 million in free cash flow. That figure is now in negative territory, having dropped 117%. Don't let cash on the balance sheet fool you, either. The $400 million in restricted cash is what Talbots borrowed to pay for the acquisition of J. Jill, so of course, Talbots now has debt to contend with, too.

Several of us Fools were extremely leery of Talbots' acquisition of J. Jill (here's one Take on the matter). After all, both retailers had struggled with customer traffic as they dealt with tough rivals also trying to lure the mature female demographic -- think Chico's (NASDAQ:CHS), Coldwater Creek (NASDAQ:CWTR), Ann Taylor (NYSE:ANN), and Gap (NYSE:GPS). Talbots said sales are still soft at J. Jill, and who's surprised? Expect increased markdowns on Talbots merchandise in the second quarter, too.

Last year, I often shook my head when it seemed like investors bid up shares of Talbots for some unknown reason. Just a month ago, I questioned one element of Talbots' post-acquisition strategy. Talbots' shares carved a new 52-week low at one point today. Apparently, some investors are starting to catch on to something that others of us have considered fairly apparent -- this retailer's got an uphill battle on its hands.

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Alyce Lomax does not own shares of any of the companies mentioned.