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SECAUCUS, N.J., Nov. 19, 2009 (GLOBE NEWSWIRE) -- The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today reported financial results for the third quarter and fiscal year-to-date 2009. Results from continuing operations for the third quarter and fiscal year-to-date periods ended October 31, 2009 and November 1, 2008 are based on The Children's Place business only. The Disney Store North America ("DSNA") business has been classified as discontinued operations in accordance with generally accepted accounting principles ("GAAP") reflecting the Company's decision to exit the business.

Third Quarter

• Net sales from continuing operations for the third quarter of 2009 increased 3% to $463.2 million, compared to $450.6 million in the third quarter of 2008.
• Comparable retail sales, which include online sales, declined 2% in the third quarter of 2009 following a 4% increase during the same period last year.
• Income from continuing operations was $38.2 million, or $1.38 per diluted share, in the third quarter of 2009, compared to $28.4 million, or $0.96 per diluted share, in the third quarter of 2008.
• Net income, which includes the impact of discontinued operations, was $37.8 million in the third quarter of 2009, or $1.37 per diluted share, compared to $24.1 million, or $0.81 per diluted share, in the third quarter of 2008.
• Inventory per square foot increased 3% at the end of the third quarter of 2009 compared to the third quarter of 2008.
• At the end of the third quarter of 2009, the Company had a cash balance of $104.4 million and no bank borrowings.
• During the third quarter of 2009, the Company opened 13 stores, and ended with 950 stores.

Fiscal Year-to-Date

• Net sales from continuing operations were $1,180.8 million for fiscal year-to-date 2009, a 1% decline compared to $1,188.9 million for the same period of the prior year.
• Comparable retail sales declined 3% year-to-date 2009 following a 6% increase last year.
• Income from continuing operations was $54.7 million, or $1.88 per diluted share, fiscal year-to-date 2009, compared to $50.6 million, or $1.72 per diluted share, last year. The Company's fiscal year-to-date income from continuing operations includes the following items which the Company deems to be unusual or one-time in nature:
  • In fiscal 2009, gains included a $4.8 million income tax benefit from excess foreign tax credits generated by the repatriation of cash from Canada, a $4.7 million, pre-tax, favorable settlement of an IRS employment tax audit related to stock options, and a tax benefit of $4.5 million from the settlement of an IRS income tax audit. These gains were partially offset by $2.9 million of pre-tax expenses associated with previously announced restructuring programs, $2.4 million of pre-tax expenses associated with the pre-payment of the Company's term loan, $2.0 million of pre-tax expenses incurred in connection with the recent proxy contest and an asset impairment charge of $0.8 million, pre-tax, for an underperforming store that has been open for less than two years.
  • In fiscal 2008, gains included $11.1 million, pre-tax, from transition services income net of variable expenses for services provided to the acquirer of the DSNA business, $2.3 million, pre-tax, for the sale of a store lease and $0.2 million, pre-tax, in recovery of legal fees. These gains were partially offset by $2.4 million, pre-tax, in professional fees associated with the Company's restructuring activities and $1.3 million, pre-tax, in legal fees related to the Company's 2006 stock-option investigation.
• Excluding the unusual or one-time items mentioned above from both years, adjusted income from continuing operations was $47.3 million, or $1.63 per diluted share, fiscal year-to-date 2009, compared to $44.7 million, or $1.52 per diluted share, for the same period last year. The income from continuing operations excluding these items 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, which includes the impact of discontinued operations, was $54.2 million, or $1.87 per diluted share, fiscal year-to-date 2009, compared to $43.6 million, or $1.48 per diluted share, last year.
• Fiscal year-to-date, the Company has opened 34 stores and closed one.

Chuck Crovitz, interim Chief Executive Officer of The Children's Place, commented, "We were pleased to have delivered top-line growth and increased profitability in the third quarter. While the consumer remains cautious, we were encouraged by the increased number of sales transactions as customers responded favorably to our fashionable assortment at value price points. In addition, we were able to protect margins with prudent cost controls and inventory management. Based on our expectation that the consumer will remain price sensitive during the fourth quarter, we plan to offer compelling promotions that are designed to create excitement throughout the holiday season."

Conference Call Information

The Children's Place will host a conference call to discuss its third quarter results today at 10:00 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 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" brand name. As of October 31, 2009, the Company owned and operated 950 The Children's Place stores and an online store at www.childrensplace.com.

This press release may contain certain forward-looking statements regarding future circumstances, including statements relating to our future operating plans and strategies. 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 31, 2009. 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 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.

                                Table 1
               THE CHILDREN'S PLACE RETAIL STORES, INC.
                  CONDENSED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                              (Unaudited)

                            Third Quarter        Fiscal Year-to-Date
                                Ended                   Ended
                         -------------------     -------------------
                       October 31, November 1, October 31, November 1,
                          2009        2008        2009        2008
                       ----------- ----------- ----------- -----------

 Net sales             $  463,175  $  450,623  $1,180,752  $1,188,864
 Cost of sales            261,348     254,239     707,099     692,839
                       ----------- ----------- ----------- -----------
 Gross profit             201,827     196,384     473,653     496,025
 Selling, general and
  administrative
  expenses                118,579     126,716     336,565     351,919
 Asset impairment
  charge                      307         954       1,721       1,081
 Depreciation and
  amortization             18,170      17,791      53,258      53,152
                       ----------- ----------- ----------- -----------
 Income from continuing
  operations before
  interest and taxes       64,771      50,923      82,109      89,873
 Interest (expense),
  net                        (520)     (1,912)     (5,250)     (2,803)
                       ----------- ----------- ----------- -----------
 Income from continuing
  operations before
  income taxes             64,251      49,011      76,859      87,070
 Provision for income
  taxes                    26,079      20,563      22,175      36,466
                       ----------- ----------- ----------- -----------
 Income from continuing
  operations               38,172      28,448      54,684      50,604
 Loss from discontinued
  operations                 (389)     (4,391)       (440)     (7,018)
                       ----------- ----------- ----------- -----------
 Net income            $   37,783  $   24,057  $   54,244  $   43,586
                       =========== =========== =========== ===========

