The Children's Place Reports Fourth Quarter and Fiscal 2013 Results
Issues Guidance for First Quarter and Fiscal 2014
Initiates Quarterly Dividend
Announces New
"
Elfers continued, "We generated over
"In 2014, we expect to double our international store count to 65-70, significantly increase our eCommerce business, grow our wholesale business through existing and new partners, and improve the productivity of our North American fleet. In addition, we plan to complete the rollout of our ERP system which will set the foundation for enhanced sales and operating margin over time through state-of-the-art inventory management and omni-channel capabilities."
"In recognition of our significant progress over the past few years, we are changing our Company's name in 2014 from 'The
Fourth Quarter 2013 Results
The Company follows the retail 4-5-4 reporting calendar, which included a 53rd week in 2012.
Net sales were
Comparable retail sales declined 4.3% for the 13 week period ended
Net income was
Gross profit was
As a result of the Company's strong expense management, selling, general and administrative expenses were
Operating income was
During the fourth quarter, the Company recorded charges of
Adjusted net income, adjusted gross profit, adjusted SG&A, and adjusted operating income are Non-GAAP measures. 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 to GAAP financial information is provided at the end of this release.
Fiscal 2013 Results
Net sales were
Comparable retail sales declined 2.8% for the 52 week period ending
Net income was
Gross profit was
Selling, general and administrative expenses were
Operating income was
Store Openings and Closures
The Company opened 8 stores and closed 24 during the fourth quarter of 2013. During fiscal 2013, the Company opened 53 stores and closed 41, ending the year with 1,107 stores and square footage of 5.21 million, a decrease of 0.8% compared to the prior year.
In 2014, the Company plans to open approximately 35 stores and close 30, for a net of 5 additional stores in
Capital Return Program
During the fourth quarter of 2013, the Company repurchased 200 thousand shares for approximately
In a separate announcement today, the Company reported its Board of Directors initiated a quarterly dividend of
Outlook
The Company is taking a cautious stance on its outlook for fiscal 2014 given the severe weather conditions experienced in February and early March and the heightened promotional environment. This guidance also anticipates a significant negative impact from foreign exchange in 2014.
Adjusted net income per diluted share for the first quarter is expected to be between
For fiscal 2014, the Company is forecasting adjusted net income per diluted share will be between
The Company estimates foreign exchange will negatively impact adjusted net income per diluted share by approximately
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 adjusted net income per diluted share. 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)
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Fourth Quarter Ended | Year-to-Date Ended | |||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |
February 1, | February 2, | February 1, | February 2, | |
2014 | 2013 | 2014 | 2013 | |
Net sales | $ 467,497 | $ 509,224 | $ 1,765,789 | $ 1,809,486 |
Cost of sales | 303,187 | 320,667 | 1,110,268 | 1,118,046 |
Gross profit | 164,310 | 188,557 | 655,521 | 691,440 |
Selling, general and administrative expenses | 118,716 | 136,089 | 485,653 | 510,918 |
Asset impairment charges | 7,867 | 215 | 29,633 | 2,284 |
Other costs (income) | (144) | 6,622 | (906) | 11,088 |
Depreciation and amortization | 15,968 | 19,712 | 64,858 | 77,435 |
Operating income | 21,903 | 25,919 | 76,283 | 89,715 |
Interest income (expense), net | 123 | 84 | 265 | (20) |
Income before taxes | 22,026 | 26,003 | 76,548 | 89,695 |
Provision for income taxes | 6,375 | 6,875 | 23,522 | 26,452 |
Net income | $ 15,651 | $ 19,128 | $ 53,026 | $ 63,243 |
Earnings per common share | ||||
Basic | $ 0.70 | $ 0.81 | $ 2.35 | $ 2.63 |
Diluted | $ 0.69 | $ 0.80 | $ 2.32 | $ 2.61 |
Weighted average common shares outstanding | ||||
Basic | 22,253 | 23,541 | 22,537 | 24,092 |
Diluted | 22,652 | 23,789 | 22,835 | 24,276 |
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Fourth Quarter Ended | Year-to-Date Ended | |||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |
February 1, | February 2, | February 1, | February 2, | |
2014 | 2013 | 2014 | 2013 | |
Net income | $ 15,651 | $ 19,128 | $ 53,026 | $ 63,243 |
Non-GAAP adjustments: | ||||
Expenses: | ||||
Store disposition | 9,842 | -- | 23,716 | 1,250 |
Asia Reorganization | -- | -- | 1,237 | -- |
DC exit costs (income) | (144) | 8,641 | (906) | 18,793 |
IT Impairment and Costs | -- | -- | 10,323 | -- |
Restructuring severance costs | -- | -- | -- | 1,971 |
Obsolete supply and fixture costs | -- | -- | -- | 883 |
Legal Settlement | (267) | -- | (267) | 1,087 |
