Free Post Earnings Research Report: Children's Place Announced Lower than Expected Results

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LONDON, UK / ACCESSWIRE / June 21, 2018 / If you want access to our free earnings report on The Children's Place, Inc. (PLCE), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=PLCE. Children's Place reported its first quarter fiscal 2018 operating and financial results on May 17, 2018. The retailer reaffirmed its adjusted earnings guidance for fiscal year 2018. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, The Children's Place most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

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Earnings Highlights and Summary

For the thirteen weeks ended May 05, 2018, Children's Place net sales decreased marginally by 0.1% to $436.3 million compared to $436.7 million in Q1 2017. The Company's reported quarter comparable retail sales decreased 1.8%. Children's Place' reported numbers lagged behind analysts' estimates of $444.0 million.

During Q1 2018, Children's Place's gross profit was $160.2 million compared to $170.6 million in Q1 2017. The Company's adjusted gross profit was $161.5 million in the reported quarter compared to $171.0 million in the year ago same period and deleveraged 220 basis points to 37.0% of sales. The decline was attributed to lower than expected traffic as the Company lowered average unit retail (AUR) to clear merchandise, resulting in on plan inventory levels at the end of Q1 2018 quarter. Gross margin rate was also negatively impacted by growth in penetration of its digital business to 26% from 23% in Q1 2017, as Children's Place's digital business operates at a lower gross margin rate due to higher fulfillment costs but is accretive to operating margin.

For Q1 2018, Children's Place's selling, general, and administrative (SG&A) expenses were $118.5 million compared to $112.1 million in Q1 2017. The Company's reported quarter adjusted SG&A was $118.7 million compared to $106.9 million in the year earlier corresponding quarter and deleveraged 270 basis points as a percentage of net sales primarily as a result of the incremental investment in Children's Place' transformation initiatives and the reclassification of certain items due to the new revenue recognition rules.

Children's Place's operating income was $23.1 million for Q1 2018 compared to operating income of $42.3 million in Q1 2017. The Company's adjusted operating income in the reported quarter was $25.4 million, or 5.8% of net sales, compared to adjusted operating income of $48.4 million in the year earlier same quarter.

For Q1 2018, Children's Place reported net income of $31.5 million, or $1.78 per diluted share, compared to net income of $36.2 million, or $1.97 per diluted share, in Q1 2017.The Company's reported quarter adjusted net income was $33.2 million, or $1.87 per diluted share, versus adjusted net income of $35.9 million, or $1.95 per diluted share, in the year earlier comparable quarter. Children's Place' reported numbers lagged behind analysts' estimates of $2.21 per share.

Store Openings and Closures

Consistent with Children's Place' store fleet optimization initiative, the Company closed 12 stores and did not open any stores during Q1 2018. Children's Place ended the reported quarter with 1,002 stores and 4.7 million square footage, a decrease of 2.7% compared to the prior year. Since fleet optimization initiative was announced in 2013, Children's Place has closed 181 stores.

During Q1 2018, Children's Place' international franchise partners opened 11 points of distribution and closed 1, and the Company ended the quarter with 200 international points of distribution open and operated by its 8 franchise partners in 20 countries.

Capital Return Program

During Q1 2018, Children's Place repurchased 1.03 million shares for approximately $162 million. The Company also paid a quarterly dividend of approximately $8 million, or $0.50 per share, in the reported quarter.

Since 2009, Children's Place has repurchased approximately $1.03 billion of its common stock, and since 2014, paid approximately $75 million in dividends. At the end of Q1 2018, the Company had approximately $332 million available for future share repurchases under its existing share repurchase programs.

Outlook

For fiscal 2018, Children's Place reaffirmed its adjusted net income forecast to be in the range of $7.95 to $8.20 per share. For FY18, the Company is expecting total net sales to be in the band of $1.920 billion to $1.935 billion. This guidance assumes a comparable retail sales increase of approximately 3.5% to 4.5%.

For Q2 2018, Children's Place is projecting net income to be in the range of $0.51 to $0.61 per share based upon a high single digit comparable retail sales increase. This compares to adjusted net income of $0.86 per share in Q2 2017.

Stock Performance Snapshot

June 20, 2018 - At Wednesday's closing bell, The Children's Place's stock rose 1.48%, ending the trading session at $133.60.

Volume traded for the day: 412.94 thousand shares.

Stock performance in the last month - up 6.97%; and past twelve-month period - up 31.17%

After yesterday's close, The Children's Place's market cap was at $2.20 billion.

Price to Earnings (P/E) ratio was at 18.02.

The stock has a dividend yield of 1.50%.

The stock is part of the Services sector, categorized under the Apparel Stores industry. This sector was up 0.6% at the end of the session.

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