The Children's Place Reports 2005 Third Quarter Financial Results; Third Quarter Earnings Per Share of $1.02; Earnings Per Share Before Extraordinary Gain Increased 48% to $0.96 vs. $0.65 Last Year
Company Now Anticipates Fiscal 2005 Earnings Per Share of $2.35 to $2.40
SECAUCUS, N.J.--(BUSINESS WIRE)--Nov. 17, 2005-- The Children's Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial results for the third quarter and nine months ended October 29, 2005.
Third Quarter
- Net sales for the third quarter increased 57% to $441.1 million, compared to $280.5 million last year. Third quarter sales were comprised of $320.0 million from The Children's Place, a 14% increase over last year, and $121.1 million in sales from Disney Store.
- Comparable store sales increased 6% in the quarter, versus an 18% increase last year.
- Net income was $29.3 million, compared to net income of $17.7 million last year.
- Diluted earnings per share were $1.02. Diluted earnings per share before extraordinary gain increased 48% to $0.96, compared to $0.65 last year. Third quarter earnings included an extraordinary gain of $1.7 million, or $0.06 per share, related to the completion of purchase accounting for the Disney Store acquisition in November 2004. Also, third quarter earnings reflect a lower effective tax rate than previously anticipated.
- The Company opened 19 Children's Place stores and closed one store during the third quarter. In addition, the Company opened 13 Disney Stores during the third quarter.
Nine-Month Period
- Net sales for the nine-month period increased 62% to $1,129.0 million, from $695.4 million for the same period in 2004. Sales for the nine-month period were comprised of $815.9 million from The Children's Place, a 17% increase over last year, and $313.1 million in sales from the Company's Disney Store business.
- Comparable store sales increased 8% for the period, compared to a 15% increase for the same period last year.
- Net income was $21.2 million, compared to net income of $19.3 million in the year-ago period.
- Diluted earnings per share were $0.74 compared to diluted earnings per share of $0.70 in the 2004 period. Nine-month net income and earnings per share results include the above referenced extraordinary gain and change in effective tax rate.
- The Company opened 39 Children's Place stores during the nine-month period, and closed three. In addition, the Company opened 15 Disney Stores and closed one.
"I am proud of our third quarter results and the increased profitability of our brands," said Ezra Dabah, Chairman and Chief Executive Officer of The Children's Place. "Over the past year, The Children's Place has further established itself as a leading children's specialty retailer, while we have simultaneously achieved the goals and objectives we set for the Disney Store acquisition. We are confident that we have the right strategies in place to continue to gain market share, grow profitably and drive a successful Holiday season."
The Company stated that it continues to anticipate fourth quarter earnings per share of $1.61 to $1.66 including an anticipated charge of approximately $2 million due to the American Jobs Creation Act. The Company also stated that it now anticipates full year fiscal 2005 earnings of $2.35 to $2.40 per share, reflecting the extraordinary gain realized in the third quarter and a lower expected annual effective tax rate of 38% from 39%.
The Children's Place will host a webcast of its third quarter conference call today at 9:00 a.m., Eastern Time. Interested parties are invited to listen to the call at the Company's web site, www.childrensplace.com. An archive of the webcast will be available on the site through Thursday, November 24, 2005.
The Children's Place Retail Stores, Inc., is a leading specialty retailer of children's merchandise. The Company designs, contracts to manufacture and sells high-quality, value-priced merchandise under the proprietary "The Children's Place" and licensed "Disney Store" brand names. As of October 29, 2005, the Company owned and operated 786 The Children's Place stores and 321 Disney Stores in North America and its online store, www.childrensplace.com.
This press release and above referenced call may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. Actual results, events, and performance may differ. Readers or listeners (on the call) are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by The Children's Place or any other person that the events or circumstances described in such statement are material.
