The Children's Place Retail Stores, Inc. Reports Second Quarter 2006 Financial Results; Loss Per Share of $0.53 Compared to Loss Per Share of $0.68 Last Year; Net Sales Increased 24%; Comparable Store Sales Increased 16%
SECAUCUS, N.J.--(BUSINESS WIRE)--Aug. 17, 2006--The Children's Place Retail Stores, Inc. (Nasdaq: PLCE) today reported financial results for the fiscal second quarter and twenty-six weeks ended July 29, 2006.
Second Quarter
- Consolidated net sales for the second quarter ended July 29, 2006 increased 24% to $395.6 million compared to $318.7 million last year. Second quarter sales were comprised of $269.4 million from The Children's Place brand, a 25% increase over last year, and $126.2 million from Disney Store, a 22% increase over last year.
- Consolidated comparable store sales increased 16% in the quarter. The Children's Place brand's comparable store sales increased 16% on top of last year's 4% increase. Disney Store's comparable store sales increased 15%.
- Net loss was $15.2 million, compared to a loss of $18.9 million last year.
- Loss per share was $0.53, including equity compensation expense of $2.7 million pre tax, compared to a loss per share of $0.68 in the second quarter last year. Last year's loss per share as originally reported was $0.66, prior to the adoption of FSP FAS No. 13-1, which required the expensing of rent during construction and increased the loss per share by $0.02 to $0.68.
- During the second quarter, the Company opened 14 Children's Place stores and five Disney Stores. In addition, the Company closed one Children's Place store.
- Consolidated net sales for the six-month period ended July 29, 2006 increased 19% to $822.1 million compared to $688.0 million last year. Sales for the six-month period were comprised of $591.4 million from The Children's Place brand, a 19% increase over last year, and $230.7 million from Disney Store, a 20% increase over last year.
- Consolidated comparable store sales increased 12% for the six-month period. The Children's Place brand's comparable store sales increased 11% on top of last year's 9% increase. Disney Store's comparable store sales increased 15%.
- Net earnings for the six-month period were break-even compared to a net loss of $9.1 million last year.
- Earnings per share were break-even, including equity compensation expense of $5.7 million pre tax, compared to a loss per share of $0.33 last year. Last year's loss per share as originally reported was $0.29, prior to the adoption of FSP FAS No. 13-1, which required the expensing of rent during construction and increased the loss per share by $0.04 to $0.33. Last year's loss per share also included a $0.03 non-cash charge related to acquired Disney Store inventory.
- During the six-month period, the Company opened 22 Children's Place stores and five Disney Stores. In addition, the Company closed two Children's Place stores and two Disney Stores.
Six-Month Period
"We are pleased with our second quarter and first half financial results," said Ezra Dabah, Chairman and Chief Executive Officer of The Children's Place Retail Stores, Inc. "We drove substantial improvements at both brands through consistent execution of our strategies. We are particularly pleased with our first half results, are encouraged by our initial start to the Back-to-School season, and we look forward to the second half of the year."
The Children's Place will host a webcast of its second quarter conference call today at 10:00 a.m., Eastern Time. Interested parties are invited to listen to the call at the Company's web site, www.childrensplace.com. An archive of the webcast will be available on the site through Thursday, August 24, 2006.
The Children's Place Retail Stores, Inc. is a leading specialty retailer of children's merchandise. The Company designs, contracts to manufacture and sells high-quality, value-priced merchandise under the proprietary "The Children's Place" and licensed "Disney Store" brand names. As of July 29, 2006, the Company owned and operated 822 The Children's Place stores and 320 Disney Stores in North America and The Children's Place online store at www.childrensplace.com.
This press release and above referenced call may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the risks and uncertainties described in the Company's filings with the Securities and Exchange Commission. Actual results, events, and performance may differ. Readers or listeners (on the call) are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by The Children's Place or any other person that the events or circumstances described in such statement are material.
