Children's Place Q3 Adj. Profit Tops View, But Sales Miss; Backs 2014 Outlook

(RTTNews) - Specialty apparel retailer Children's Place Retail Stores, Inc. (PLCE) reported Thursday a profit for the third quarter that declined from last year, reflecting higher charges and a sales decline.

Adjusted earnings per share topped analysts' expectations by two cents, while quarterly sales missed their estimates by a whisker. The company also provided earnings guidance for the fourth quarter, in line with Street view, and reaffirmed earnings outlook for the full-year 2014.

Separately, the company announced the appointment of Anurup Pruthi as senior vice president and chief financial officer, effective December 1, 2014. He will report to Chief Operating Officer Michael Scarpa.

Pruthi, age 46, brings over 23 years of financial expertise to the company. He joins the company from Mumbai, India-based Reliance Industries, Ltd. where he served as CFO.

"We delivered earnings at the high end of our guidance range for the third quarter and continue to make significant progress on our strategic initiatives. We are well positioned to compete effectively in the fourth quarter and we are confirming our full year guidance," President and CEO Jane Elfers said in a statement.

The Secaucus, New Jersey-based largest pure-play children's apparel retailer in North America posted net income of $36.94 million or $1.70 per share for the third quarter, lower than $41.74 million or $1.84 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $39.55 million or $1.82 per share, compared to $42.73 million or $1.89 per share posted last year.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.80 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined to $487.30 million from $492.68 million in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $487.87 million by a whisker. Comparable store sales edged down 0.2 percent.

The company said the latest quarter included the negative impact of about $3.9 million from currency exchange rate fluctuations.

During the third quarter, the company opened 10 stores and closed 6 stores. The company's international franchise partners opened 13 stores, and ended the quarter with 67 international franchise stores open.

Additionally, the company's Board of Directors approved a quarterly dividend of $0.1325 per share, payable on January 16, 2015 to shareholders of record at the close of business on December 26, 2014.

Looking ahead to the fourth quarter, Children's Place expects adjusted earnings in a range of $0.83 to $0.93 per share, on projected positive low single digit comparable retail sales. Analysts expect the company to report earnings of $0.93 per share for the quarter.

For fiscal 2014, the company continues to anticipate adjusted earnings in the range of $2.95 to $3.05 per share, on projected relatively flat comparable retail sales. Street is currently looking for full-year 2014 earnings of $3.02 per share.

"We are focused on the successful execution of our key strategic initiatives: E-Commerce growth, the expansion of our wholesale and international businesses, investments in seamless retail, state of the art planning and allocation systems, and fleet rationalization. In addition, our strong cash flow provides us with the financial flexibility to continue to return capital to our shareholders," Elfers added.

PLCE closed Wednesday's regular trading session at $51.37, up $0.67 on a volume of 0.78 million shares.