 Basic income from
  continuing operations
  per common share     $     1.39  $     0.97  $     1.90  $     1.73
 Loss from discontinued
  operations per common
  share                     (0.01)      (0.15)      (0.02)      (0.24)
                       ----------- ----------- ----------- -----------
 Basic net income per
  common share         $     1.38  $     0.82  $     1.88  $     1.49
                       =========== =========== =========== ===========
 Basic weighted average
  common shares
  outstanding              27,389      29,364      28,805      29,173
 Diluted income from
  continuing operations
  per common share     $     1.38  $     0.96  $     1.88  $     1.72
 Loss from discontinued
  operations per common
  share                     (0.01)      (0.15)      (0.02)      (0.24)
                       ----------- ----------- ----------- -----------
 Diluted net income per
  common share         $     1.37  $     0.81  $     1.87  $     1.48
                       =========== =========== =========== ===========
 Diluted weighted
  average common shares
  outstanding              27,622       29,726     29,038      29,444

 Note: Amounts may not add due to rounding.


                                Table 2
               THE CHILDREN'S PLACE RETAIL STORES, INC.
                       CONDENSED BALANCE SHEETS
                            (In thousands)
                              (Unaudited)

                                   October 31, January 31, November 1,
                                      2009        2009        2008
                                   ----------- ----------- -----------
 Current assets:

 Cash and investments              $  104,364  $  226,206  $  185,980
 Accounts receivable                   16,739      19,639      24,213
 Inventories                          250,599     211,227     232,776
 Other current assets                  87,965      62,518     104,218
 Restricted assets in bankruptcy
  estate of subsidiary                     --          --      78,971
                                   ----------- ----------- -----------
 Total current assets                 459,667     519,590     626,158

 Property and equipment, net          311,113     318,116     336,921
 Other assets, net                     64,536     102,051      83,230
                                   ----------- ----------- -----------
 Total assets                      $  835,316  $  939,757  $1,046,309
                                   =========== =========== ===========

 Current liabilities:

 Revolving credit facility         $       --  $       --  $       --
 Short term portion of term loan           --      30,000      30,000
 Accounts payable                      62,612      73,333      79,913
 Accrued expenses and
  other current liabilities           104,886     103,662     123,179
 Liabilities in bankruptcy estate
  of subsidiary                            --          --     107,767
                                   ----------- ----------- -----------
 Total current liabilities            167,498     206,995     340,859

 Long term portion of term loan            --      55,000      55,000
 Other liabilities                    114,584     129,883     140,984
                                   ----------- ----------- -----------
 Total liabilities                    282,082     391,878     536,843

 Stockholders' equity                 553,234     547,879     509,466
                                   ----------- ----------- -----------
 Total liabilities and
  stockholders' equity             $  835,316  $  939,757  $1,046,309
                                   =========== =========== ===========


                                Table 3
               THE CHILDREN'S PLACE RETAIL STORES, INC.
       RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
                (In millions, except per share amounts)
                              (Unaudited)

                             Third Quarter       Fiscal Year-to-Date
                                 Ended                  Ended
                       ----------------------- -----------------------
                       October 31, November 1, October 31, November 1,
                          2009        2008        2009        2008
                       ----------- ----------- ----------- -----------
 Income from continuing
  operations net of
  income taxes         $     38.2  $     28.4  $     54.7  $     50.6
                       ----------- ----------- ----------- -----------

 Unusual or one-time
  items pre-tax:
 Gains:
   Favorable settlement
    of IRS employment
    tax audit related
    to stock options         (0.1)         --        (4.7)         --
   Net transition
    services income            --        (5.7)         --       (11.1)
   Sale of store lease         --          --          --        (2.3)
   Legal fee recovery          --        (0.2)         --        (0.2)

 Expenses:
   Proxy contest fees        (0.2)         --         2.0          --
   Company
    restructuring fees         --          --         2.9         2.4
   Prepayment of term
    loan expenses/
    deferred financing
    fees                       --          --         2.4          --
   Impairment charge           --          --         0.8          --
   Stock option/special
    investigation fees         --          --          --         1.3
                       ----------- ----------- ----------- -----------

 Aggregate (income)
  impact of unusual or
  one-time items             (0.3)       (5.9)        3.4        (9.9)
 Income tax effect of
  unusual or one-time
  items                       0.1         2.4        (1.5)        4.0
 Excess foreign tax
  credits from
  repatriation of cash         --          --        (4.8)         --
 One-time tax benefit
  from resolution of
  IRS income tax audit         --          --        (4.5)         --
                       ----------- ----------- ----------- -----------
 Adjusted (gain) impact
  from unusual or one-
  time items after
  taxes                      (0.2)       (3.5)       (7.4)       (5.9)

 Adjusted income from
  continuing
  operations net of
  income taxes         $     38.0  $     24.9  $     47.3  $     44.7
                       =========== =========== =========== ===========

 GAAP income from
  continuing operations
  per common share     $     1.38  $     0.96  $     1.88  $     1.72

 Adjusted income from
  continuing operations
  per common share     $     1.38  $     0.84  $     1.63  $     1.52

CONTACT: The Children's Place Retail Stores, Inc.
Susan Riley, EVP, Finance & Administration
(201) 558-2400
Jane Singer, VP, Investor Relations
(201) 453-6955