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: 39 Weeks Ended:
October 29, October 30, October 29, October 30,
2005 2004 2005 2004
------------------------------------------------
(Restated) (Restated)
Net sales $441,051 $ 280,496 $ 1,129,018 $ 695,440
Cost of sales 255,883 164,000 703,245 424,022
-------- --------- ----------- ---------
Gross profit 185,168 116,496 425,773 271,418
Selling, general and
administrative
expenses 128,492 74,016 356,609 200,934
Depreciation and
amortization 13,822 13,000 39,968 38,452
-------- --------- ----------- ---------
Operating income 42,854 29,480 29,196 32,032
Interest (income)
expense, net 139 (48) (291) (154)
-------- --------- ----------- ---------
Income before income
taxes and
extraordinary gain 42,715 29,528 29,487 32,186
Provision for income
taxes 15,126 11,845 9,967 12,882
-------- --------- ----------- ---------
Income before
extraordinary gain 27,589 17,683 19,520 19,304
Extraordinary gain,
net of taxes 1,665 0 1,665 0
-------- --------- ----------- ---------
Net income $ 29,254 $ 17,683 $ 21,185 $ 19,304
======== ========= =========== =========
Basic net income per
common share before
extraordinary gain $ 0.99 $ 0.66 $ 0.71 $ 0.72
Extraordinary gain,
net of taxes 0.06 0.00 0.06 0.00
-------- --------- ----------- ---------
Basic net income per
common share $ 1.05 $ 0.66 $ 0.77 $ 0.72
======== ========= =========== =========
Basic weighted average
common shares
outstanding 27,740 26,928 27,602 26,867
Diluted net income per
common share before
extraordinary gain $ 0.96 $ 0.65 $ 0.68 $ 0.70
Extraordinary gain,
net of taxes 0.06 0.00 0.06 0.00
-------- --------- ----------- ---------
Diluted net income per
common share $ 1.02 $ 0.65 $ 0.74 $ 0.70
======== ========= =========== =========
Diluted weighted
average common shares
and common share
equivalents
outstanding 28,736 27,393 28,794 27,475
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 29, January 29, October 30,
2005 2005 2004
----------- ---------- ----------
(Restated)
Current assets:
Cash and investments $ 122,428 $ 165,196 $ 45,344
Accounts receivable 26,702 23,987 14,249
Inventories 261,160 161,969 143,367
Other current assets 54,809 41,007 23,588
--------- --------- ---------
Total current assets 465,099 392,159 226,548
Property and equipment, net 237,467 222,722 221,410
Other assets, net 14,518 12,507 15,883
--------- --------- ---------
Total assets $ 717,084 $ 627,388 $ 463,841
========= ========= =========
Current liabilities:
Revolving credit facility $ 55,299 $ 37,268 $ 0
Accounts payable 87,282 78,106 40,721
Accrued expenses and other
current liabilities 98,825 99,575 56,203
--------- --------- ---------
Total current liabilities 241,406 214,949 96,924
Other liabilities 125,324 100,776 85,881
--------- --------- ---------
Total liabilities 366,730 315,725 182,805
Stockholders' equity 350,354 311,663 281,036
--------- --------- ---------
Total liabilities and
stockholders' equity $ 717,084 $ 627,388 $ 463,841
========= ========= =========
THE CHILDREN'S PLACE RETAIL STORES, INC.
SEGMENT INFORMATION
(In millions)
(Unaudited)
Thirteen Weeks Ended October 29, 2005
-----------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- --------- --------- ---------
Net sales $ 320.0 $ 121.1 $ - $ 441.1
Segment operating profit
(loss) 54.4 3.3 (14.8) 42.9
Operating profit (loss) as
a percent of net sales 17.0% 2.7% N/A 9.7%
Thirty-Nine Weeks Ended October 29, 2005
-----------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- -------- -------- -----------
Net sales $ 815.9 $ 313.1 $ - $ 1,129.0
Segment operating profit
(loss) 94.2 (20.6) (44.4) 29.2
Operating profit (loss) as
a percent of net sales 11.5% (6.6)% N/A 2.6%
CONTACT: The Children's Place
Hiten Patel, 201-902-2177
or
Heather Anthony, 201-558-2865
SOURCE: The Children's Place Retail Stores, Inc.