The Children’s Place sales down, CEO still optimistic
The Children’s Place Inc, the largest pure-play children’s specialty apparel retailer in North America, announced on Thursday that its net sales fell 0.1 percent to $436.3 million in the first quarter of 2018. Its comparable retail sales equally fell 1.8 percent.
In a news statement, President and CEO, Jane Elfers, blamed the sales decline on a record number of winter storms and unseasonably cold temperatures. Still, Elfers remained optimistic pertaining results for the rest of the year and the up-coming second quarter.
“We generated comparable retail sales of negative (1.8 percent) in the first quarter vs. a positive 6.1 percent comp in the first quarter of 2017. However, when the weather improved across the country in the 13th week of the quarter, our sales turned aggressively positive. The strong sales momentum has continued and quarter to date, we are currently running a positive 24 percent comp. We expect that this pent up demand for seasonal product will continue and enable us to deliver strong second quarter results,” he said.
The company’s net income was $31.5 million, or $1.78 per diluted share, in the first quarter of 2018, compared to net income of $36.2 million, or $1.97 per diluted share, reported in the previous year. Adjusted net income was $33.2 million, or $1.87 per diluted share, compared to adjusted net income of $35.9 million, or $1.95 per diluted share, in the first quarter last year.
Gross profit was $160.2 million in the first quarter, compared to $170.6 million in the first quarter of 2017, while adjusted gross profit was $161.5 million.
During the quarter, the company closed 12 stores and did not open any new ones.
The retailer has been closing stores since 2013 when it announced its fleet optimization initiative. The company ended the first quarter with 1,002 stores and square footage of 4.7 million, a decrease of 2.7 percent compared to the prior year.
Looking ahead, Elfers said the company continues to be focused on its digital transformation.
“We remain focused on our accelerated digital transformation, with the goal of one to one personalization. This is our single biggest top and bottom line opportunity and our digital investments, with the goal of continuing to gain market share, are focused on improving customer retention, driving customer acquisition and increasing customer engagement with our brand. We are uniquely well-positioned internally and from a competitive standpoint to deliver the next phase of our strategic growth plan.”
For fiscal 2018, the company reaffirmed its outlook for adjusted net income per diluted share in the range of $7.95 to $8.20. Net sales for the year are expected to be in the range of $1.920 billion to $1.935 billion.
In the second quarter of 2018, the company expects net income per diluted share to be in the range of $0.51 to $0.61.
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