The Children's Place Reports First Quarter 2011 Financial Results
SECAUCUS, N.J., May 19, 2011 (GlobeNewswire via COMTEX) -- The Children's Place Retail Stores, Inc. (Nasdaq:PLCE), the largest pure-play children's specialty apparel retailer in North America, today announced net sales of $430.8 million for the thirteen weeks ended April 30, 2011, a 2% increase compared to $422.1 million in the first quarter of fiscal 2010. Comparable retail sales declined 3.2% in the first quarter of 2011.
Income from continuing operations after tax was $29.1 million, or $1.10 per diluted share, in the first quarter of 2011, compared to $28.0 million, or $1.00 per diluted share, in the first quarter of 2010.
"We grew net sales and earnings during the first quarter, and expanded merchandise margins as a result of improved merchandise assortments and disciplined inventory management," commented Jane Elfers, President and Chief Executive Officer. "E-commerce sales grew 24% and square footage expanded by 6% as we accelerated new store openings earlier in the year. We significantly strengthened the senior leadership team with the appointments of Eric Bauer -- Chief Operating Officer, Michael Giannelli -- SVP, Design and Bruce Marshall -- SVP, International.
"In spite of higher product costs, we expect gross margin will expand over the next couple of quarters and fiscal 2011 due to the progress being made on our key growth initiatives," Elfers concluded.
During the first quarter of 2011, the Company opened 42 stores and closed five. In the first quarter of 2010, the Company opened 16 stores and closed one.
Share Repurchase Program
During the first quarter of fiscal 2011, the Company repurchased 372.4 thousand shares for approximately $18.4 million. The Company completed the $100 million share repurchase program announced in August 2010 and repurchased approximately $8.4 million of a new $100 million share repurchase program which was authorized by the Board of Directors in March 2011. Under the 2011 share repurchase program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time, and may thereafter reinstitute purchases, all without prior announcement.
Outlook
The Company updated its guidance for fiscal 2011 to reflect its first quarter results and now projects earnings per diluted share from continuing operations will be in the range of $3.10 to $3.25, compared to its initial guidance of $3.05 to $3.25. This guidance assumes flat comparable retail sales for fiscal 2011.
The Company provided initial guidance for the second quarter of 2011, which is forecasted to be a loss per share from continuing operations of $0.38 cents to $0.43 cents, assuming negative low-single digit comparable retail sales. The Company expects gross margin expansion during the second quarter of 2011 will be more than offset by increased SG&A spending due to higher store expense associated with the accelerated rollout of new stores and higher administrative expenses.
The earnings guidance for the second quarter and fiscal 2011 assumes that currency exchange rates will remain where they are today and does not include the impact of further potential share repurchases.
Conference Call Information
The Children's Place will host a conference call to discuss its first quarter fiscal 2011 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 on the Company's website 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, primarily under the proprietary "The Children's Place" brand name. As of April 30, 2011, the Company operated 1,032 stores and an e-commerce site at www.childrensplace.com.
Forward Looking Statements
This press release (and the above referenced call) may contain certain forward-looking statements regarding future circumstances, including statements relating to the Company's positioning, and forecasts regarding store openings and earnings per diluted share from continuing operations. 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 and performance 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 29, 2011. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 a further downturn in the economy or by other factors such as increases in the cost of gasoline, and the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases. 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.
(Tables Follow)
Table 1
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
First Quarter Ended
----------------------
April 30, May 1,
2011 2010
---------- ----------
Net sales $ 430,806 $ 422,133
Cost of sales 247,159 242,429
---------- ----------
Gross profit 183,647 179,704
Selling, general and administrative
expenses 116,722 113,455
Asset impairment charges 398 930
Depreciation and amortization 17,751 17,625
---------- ----------
Operating income 48,776 47,694
Interest (expense), net (271) (456)
---------- ----------
Income from continuing operations
before income taxes 48,505 47,238
Provision for income taxes 19,421 19,231
---------- ----------
Income from continuing operations 29,084 28,007
(Loss) from discontinued operations,
net of income taxes -- (105)
---------- ----------
Net income $ 29,084 $ 27,902
========== ==========
Basic earnings (loss) per share amounts
Income from continuing operations $ 1.11 $ 1.02
(Loss) from discontinued operations -- (0.00)
---------- ----------
Net income $ 1.11 $ 1.01
========== ==========
Basic weighted average common shares
outstanding 26,120 27,583
Diluted earnings (loss) per share
amounts
Income from continuing operations $ 1.10 $ 1.00
(Loss) from discontinued operations -- (0.00)
---------- ----------
Net income $ 1.10 $ 1.00
========== ==========
Diluted weighted average common shares
outstanding 26,387 27,930
Note: Table may not add due to rounding
Table 2
THE CHILDREN'S PLACE
RETAIL STORES, INC.
CONDENSED CONSOLIDATED
BALANCE SHEETS
(In thousands)
(Unaudited)
January
April 30, 29, May 1,
2011 2011* 2010
---------- ---------- ----------
Assets:
Cash and investments $ 212,347 $ 185,915 $ 225,731
Accounts receivable 21,269 16,121 16,260
Inventories 192,714 210,523 182,356
Other current assets 53,962 65,142 73,999
---------- ---------- ----------
Total current assets 480,292 477,701 498,346
Property and equipment,
net 327,017 320,601 315,567
Other assets, net 57,653 56,029 60,667
---------- ---------- ----------
Total assets $ 864,962 $ 854,331 $ 874,580
========== ========== ==========
Liabilities and
Stockholders' Equity:
Accounts payable $ 23,635 $ 50,730 $ 45,588
Accrued expenses and
other current
liabilities 83,485 79,666 81,099
---------- ---------- ----------
Total current
liabilities 107,120 130,396 126,687
Other liabilities 122,241 116,208 117,959
---------- ---------- ----------
Total liabilities 229,361 246,604 244,646
Stockholders' equity 635,601 607,727 629,934
---------- ---------- ----------
Total liabilities and
stockholders' equity $ 864,962 $ 854,331 $ 874,580
========== ========== ==========
* Derived from the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K
for the fiscal year ended
January 29, 2011.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: The Children's Place Retail Stores, Inc.
CONTACT:
Jane Singer
Vice President, Investor Relations
(201) 453-6955