UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): May 20, 2010
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
Name of Registrants as Specified in Their Charters)
Delaware
(State or
Other Jurisdiction of Incorporation)
|
0-23071
|
31-1241495
|
| (Commission File Number) | (IRS Employer Identification No.) |
| 500 Plaza Drive, Secaucus, New Jersey | 07094 |
| (Address of Principal Executive Offices) | (Zip Code) |
(201)
558-2400
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results
of Operations and Financial Condition.
On May
20, 2010, The Children’s Place Retail Stores, Inc. (the “Company”) issued a
press release containing the Company's financial results for the first quarter
of the fiscal year ended January 29, 2011 (“Fiscal 2010”), updating its
estimated range of earnings per diluted share from continuing operations for
Fiscal 2010 and providing a preliminary estimated range of loss per share from
continuing operations for the second quarter of Fiscal 2010. A copy
of the press release is being furnished as Exhibit 99.1 to this Current Report
on Form 8-K.
The information in this report is being
furnished pursuant to Item 2.02 of Form 8-K, insofar as it discloses historical
information regarding the Company’s results of operations and financial
condition as of and for the first quarter of Fiscal 2010. In
accordance with General Instructions B.2 of Form 8-K, the information in this
Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liability of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act except as shall be
expressly set forth by specific reference in such a filing.
Forward Looking
Statements
This Current Report on Form 8-K,
including Exhibit 99.1, contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements typically are identified by use of
terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,”
“estimate” and similar words, although some forward-looking statements are
expressed differently. Forward-looking statements represent the
Company’s management’s judgment regarding future events. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, the Company can give no assurance that such
expectations will prove to be correct. All statements other than
statements of historical fact included in this Current Report on Form 8-K are
forward-looking statements. The Company cannot guarantee the accuracy
of the forward-looking statements, and you should be aware that the Company’s
actual results could differ materially from those contained in the
forward-looking statements due to a number of factors, including the statements
under the heading “Risk Factors” contained in the Company’s filings with the
Securities and Exchange Commission.
Item
9.01 Financial
Statement and Exhibits.
| (d) | Exhibits | |
|
Exhibit 99.1
|
Press
release, dated May 20, 2010, issued by the Company (Exhibit 99.1 is
furnished as part of this Current Report on Form
8-K).
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: May
20, 2010
| THE CHILDREN’S PLACE RETAIL STORES, INC. | |||
|
|
By:
|
/s/ Susan J. Riley | |
| Name: Susan J. Riley | |||
| Title: Executive Vice President, Finance and Administration | |||
Exhibit
99.1
FOR IMMEDIATE
RELEASE
THE
CHILDREN’S PLACE REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
Achieves
Record First Quarter Net Income
Management
Raises Fiscal 2010 Earnings Guidance
Secaucus, New Jersey – May 20, 2010 –
The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE), the largest pure-play
children’s specialty apparel retailer in North America, today announced record
first quarter net income from continuing operations of $28.0 million, or $1.00
per diluted share for the thirteen-week period ended May 1, 2010, compared to
$23.7 million, or $0.80 per share in the first quarter of 2009.
Net sales
increased 5.0% to $422.1 million in the first quarter of 2010, compared to
$401.9 in the first quarter of 2009. Comparable retail sales, which include
online sales, declined 0.5% in the first quarter of fiscal 2010 compared to a
1.0% increase the previous year. During the first quarter of 2010, comparable
store sales declined 1.7% in the U.S. and 4.6% in Canada, while online sales
increased 22.0%.
“We
delivered record financial results and made significant progress on key
initiatives in the first quarter of 2010,” commented Jane Elfers, President and
Chief Executive Officer of The Children’s Place. “We strengthened the senior
leadership team with the appointment of five talented and experienced executives
to head our merchandising, planning, outlet, information technology and human
resources operations. In addition, we accelerated our new store openings,
sharpened our marketing programs and continued to drive double-digit online
growth.”
“Looking
ahead, we believe The Children’s Place is well positioned to continue growing
market share as we execute on our growth initiatives,” Elfers added. “We will
continue to keep a tight rein on expenses as consumer spending remains
constrained by lingering weakness in the economic environment.”
