Children’s Place net sales up 0.6% to $373.6 mn in Q2 2017

The Children’s Place Inc, the largest pureplay children’s specialty apparel retailer in North America, has announced that its net sales increased 0.6 per cent to $373.6 million in the second quarter of 2017. Its comparable retail sales increased 3.1 per cent in Q2 2017, and gross profit was $128.4 million, compared to $123.9 million in Q2 of 2016.

The company’s net income was $14.3 million, or $0.79 per diluted share, in Q2 2017, compared to a net loss of $2 million, or $0.11 per diluted share, the previous year. Adjusted net income was $15.6 million, or $0.86 per diluted share, compared to an adjusted net loss of $0.2 million, or $0.01 per diluted share, in the second quarter last year.

This $0.87 increase in adjusted net income per diluted share includes a $0.68 benefit resulting from the new accounting rules for the income tax impact on share-based compensation.

Adjusted gross profit was $128.7 million in the second quarter, compared to $123.9 million last year, and leveraged 100 basis points to 34.4 per cent of sales, driven by increases in AUR and merchandise margin resulting from strong product acceptance and inventory management, inclusive of the impact of the increased penetration of the e-commerce business which runs at a lower gross margin rate.

Selling, general and administrative (SG&A) expenses were $108.2 million compared to $107.9 million in the second quarter of 2016. Adjusted SG&A was $107.6 million compared to $107.9 million in the second quarter last year and leveraged 30 basis points as a percentage of sales primarily as a result of decreased store expenses, including lower store compensation expenses and credit card fees, partially offset by increased expenses related to the investment in our transformation initiatives and increased administrative compensation expenses.

Operating income was $3.2 million, compared to a net operating loss of $2.9 million in the second quarter of 2016. Adjusted operating income in the second quarter of 2017 was $5.1 million, or 1.4 per cent of net sales, compared to adjusted operating income of $0.1 million in the second quarter last year, leveraging 140 basis points compared to last year.

“We continued to deliver outstanding operating results in the second quarter," said Jane Elfers, president and chief executive officer.