UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report (Date of earliest event reported): November 18,
2010
THE
CHILDREN’S PLACE RETAIL STORES, INC.
(Exact
Name of Registrants as Specified in Their Charters)
Delaware
(State
or Other Jurisdiction of Incorporation)
|
0-23071
|
31-1241495
|
|
(Commission File
Number)
|
(IRS Employer
Identification No.)
|
|
500 Plaza Drive,
Secaucus, New Jersey
|
07094
|
|
(Address of
Principal Executive Offices)
|
(Zip
Code)
|
(201)
558-2400
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results
of Operations and Financial Condition.
On
November 18, 2010, the Company issued a press release containing the Company's
financial results for the third quarter of the fiscal year ended January 29,
2011 (“Fiscal 2010”), updating its estimated range of earnings per diluted share
from continuing operations for Fiscal 2010 and providing a preliminary estimated
range of earnings per diluted share from continuing operations for the fourth
quarter of Fiscal 2010. A copy of the press release is being
furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this report is being
furnished pursuant to Item 2.02 of Form 8-K, insofar as it discloses historical
information regarding the Company’s results of operations and financial
condition as of and for the third quarter of Fiscal 2010. In
accordance with General Instructions B.2 of Form 8-K, the information in this
Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed”
for the purposes of Section 18 of the Securities Exchange Act of 1934 (the
“Exchange Act”), as amended, or otherwise subject to the liability of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act except as shall be
expressly set forth by specific reference in such a filing.
Item
9.01 Financial
Statement and Exhibits.
| (d) | Exhibits | |
|
Exhibit 99.1
|
Press
release, dated November 18, 2010, issued by the Company (Exhibit 99.1 is
furnished as part of this Current Report on Form
8-K).
|
Forward Looking
Statements
This Current Report on Form 8-K,
including Exhibit 99.1, contains forward-looking statements made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements typically are identified by use of
terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,”
“estimate” and similar words, although some forward-looking statements are
expressed differently. Forward-looking statements represent the
Company’s management’s judgment regarding future events. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, the Company can give no assurance that such
expectations will prove to be correct. All statements other than
statements of historical fact included in this Current Report on Form 8-K are
forward-looking statements. The Company cannot guarantee the accuracy
of the forward-looking statements, and you should be aware that the Company’s
actual results could differ materially from those contained in the
forward-looking statements due to a number of factors, including the statements
under the heading “Risk Factors” contained in the Company’s filings with the
Securities and Exchange Commission.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: November
18, 2010
|
THE
CHILDREN’S PLACE RETAIL STORES,
INC.
|
|||
|
|
By:
|
/s/ Susan J. Riley | |
| Name: | Susan J. Riley | ||
|
Title:
|
Executive
Vice President, Finance
and Administration
|
||
Exhibit
99.1
FOR IMMEDIATE
RELEASE
THE
CHILDREN’S PLACE REPORTS THIRD QUARTER 2010 FINANCIAL RESULTS
Management
Updates Fiscal 2010 Earnings Guidance
Secaucus, New Jersey – November 18,
2010 – The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE), the largest pure-play
children’s specialty apparel retailer in North America, today announced third
quarter net sales of $453.4 million for the thirteen weeks ended October 30,
2010, a 2.1% decline compared to $463.2 million in the third quarter of fiscal
2009.
Comparable
retail sales, which include online sales, declined 5.7% in the third quarter of
fiscal 2010 compared to a decline of 1.6% the previous year. During the third
quarter of fiscal 2010, comparable store sales declined 8.8% in the U.S. and
7.9% in Canada, while comparable online sales increased 33.0%.
Income
from continuing operations after tax was $31.2 million, or $1.14 per diluted
share, in the third quarter of fiscal 2010, including a $0.04 per share benefit
resulting from the Company’s repurchase of 1.7 million shares during the
quarter. In the third quarter of fiscal 2009, income from continuing operations
after tax was $38.2 million, or $1.38 per diluted share.