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: 26 Weeks Ended:
--------------------- ---------------------
July 29, July 30, July 29, July 30,
---------- ---------- ---------- ----------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales $ 395,614 $ 318,750 $ 822,123 $ 687,967
Cost of sales 261,452 219,675 520,378 447,362
---------- ---------- ---------- ----------
Gross profit 134,162 99,075 301,745 240,605
Selling, general and
administrative expenses 143,688 117,892 273,118 231,316
Depreciation and
amortization 15,489 12,496 29,696 24,620
---------- ---------- ---------- ----------
Operating (loss) income (25,015) (31,313) (1,069) (15,331)
Interest income, net 796 335 1,673 430
---------- ---------- ---------- ----------
(Loss) income before
income taxes (24,219) (30,978) 604 (14,901)
(Benefit) provision for
income taxes (8,973) (12,067) 509 (5,788)
---------- ---------- ---------- ----------
Net (loss) income $ (15,246) $ (18,911) $ 95 $ (9,113)
========== ========== ========== ==========
Basic (loss) income per
share $ (0.53) (0.68) $ 0.00 $ (0.33)
Basic weighted average
number of shares
outstanding 28,899 27,683 28,571 27,533
Diluted (loss) income per
share $ (0.53) $ (0.68) $ 0.00 $ (0.33)
Diluted weighted average
number of shares
outstanding 28,899 27,683 29,651 27,533
Note: Prior periods presented include the retrospective application of
FSP FAS 13-1.
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
July 29, 2006 January 28, 2006 July 30, 2005
------------- ---------------- -------------
Current assets:
Cash and investments $ 110,084 $ 173,323 $ 121,958
Accounts receivable 34,703 28,971 22,162
Inventories 256,093 214,702 180,708
Other current assets 62,047 42,998 60,551
------------- ---------------- -------------
Total current assets 462,927 459,994 385,379
Property and
equipment, net 282,711 248,628 208,507
Other assets, net 57,953 48,698 20,413
------------- ---------------- -------------
Total assets $ 803,591 $ 757,320 $ 614,299
============= ================ =============
Current liabilities:
Revolving credit
facility $ 0 $ 0 $ 23,090
Accounts payable 103,626 82,826 82,065
Accrued expenses and
other current
liabilities 103,904 143,238 89,330
------------- ---------------- -------------
Total current liabilities 207,530 226,064 194,485
Other liabilities 158,481 138,390 112,711
------------- ---------------- -------------
Total liabilities 366,011 364,454 307,196
Stockholders' equity 437,580 392,866 307,103
------------- ---------------- -------------
Total liabilities and
stockholders' equity $ 803,591 $ 757,320 $ 614,299
============= ================ =============
Note: The July 30, 2005 balance sheet includes the retrospective
application of FSP FAS 13-1.
THE CHILDREN'S PLACE RETAIL STORES, INC.
SEGMENT INFORMATION
(In millions)
(Unaudited)
Thirteen Weeks Ended July 29, 2006
---------------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- ---------- ---------- ---------
Net sales $ 269.4 $ 126.2 $ - $ 395.6
Segment operating
profit (loss) 3.5 (4.5) (24.0) (25.0)
Operating profit
(loss) as a
percent of net
sales 1.3 % (3.6)% N/A (6.3)%
Thirteen Weeks Ended July 30, 2005
---------------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- ---------- ---------- ---------
Net sales $ 215.3 $ 103.4 $ - $ 318.7
Segment operating
profit (loss) (2.1) (11.0) (18.2) (31.3)
Operating profit
(loss) as a
percent of net
sales (1.0)% (10.6)% N/A (9.8)%
Twenty Six Weeks Ended July 29, 2006
---------------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- ----------- --------- ---------
Net sales $ 591.4 $ 230.7 $ - $ 822.1
Segment operating
profit (loss) 56.0 (10.9) (46.2) (1.1)
Operating profit
(loss) as a
percent of net
sales 9.5 % (4.7)% N/A (0.1)%
Twenty Six Weeks Ended July 30, 2005
---------------------------------------------
The
Children's Disney Shared Total
Place Store Services Company
----------- ---------- ---------- ---------
Net sales $ 496.0 $ 192.0 $ - $ 688.0
Segment operating
profit (loss) 45.3 (25.0) (35.6) (15.3)
Operating profit
(loss) as a
percent of net
sales 9.1 % (13.0)% N/A (2.2)%
Note: Prior periods presented include the retrospective application of
FSP FAS 13-1.
CONTACT: The Children's Place Retail Stores, Inc.
Susan Riley, 201-453-7160
or
Susan LaBar, 201-453-6955
SOURCE: The Children's Place Retail Stores, Inc.