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2nd Quarter 1998 Earning Release

West Caldwell, New Jersey - August 18, 1998 - The Children's Place Retail Stores, Inc. (Nasdaq:PLCE) today reported sales and earnings for the second quarter ended August 1, 1998.

First Quarter:
Net sales increased 43% to $48.0 million, compared with $33.5 million in 1997. Comparable store sales increased 8% compared with a 1% decrease last year.
Net loss decreased to $0.5 million, compared to the prior year's loss of $1.7 million.
Diluted loss per share improved to $.02 from a $.07 per share loss last year.
11 new stores opened during the second quarter.

First Half:

Net sales increased 43% to $104.0 million compared with $72.7 million in 1997. Comparable store sales grew 7% compared with 2% growth in the prior-year period.
Net earnings increased to $2.2 million from a loss of $0.7 million in 1997.
Diluted earnings per share increased to $.09 from a $.03 per share loss last year.
34 new stores opened during the first half of 1998.

"Increased sales volume and improved gross margin in the first half of 1998 are evidence of the customer's acceptance of our merchandising initiatives and confirm a successful execution of our operating strategies," said Ezra Dabah, Chairman and Chief Executive Officer. "We entered the back-to-school season with very low levels of summer inventory and are well positioned for this very important season. In addition, we are pleased to report that the 81 new stores opened in the past 18 months have exceeded our sales plan for the first half of 1998."

The Children's Place Retail Stores, Inc. is a leading specialty retailer of high quality, value-priced apparel and accessories for children, newborn to age twelve. The Company designs, contracts to manufacture and sells its products under the "The Children's Place" brand name. As of August 1, 1998, the Company operated 189 stores located primarily in regional shopping malls in the eastern half of the United States.


THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED BALANCE SHEET
(In thousands)
(Unaudited)


 
August 1, 1998

 
August 2, 1997

Current assets:          
Cash and cash equivalents $
868
  $
631
Accounts receivable
2,956
 
1,637
Inventories
30,845
 
22,445
Other current assets
17,234

 
10,069

Total current assets

51,903
 
34,782
Property and equipment, net
38,752
 
27,853
Other assets, net
7,653

 
17,113

Total assets $
98,308

  $
79,748

Current liabilities:

         
Revolving credit facility $
12,635
  $
12,464
Accounts payable  
12,497
   
12,564
Accrued expenses and other current liabilities
9,101

 
7,675

Total current liabilities
34,233
 
32,703
Long term debt
0
 
18,439
Other liabilities
2,929

 
2,529

Total liabilities
37,162
 
53,671
Stockholders' equity
61,146

 
26,077

Total liabilities and stockholders' equity $
98,308

  $
79,748

 

 

THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

13 Weeks Ended:
27 Weeks Ended:

 
Aug. 1, 1998

 
Aug. 2,1997

 
Aug. 1, 1998

 
Aug. 2, 1998

Net Sales $
48,014
  $
33,534
  $
104,013
  $
72,737
Cost of sales
32,525

 
23,749
 
66,608
 
49,006

Gross profit
15,489
   
9,785
   
37,405
 
23,731
Selling, general, and administrative expenses
13,793
   
9,785
   
28,254
 
19,198
Pre-opening costs
552
   
750
   
1,663
 
1,222
Depreciation and amortization
1,808

 
1,382
 
3,471
 
2,615

Operating income
(664)
   
(1,922)
   
4,017
 
696
Interest expense, net
(150)
   
987
   
159
 
1,815
Other expense, net
77

 
5
 
77
 
106

Income before income taxes
(841)
   
(2,914)
   
3,781
 
(1,225)
Provision for income taxes
(330)

 
(1,170)
 
1,550
 
(492)

Net income (loss) $
(551)
  $
(1,744)
  $
2,231
  $
(733)
Net income (loss) per share:              
     
Basic  
(0.02)
   
(0.09)
   
0.09
   
(0.04)
Diluted  
(0.02)
   
(0.07)
   
0.09
   
(0.03)
Weighted average number of shares outstanding:
 
               
Basic
24,766
   
20,421
   
24,713
 
20,421
Diluted
25,822
   
23,804
   
25,716
 
23,804