“As we
announced mid-October, third quarter sales and profits for The Children’s Place
were impacted by poorly performing fashion in the back-to-school line as well as
unseasonably warm temperatures,” commented Jane Elfers, President and Chief
Executive Officer of The Children’s Place. “While short-term market conditions
remain challenging for our business, we are making significant progress on our
longer-term growth initiatives which we believe will lead to enhanced sales and
profitability in 2011 and beyond.”
During
the third quarter of fiscal 2010, the Company opened 28 stores.
Fiscal
Year-to-Date
Net sales
from continuing operations were $1,220.8 million fiscal year-to-date 2010, a
3.4% increase compared to $1,180.8 million for the same period last year.
Comparable retail sales declined 1.1% fiscal year-to-date 2010 compared to a
2.7% decline last year.
Income
from continuing operations after tax was $50.9 million, or $1.83 per diluted
share, fiscal year-to-date 2010, including a $0.02 per share benefit from the
share repurchase program announced on August 19, 2010. This compares to income
from continuing operations after tax of $54.7 million, or $1.88 per diluted
share, fiscal year-to-date 2009, which included several transactions that affect
comparability between the years. Excluding those items that affect comparability
from fiscal year-to-date 2009, adjusted income from continuing operations after
tax was $47.3 million, or $1.63 per share. Adjusted income from continuing
operations is a non-GAAP measure which the Company is providing as a
supplemental disclosure. A reconciliation of income from continuing operations
as reported is included in Table 3 of this press release.
Fiscal
year-to-date, the Company has opened 62 stores and closed four.
1
PLCE
– Third Quarter 2010 Financial Results
Page
2
Share
Repurchase Program
On August
19, 2010, the Company announced that the Board of Directors had authorized a
share repurchase program in the amount of $100.0 million. Under the
program, the Company may repurchase shares in the open market at current market
prices at the time of purchase or in privately negotiated transactions. The
timing and actual number of shares repurchased under the program depends on a
variety of factors including price, corporate and regulatory requirements, and
other market conditions, and the Company may suspend or discontinue the program
at any time.
During
the third quarter, the Company repurchased 1.7 million shares for approximately
$80.0 million. Subsequent to the third quarter and through November 17, 2010,
the Company repurchased an additional 0.2 million shares for approximately $8.5
million, which brought the year-to-date total under the share repurchase program
to approximately $88.5 million.
Outlook
The
Company updated its guidance for fiscal 2010 and now projects earnings per
diluted share from continuing operations will be in the range of $2.78 to $2.83
for fiscal 2010, including a $0.07 per share benefit from the 1.9 million shares
repurchased through November 17, 2010, down from its previous guidance of $3.08
to $3.18. The Company provided initial guidance for earnings per diluted share
from continuing operations for the fourth quarter of 2010 to be in the range of
$0.98 to $1.03, including a $0.07 per share benefit from the 1.9 million shares
repurchased through November 17, 2010. The earnings guidance assumes negative
low-single digit comparable retail sales during the fourth quarter and assumes
that currency exchange rates will remain where they are today. This guidance
does not include the impact of further potential share repurchases during the
fourth quarter.
Conference
Call Information
The
Children’s Place will host a conference call to discuss its third quarter 2010
results today at 8:00 a.m. Eastern Time. The call will be broadcast live at
http://investor.childrensplace.com.
An audio archive will be available approximately one hour after the conclusion
of the call.
About
The Children’s Place Retail Stores, Inc.
The
Children’s Place is the largest pure-play children’s specialty apparel retailer
in North America. The Company designs, contracts to manufacture and sells
fashionable, high-quality merchandise at value prices under the proprietary “The
Children's Place” brand name. As of October 30, 2010, the Company owned and
operated 1,005 stores and an online store at www.childrensplace.com.
