Children's Place Retail Profit Falls, Initiates Dividend, To Rename Company

(RTTNews) - Children's specialty apparel retailer The Children's Place Retail Stores, Inc. (PLCE) Thursday reported lower profit for the fourth-quarter as sales declined amid intense promotions and severe storms. The firm initiated a quarterly dividend and said it is renaming the company. Further, the company issued a cautious outlook.

The latest results included the 13 weeks ended February 1, 2014, while the prior-year results are for the 14 weeks ended February 2, 2013.

Net income declined to $15.65 million from last year's $19.13 million. Earnings per share fell to $0.69 from $0.80.

The just concluded quarter's results included charges of $9.4 million for unusual items, primarily consisting of store impairment charges.

Adjusted net income was $0.96 per share, while it totaled $1.02 per share in the previous year. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.95 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales slipped to $467.5 million from $509.2 million. Sales were $480.1 million for the comparable thirteen weeks in 2012. Analysts estimated revenues of $484.48 million for the quarter.

According to the retailer, net sales included the negative impact of $3.9 million from currency exchange rate fluctuations. On a constant currency basis, sales for the quarter would have been $471.4 million.

Comparable retail sales declined 4.3 percent, following an increase of 4.9 percent for the 13 week period ending February 2, 2013.

Jane Elfers, President and Chief Executive Officer, said, ''The Children's Place delivered fiscal 2013 earnings near the top end of our guidance range despite an intensely promotional environment and a series of storms brought on by the polar vortex in the fourth quarter."

The company opened 8 stores and closed 24 during the fourth quarter of 2013. In 2014, the retailer plans to open around 35 stores and close 30.

For the first quarter, the company expects adjusted net income per share to be between $0.58 and $0.66, compared to $0.83 reported in the first quarter of 2013. Analysts expect earnings of $0.95 per share.

For fiscal 2014, adjusted net income per share is expected to be between $2.85 and $3.05. This compares to $3.26 earned in fiscal 2013. Wall Street looks for earnings of $3.66 per share.

The retailer said it is taking a cautious stance on its outlook for fiscal 2014 due to the severe weather conditions experienced in February and early March as well as the heightened promotional environment. This guidance also expects a significant negative impact from foreign exchange in 2014.

In 2014, the company expects to double its international store count to 65-70, significantly increase its eCommerce business and grow its wholesale business through existing and new partners. The firm also plans to improve the productivity of its North American fleet.

Also in the year, the firm plans to change its name from 'The Children's Place Retail Stores, Inc.' to 'The Children's Place, Inc.' to better reflect its strategic positioning as a leading global children's brand.

Separately, the company said its Board of Directors has instituted a quarterly dividend, for the first time since becoming a public company in 1997, and has approved a $100 million share repurchase authorization as part of the company's strategy to return excess capital to shareholders.

The Board authorized a quarterly cash dividend of $0.1325 per share to be paid April 17 for shareholders of record at the close of business on March 27.

PLCE closed down 0.7 percent at $54.70 on Wednesday.