Children's Place Earnings Top View Despite Soft Sales

(RTTNews) - Kids apparel retailer Children's Place Stores, Inc. (PLCE) reported Tuesday a profit for the third quarter that increased from last year, as cost controls helped offset sluggish sales.

Adjusted earnings per share topped analysts' expectations, while quarterly sales missed their estimates. The company also provided earnings guidance for the first quarter, in line with Street view, and raised the low end of its full-year 2013 earnings forecast.

"We achieved the high-end of our earnings guidance as a result of strong execution of our important back-to-school period, and the continuation of disciplined expense management across the organization," President and CEO Jane Elfers said in a statement.

The Secaucus, New Jersey-based retailer of children's merchandise posted net income of $41.74 million or $1.84 per share for the third quarter, higher than $37.31 million or $1.54 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $42.74 million or $1.89 per share, compared to $41.26 million or $1.70 per diluted share in the year-ago quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.85 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined to $492.68 million from $500.93 million in the same quarter last year, and missed sixteen Wall Street analysts' consensus estimate of $502.05 million. Comparable store sales also decreased 0.7 percent.

Gross profit for the quarter was $201.76 million, down from $209.53 million in the year-ago quarter.

During the third quarter, the company opened 10 stores and closed 3, ending the quarter with 1,123 stores.

"We are well-positioned as we enter the fourth quarter and look forward to making substantive progress on our key strategic initiatives," Elfers added.

Looking ahead to the fourth quarter, Children's Place expects adjusted earnings in a range of $0.90 to $0.98 per share, on projected negative low-single digit comparable retail sales. Analysts expect the company to report earnings of $0.97 per share on quarterly revenues of $494.31 million.

For fiscal 2013, the company currently expects adjusted earnings in a range of $3.20 to $3.28 per share, up from the prior forecast range of $3.15 to $3.28 per share, but continues to project negative low-single digit comparable retail sales. Street is currently looking for full-year 2013 earnings of $3.22 per share on annual revenues of $1.80 billion.

PLCE closed Monday's regular trading session at $51.88, down $0.57 on a volume of 0.70 million shares. In the past 52-week period, the stock has been trading in a range of $42.21 to $58.89.