Forward-Looking
Statements
This
press release (and above referenced call) may contain certain forward-looking
statements regarding future circumstances, including statements relating to the
Company’s positioning, and forecasts regarding earnings per diluted share for
the fourth quarter and fiscal 2010. 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. Some of these risks and uncertainties are described in the
Company's filings with the Securities and Exchange Commission, including in the
“Risk Factors” section of its annual report on Form 10-K for the fiscal year
ended January 30, 2010. Included among the risks and uncertainties that could
cause actual results, events and performance to differ materially are the risk
that the Company will be unsuccessful in gauging fashion trends and changing
consumer preferences, and the risks resulting from the highly competitive nature
of the Company’s business and its dependence on consumer spending patterns,
which may be affected by a downturn in the economy. 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 they were made. The
Company undertakes 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 Company or any other person that the events or circumstances described in
such statement are material.
|
CONTACT:
|
The
Children’s Place Retail Stores,
Inc.
|
Susan
Riley, EVP, Finance & Administration, (201) 558-2400
Jane
Singer, VP, Investor Relations, (201) 453-6955
(Tables
Follow)
2
Table
1
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
thousands, except per share amounts)
(Unaudited)
|
Third
Quarter Ended
|
Year-to-Date
Ended
|
|||||||||||||||
|
October
30,
|
October
31,
|
October
30,
|
October
31,
|
|||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
Net
sales
|
$ | 453,395 | $ | 463,175 | $ | 1,220,829 | $ | 1,180,752 | ||||||||
|
Cost
of sales
|
271,052 | 261,348 | 745,208 | 707,099 | ||||||||||||
|
Gross
profit
|
182,343 | 201,827 | 475,621 | 473,653 | ||||||||||||
|
Selling,
general and administrative expenses
|
114,210 | 118,579 | 334,946 | 336,565 | ||||||||||||
|
Asset
impairment charges
|
354 | 307 | 2,506 | 1,721 | ||||||||||||
|
Depreciation
and amortization
|
17,738 | 18,170 | 53,562 | 53,258 | ||||||||||||
|
Operating
income
|
50,041 | 64,771 | 84,607 | 82,109 | ||||||||||||
|
Interest
(expense), net
|
(390 | ) | (520 | ) | (1,227 | ) | (5,250 | ) | ||||||||
|
Income
from continuing operations before income taxes
|
49,651 | 64,251 | 83,380 | 76,859 | ||||||||||||
|
Provision
for income taxes
|
18,493 | 26,079 | 32,483 | 22,175 | ||||||||||||
|
Income
from continuing operations
|
31,158 | 38,172 | 50,897 | 54,684 | ||||||||||||
|
Income
(loss) from discontinued operations, net of income taxes
|
151 | (389 | ) | 81 | (440 | ) | ||||||||||
|
Net
income
|
$ | 31,309 | $ | 37,783 | $ | 50,978 | $ | 54,244 | ||||||||
|
Basic
earnings (loss) per share amounts
|
||||||||||||||||
|
Income
from continuing operations
|
$ | 1.16 | $ | 1.39 | $ | 1.86 | $ | 1.90 | ||||||||
|
Income
(loss) from discontinued operations
|
0.01 | (0.01 | ) | 0.00 | (0.02 | ) | ||||||||||
|
Net
income
|
$ | 1.16 | $ | 1.38 | $ | 1.86 | $ | 1.88 | ||||||||
|
Basic
weighted average common shares outstanding
|
26,907 | 27,389 | 27,415 | 28,805 | ||||||||||||
|
Diluted
earnings (loss) per share amounts
|
||||||||||||||||
|
Income
from continuing operations
|
$ | 1.14 | $ | 1.38 | $ | 1.83 | $ | 1.88 | ||||||||
|
Income
(loss) from discontinued operations
|