The
comparability of income from continuing operations is affected by several
transactions that occurred in the first quarter of 2009, which were highlighted
in the Company’s earnings release on May 21, 2009. Excluding those transactions
that affect comparability between quarters, adjusted income from continuing
operations after tax in the first quarter of 2010 increased 28.7% from $21.8
million, or $0.74 per diluted share, in the first quarter of 2009. Adjusted
income from continuing operations excluding transactions that affect
comparability is a non-GAAP measure. The Company believes the excluded items are
not indicative of the performance of its core business and that by providing
this supplemental disclosure to investors it will facilitate comparisons of its
past and present performance. A reconciliation of income from continuing
operations as reported is included in this press release in Table
3.
Net
income, including the impact of discontinued operations, was $27.9 million, or
$1.00 per diluted share, in the first quarter of 2010 compared to net income of
$23.5 million, or $0.79 per diluted share, for the same period last
year.
During
the first quarter of 2010, the Company opened 16 stores and closed
one.
PLCE
– First Quarter 2010 Financial Results
Page
2
Outlook
The
Company updated its guidance for fiscal 2010 and now projects earnings per
diluted share from continuing operations will be in the range of $3.05 to $3.15,
reflecting its first quarter results, from its initial guidance of $2.90 to
$3.10. The Company provided initial guidance for the second quarter of 2010,
which is forecast to be a loss per share from continuing operations of $(0.38)
to $(0.33). Earnings guidance for the second quarter and fiscal 2010 assumes
positive low-single digit comparable retail sales and assumes that currency
exchange rates will remain where they are today.
Conference
Call Information
The
Children’s Place will host a conference call to discuss its first quarter 2010
results today at 8:00 a.m. Eastern Time. The call will be broadcast live at
http://investor.childrensplace.com.
An audio archive will be available approximately one hour after the conclusion
of the call.
About
The Children’s Place Retail Stores, Inc.
The
Children’s Place is the largest pure-play children’s specialty apparel retailer
in North America. The Company designs, contracts to manufacture and sells
fashionable, high-quality merchandise at value-prices under the proprietary “The
Children's Place” brand name. As of May 1, 2010, the Company owned and operated
962 The Children’s Place stores and an online store at www.childrensplace.com.
Forward-Looking
Statements
This
press release (and above referenced call) may contain certain forward-looking
statements regarding future circumstances, including statements relating to the
Company’s positioning, and forecasts regarding earnings per diluted share for
fiscal 2010 and loss per share for the second quarter of 2010. 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. Some of these risks and uncertainties are
described in the Company's filings with the Securities and Exchange Commission,
including in the “Risk Factors” section of its annual report on Form 10-K for
the fiscal year ended January 30, 2010. Included among the risks and
uncertainties that could cause actual results, events and performance to differ
materially are the risk that the Company will be unsuccessful in gauging fashion
trends and changing consumer preferences, and the risks resulting from the
highly competitive nature of the Company’s business and its dependence on
consumer spending patterns, which may be affected by the downturn in the
economy. 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 they were made. The Company undertakes 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 Company or any other person that
the events or circumstances described in such statement are
material.
| CONTACT: |
The
Children’s Place Retail Stores, Inc.
Susan
Riley, EVP, Finance & Administration, (201) 558-2400
Jane
Singer, VP, Investor Relations, (201)
453-6955
|
(Tables
Follow)
2
Table
1
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
|
First Quarter Ended
|
||||||||
|
May 1, 2010
|
May 2, 2009
|
|||||||
|
Net
sales
|
$ | 422,133 | $ | 401,901 | ||||
|
Cost
of sales
|
242,429 | 235,374 | ||||||
|
Gross
profit
|
179,704 | 166,527 | ||||||
|
Selling,
general and administrative expenses
|
113,455 | 111,893 | ||||||
|
Asset
impairment charge
|
930 | 1,099 | ||||||
|
Depreciation
and amortization
|
17,625 | 17,524 | ||||||
|
Income
from continuing operations before interest and taxes
|
47,694 | 36,011 | ||||||
|
Interest
(expense), net
|
(456 | ) | (3,268 | ) | ||||
|
Income
from continuing operations before income taxes
|
47,238 | 32,743 | ||||||
|
Provision
for income taxes
|
19,231 | 9,002 | ||||||
|
Income
from continuing operations net of income taxes
|
28,007 | 23,741 | ||||||
|
(Loss)
from discontinued operations net of income taxes
|
(105 | ) | (229 | ) | ||||
|
Net
income
|
$ | 27,902 | $ | 23,512 | ||||
|
Basic
income from continuing operations per common share
|
$ | 1.02 | $ | 0.81 | ||||
|
(Loss)
from discontinued operations per common share
|
-- | (0.01 | ) | |||||
|
Basic
net income per common share
|
$ | 1.01 | $ | 0.80 | ||||
|
Basic
weighted average common shares outstanding
|
27,583 | 29,475 | ||||||
|
Diluted
income from continuing operations per common share
|
$ | 1.00 | $ | 0.80 | ||||
|
(Loss)
from discontinued operations per common share
|
-- | (0.01 | ) | |||||
|
Diluted
net income per common share
|
$ | 1.00 | $ | 0.79 | ||||
|
Diluted
weighted average common shares and common shares equivalents
outstanding
|
27,930 | 29, 605 | ||||||
|
Note:
Amounts may not add due to rounding.