Accelerated depreciation for Canadian store remodels | -- | -- | -- | 1,630 |
Aggregate impact of Non-GAAP adjustments | 9,431 | 8,641 | 34,103 | 25,614 |
Income tax effect (1) | (3,325) | (3,456) | (12,774) | (10,025) |
Net impact of Non-GAAP adjustments | 6,106 | 5,185 | 21,329 | 15,589 |
Adjusted net income | $ 21,757 | $ 24,313 | $ 74,355 | $ 78,832 |
GAAP net income per common share | $0.69 | $0.80 | $2.32 | $2.61 |
Adjusted net income per common share | $0.96 | $1.02 | $3.26 | $3.25 |
(1) The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides. |
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Fourth Quarter Ended | Year-to-Date Ended | |||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |
February 1, | February 2, | February 1, | February 2, | |
2014 | 2013 | 2014 | 2013 | |
Operating income | $ 21,903 | $ 25,919 | $ 76,283 | $ 89,715 |
Non-GAAP adjustments: | ||||
Expenses: | ||||
Store disposition | 9,842 | -- | 23,716 | 1,250 |
Asia Reorganization | -- | -- | 1,237 | -- |
DC exit costs (income) | (144) | 8,641 | (906) | 18,793 |
IT Impairment and Costs | -- | -- | 10,323 | -- |
Restructuring severance costs | -- | -- | -- | 1,971 |
Obsolete supply and fixture costs | -- | -- | -- | 883 |
Legal Settlement | (267) | -- | (267) | 1,087 |
Accelerated depreciation for Canadian store remodels | -- | -- | -- | 1,630 |
Aggregate impact of Non-GAAP adjustments | 9,431 | 8,641 | 34,103 | 25,614 |
Adjusted operating income | $ 31,334 | $ 34,560 | $ 110,386 | $ 115,329 |
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Fourth Quarter Ended | Year-to-Date Ended | |||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |
February 1, | February 2, | February 1, | February 2, | |
2014 | 2013 | 2014 | 2013 | |
Gross Profit | $ 164,310 | $ 188,557 | $ 655,521 | $ 691,440 |
Non-GAAP adjustments: | ||||
Expenses: | ||||
Store disposition | 1,816 | -- | 2,920 | -- |
Aggregate impact of Non-GAAP adjustments | 1,816 | -- | 2,920 | -- |
Adjusted Gross Profit | $ 166,126 | $ 188,557 | $ 658,441 | $ 691,440 |
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||||
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP | ||||
(In thousands, except per share amounts) | ||||
(Unaudited) | ||||
Fourth Quarter Ended | Year-to-Date Ended | |||
13 Weeks | 14 Weeks | 52 Weeks | 53 Weeks | |
February 1, | February 2, | February 1, | February 2, | |
2014 | 2013 | 2014 | 2013 | |
Selling, general and administrative expenses | $ 118,716 | $ 136,089 | $ 485,653 | $ 510,918 |
Non-GAAP adjustments: | ||||
Expenses: | ||||
Store disposition | (159) | -- | (276) | -- |
Asia Reorganization | -- | -- | (1,190) | -- |
IT Costs | -- | -- | (1,210) | -- |
Restructuring severance costs | -- | -- | -- | (1,971) |
Obsolete supply and fixture costs | -- | -- | -- | (883) |
Legal Settlement | 267 | -- | 267 | (1,087) |
Aggregate impact of Non-GAAP adjustments | 108 | -- | (2,409) | (3,941) |
Adjusted Selling, general and administrative expenses | $ 118,824 | $ 136,089 | $ 483,244 | $ 506,977 |
THE CHILDREN'S PLACE RETAIL STORES, INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(In thousands) | |||
(Unaudited) | |||
February 1, | February 2, | ||
2014 | 2013* | ||
Assets: | |||
Cash and cash equivalents | $ 173,997 | $ 194,128 | |
Short-term investments | 62,500 | 15,000 | |
Accounts receivable | 25,960 | 18,490 | |
Inventories | 322,422 | 266,976 | |
Other current assets | 44,441 | 50,641 | |
Total current assets | 629,320 | 545,235 | |
Property and equipment, net | 312,149 | 330,101 | |
Other assets, net | 49,161 | 48,074 | |
Total assets | $ 990,630 | $ 923,410 | |
Liabilities and Stockholders' Equity: | |||
Accounts payable | $ 150,652 | $ 87,461 | |
Accrued expenses and other current liabilities | 120,697 | 104,045 | |
Total current liabilities | 271,349 | 191,506 | |
Other liabilities | 102,503 | 110,955 | |
Total liabilities | 373,852 | 302,461 | |
Stockholders' equity | 616,778 | 620,949 | |
Total liabilities and stockholders' equity | $ 990,630 | $ 923,410 | |
* Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2013. |
THE CHILDREN'S PLACE RETAIL STORES, INC. | ||
CONDENSED CONSOLIDATED CASH FLOWS | ||
(In thousands) | ||
(Unaudited) | ||
Year-to-Date Ended | ||
52 Weeks | 53 Weeks | |
February 1, | February 2, | |
2014 | 2013 | |
Net income | $ 53,026 | $ 63,243 |
Non-cash adjustments | 106,830 | 85,060 |
Working Capital | 13,614 | 56,739 |
Net cash provided by operating activities | 173,470 | 205,042 |
Net cash used in investing activities | (119,700) | (105,220) |
Net cash used in financing activities | (64,140) | (82,257) |
Effect of exchange rate changes on cash | (9,761) | (92) |
Net (decrease) increase in cash and cash equivalents | (20,131) | 17,473 |
Cash and cash equivalents, beginning of period | 194,128 | 176,655 |
Cash and cash equivalents, end of period | $ 173,997 | $ 194,128 |
CONTACT:Jane Singer Vice President, Investor Relations (201) 453-6955