0.01 | (0.01 | ) | 0.00 | (0.02 | ) | ||||||||||
|
Net
income
|
$ | 1.15 | $ | 1.37 | $ | 1.84 | $ | 1.87 | ||||||||
|
Diluted
weighted average common shares outstanding
|
27,238 | 27,622 | 27,764 | 29,038 | ||||||||||||
Note:
Table may not add due to rounding
3
Table
2
THE
CHILDREN’S PLACE RETAIL STORES, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
October
30,
2010
|
January
30,
2010*
|
October
31,
2009
|
||||||||||
|
Assets:
|
||||||||||||
|
Cash
and investments
|
$ | 172,745 | $ | 170,492 | $ | 104,364 | ||||||
|
Accounts
receivable
|
20,945 | 16,910 | 16,739 | |||||||||
|
Inventories
|
232,902 | 206,227 | 250,599 | |||||||||
|
Other
current assets
|
71,326 | 63,253 | 87,965 | |||||||||
|
Total
current assets
|
497,918 | 456,882 | 459,667 | |||||||||
|
Property
and equipment, net
|
317,564 | 312,801 | 311,113 | |||||||||
|
Other
assets, net
|
59,961 | 84,377 | 64,536 | |||||||||
|
Total
assets
|
$ | 875,443 | $ | 854,060 | $ | 835,316 | ||||||
| Liabilities and Stockholders' Equity: | ||||||||||||
|
Accounts
payable
|
$ | 79,626 | $ | 55,547 | $ | 62,612 | ||||||
|
Accrued
expenses and other current liabilities
|
97,853 | 89,969 | 104,886 | |||||||||
|
Total
current liabilities
|
177,479 | 145,516 | 167,498 | |||||||||
|
Other
liabilities
|
118,291 | 119,574 | 114,584 | |||||||||
|
Total
liabilities
|
295,770 | 265,090 | 282,082 | |||||||||
|
Stockholders'
equity
|
579,673 | 588,970 | 553,234 | |||||||||
|
Total
liabilities and stockholders' equity
|
$ | 875,443 | $ | 854,060 | $ | 835,316 | ||||||
* Derived
from the audited consolidated financial statements included in the Company's
Annual Report on Form 10-K for the fiscal year ended January 30,
2010.
4
Table
3
THE
CHILDREN’S PLACE RETAIL STORES, INC.
RECONCILIATION
OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(In
thousands, except per share amounts)
(Unaudited)
|
Third
Quarter Ended
|
Year-to-Date
Ended
|
|||||||||||||||
|
October
30,
2010
|
October
31,
2009
|
October
30,
2010
|
October
31,
2009
|
|||||||||||||
|
Income
from continuing operations, net
of income taxes
|
$ | 31,158 | $ | 38,172 | $ | 50,897 | $ | 54,684 | ||||||||
|
Transactions
affecting comparability:
|
||||||||||||||||
| Gains: | ||||||||||||||||
|
Settlement
of IRS employment tax audit related to stock options
|
- | (166 | ) | - | (4,729 | ) | ||||||||||
|
Expenses:
|
||||||||||||||||
|
Proxy
contest fees
|
- | (146 | ) | - | 2,054 | |||||||||||
|
Prepayment
of term loan expenses/deferred financing fees
|
- | - | - | 2,390 | ||||||||||||
|
Company
restructuring fees
|
- | - | - | 2,805 | ||||||||||||
|
Impairment
charge
|
- | - | - | 852 | ||||||||||||
|
Aggregate
impact of transactions affecting comparability
|
- | (312 | ) | - | 3,372 | |||||||||||
|
Income
tax effect
|
- | 124 | - | (1,349 | ) | |||||||||||
|
Excess
foreign tax credits from repatriation of cash
|
- | - | - | (4,834 | ) | |||||||||||
|
Tax
benefit from resolution of IRS income tax audit
|
- | - | - | (4,540 | ) | |||||||||||
|
Adjusted
(gain) from transactions affecting comparability
|
- | (188 | ) | - | (7,351 | ) | ||||||||||
|
Adjusted
income from continuing operations, net of income taxes
|
$ | 31,158 | $ | 37,984 | $ | 50,897 | $ | 47,333 | ||||||||
|
GAAP
income from continuing operations per diluted share
|
$ | 1.14 | $ | 1.38 | $ | 1.83 | $ | 1.88 | ||||||||
|
Adjusted
income from continuing operations per diluted share
|
$ | 1.14 | $ | 1.38 | $ | 1.83 | $ | 1.63 | ||||||||
###
5