|
||||||||
3
Table
2
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
May 1, 2010
|
January 30, 2010
|
May 2, 2009
|
||||||||||
|
Assets:
|
||||||||||||
|
Cash
and investments
|
$ | 225,731 | $ | 170,492 | $ | 224,275 | ||||||
|
Accounts
receivable
|
16,260 | 16,910 | 19,299 | |||||||||
|
Inventories
|
182,356 | 206,227 | 181,984 | |||||||||
|
Other
current assets
|
73,999 | 63,253 | 84,880 | |||||||||
|
Total
current assets
|
498,346 | 456,882 | 510,438 | |||||||||
|
Property
and equipment, net
|
315,567 | 312,801 | 314,331 | |||||||||
|
Other
assets, net
|
60,667 | 84,377 | 67,151 | |||||||||
|
Total
assets
|
$ | 874,580 | $ | 854,060 | $ | 891,920 | ||||||
|
Liabilities
and Stockholder Equity:
|
||||||||||||
|
Short
term portion of term loan
|
$ | -- | $ | -- | $ | 15,000 | ||||||
|
Accounts
payable
|
45,588 | 55,547 | 58,155 | |||||||||
|
Accrued
expenses and other current liabilities
|
81,099 |
89,969
|
98,811 | |||||||||
|
Total
current liabilities
|
126,687 | 145,516 | 171,966 | |||||||||
|
Long
term portion of term loan
|
-- | -- | 23,000 | |||||||||
|
Other
liabilities
|
117,959 | 119,574 | 117,565 | |||||||||
|
Total
liabilities
|
244,646 | 265,090 | 312,531 | |||||||||
|
Stockholders’
equity
|
629,934 | 588,970 | 579,389 | |||||||||
|
Total
liabilities and stockholders’ equity
|
$ | 874,580 | $ | 854,060 | $ | 891,920 | ||||||
4
Table
3
THE
CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In
millions, except per share amounts)
(Unaudited)
|
First Quarter Ended
|
||||||||
|
May 1, 2010
|
May 2, 2009
|
|||||||
|
Income
from continuing operations net of income taxes
|
$
28.0
|
$ | 23.7 | |||||
|
Transactions
affecting comparability:
|
||||||||
|
Restructuring
costs
|
-- | 2.6 | ||||||
|
Deferred
financing fees write-off
|
-- | 0.9 | ||||||
|
Impairment
charge
|
-- | 0.8 | ||||||
|
Aggregate
impact of transactions affecting comparability
|
-- | 4.3 | ||||||
|
Income
tax effect
|
-- | (1.7 | ) | |||||
|
Benefit
resulting from resolution of an IRS
income
tax audit
|
-- | (4.5 | ) | |||||
|
Adjusted
(gain) from transactions affecting comparability
|
-- | (1.9 | ) | |||||
|
Adjusted
income from continuing operations net of income taxes
|
$ | 28.0 | $ | 21.8 | ||||
|
GAAP
income from continuing operations per diluted share
|
$ | 1.00 | $ | 0.80 | ||||
|
Adjusted
income from continuing operations per diluted share
|
$ | 1.00 | $ | 0.74 | ||||
###