The Children's Place Reports Second Quarter 2012 Financial Results
Management Updates Fiscal 2012 Earnings Guidance
Comparable retail sales grew 3.4% in the quarter, driven by increases in both US and
GAAP net loss was
Adjusted net loss is a non-GAAP measure. The Company believes the excluded transactions 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 net income as reported is included in this press release in Table 3.
"We achieved solid sales growth during the second quarter. Our focus on differentiated merchandise assortments has worked well for us all year, and we expect continued momentum during the important back-to-school selling season," commented
The Company opened 19 stores and closed one, ending the second quarter with 1,080 stores.
Fiscal Year-to-Date
Net sales from continuing operations increased 3% to
GAAP net income for fiscal year-to-date 2012 was
Share Repurchase Program
During the second quarter, the Company repurchased 336 thousand shares for approximately
Outlook
The Company updated its earnings guidance for fiscal 2012 and now projects that non-GAAP adjusted earnings per diluted share will be between
The Company provided initial guidance for the third quarter of 2012, and is forecasting non-GAAP adjusted earnings per diluted share between
This earnings guidance assumes that currency exchange rates will remain consistent with today's rates, and does not include the impact of further potential share repurchases.
Consolidating US Distribution Centers
The Company plans to consolidate into a single US distribution center in the Southeast in order to more effectively manage its inventory and optimize capacity. Its Southeast distribution center, located in
Conference Call Information
About The
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
(Tables Follow)
Table 1 | ||||
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Second Quarter Ended | Year-to-Date Ended | |||
July 28, | July 30, | July 28, | July 30, | |
2012 | 2011 | 2012 | 2011 | |
Net sales | $ 360,826 | $ 343,508 | $ 799,334 | $ 774,314 |
Cost of sales | 246,583 | 227,943 | 508,304 | 475,102 |
Gross profit | 114,243 | 115,565 | 291,030 | 299,212 |
Selling, general and administrative expenses | 120,308 | 111,885 | 242,460 | 228,607 |
Asset impairment charges | 280 | 980 | 1,530 | 1,378 |
Other costs | 3,062 | -- | 3,896 | -- |
Depreciation and amortization | 17,482 | 18,478 | 34,700 | 36,229 |
Operating income (loss) | (26,889) | (15,778) | 8,444 | 32,998 |
Interest (expense), net | (30) | (314) | (81) | (585) |
Income (loss) before taxes | (26,919) | (16,092) | 8,363 | 32,413 |
Provision (benefit) for income taxes | (8,930) | (6,315) | 2,760 | 13,106 |
Net income (loss) | $ (17,989) | $ (9,777) | $ 5,603 | $ 19,307 |
Earnings (loss) per common share | ||||
Basic | $ (0.74) | $ (0.38) | $ 0.23 | $ 0.74 |
Diluted | $ (0.74) | $ (0.38) | $ 0.23 | $ 0.74 |
Weighted average common shares outstanding | ||||
Basic | 24,249 | 25,738 | 24,392 | 25,925 |
Diluted | 24,249 | 25,738 | 24,533 | 26,163 |
Table 2 | |||
THE CHILDREN'S PLACE RETAIL STORES, INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(In thousands) | |||
(Unaudited) | |||
July 28, | January 28, | July 30, | |
2012 | 2012* | 2011 | |
Assets: | |||
Cash and cash equivalents | $ 158,621 | $ 176,655 | $ 151,503 |
Accounts receivable | 23,408 | 17,382 | 22,760 |
Inventories | 239,012 | 212,916 | 244,061 |
Other current assets | 64,793 | 66,372 | 64,576 |
Total current assets | 485,834 | 473,325 | 482,900 |
Property and equipment, net | 330,838 | 323,863 | 331,277 |
Other assets, net | 51,878 | 53,461 | 59,074 |
Total assets | $ 868,550 | $ 850,649 | $ 873,251 |
Liabilities and Stockholders' Equity: | |||
Accounts payable | $ 72,809 | $ 55,516 | $ 67,738 |
Accrued expenses and other current liabilities | 94,683 | 76,039 | 85,011 |
Total current liabilities | 167,492 | 131,555 | 152,749 |
Other liabilities | 113,314 | 109,728 | 120,623 |
Total liabilities | 280,806 | 241,283 | 273,372 |
Stockholders' equity | 587,744 | 609,366 | 599,879 |
Total liabilities and stockholders' equity | $ 868,550 | $ 850,649 | $ 873,251 |
* Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended January 28, 2012. |
Table 3 | ||||
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Second Quarter Ended | Year-to-Date Ended | |||
July 28, | July 30, | July 28, | July 30, | |
2012 | 2011 | 2012 | 2011 | |
Net income (loss) | $(17,989) | $ (9,777) | $ 5,603 | $ 19,307 |
Non-GAAP adjustments: | ||||
Expenses: | ||||
Store Impairment due to early termination | -- | -- | 1,250 | -- |
West Coast DC exit costs | 3,062 | -- | 3,896 | -- |
Restructuring severance costs | -- | -- | 1,971 | -- |
Obsolete supply and fixture costs | 164 | -- | 883 | -- |
Legal Settlement | 1,087 | -- | 1,087 | -- |
Accelerated depreciation for Canadian store remodels | 465 | -- | 1,358 | -- |
Aggregate impact of Non-GAAP adjustments | 4,778 | -- | 10,445 | -- |
Income tax effect | (1,849) | -- | (3,994) | -- |
Adjusted impact from Non-GAAP adjustments | 2,929 | -- | 6,451 | -- |
Adjusted net income (loss) | $(15,060) | $ (9,777) | $ 12,054 | $ 19,307 |
GAAP net income (loss) per common share | $ (0.74) | $ (0.38) | $0.23 | $0.74 |
Adjusted net income (loss) per common share | $ (0.62) | $ (0.38) | $0.49 | $0.74 |
CONTACT:Jane Singer Vice President Investor Relations (201) 453-6955