The Children's Place Reports 2002 Fourth Quarter and Fiscal Year Financial Results
Fourth Quarter 2002 -- Net sales for the fourth quarter decreased 1% to $196.7 million, compared with $198.7 million for the same period in 2001. -- Comparable store sales decreased 19% in the quarter, versus a 6% decrease for the same period last year. -- Net earnings were $2.3 million, versus $18.9 million a year earlier. -- Diluted earnings per share were $0.09 compared with $0.70 in the fiscal 2001 period. -- In the fourth quarter the Company recorded a special charge of $1.6 million after-tax, related to the write down of fixed assets at 19 underperforming stores. Excluding the special charge, the Company reported adjusted net income of $3.9 million, or $0.14 per share. -- The Company opened 16 new stores during the fourth quarter, including two in Canada, and closed two. Fiscal Year 2002 -- Net sales for the fiscal year increased 2% to $671.4 million, from $657.0 million. -- Comparable store sales decreased 16%, compared to an 8% decrease last year. -- Net earnings were $8.9 million, compared to $46.6 million a year-ago. -- Diluted earnings per share were $0.33 compared to earnings per share of $1.73 in fiscal 2001. -- The Company opened 126 new stores during fiscal 2002, including 28 in Canada, and closed three.
The Company noted that month-to-date, February comparable store sales have declined 25%. Weak consumer confidence, severe winter weather and continued declines in mall traffic have contributed to these results.
"We continue to address the challenges we faced last year to energize and strengthen our Company. We enter 2003 committed to our present strategies and are confident in our ability to regain market share," said Ezra Dabah, Chairman and Chief Executive Officer. "As The Children's Place represents style and quality merchandise at value prices, we believe we are well positioned to capitalize on the current trend toward value-minded consumer spending. This renewed emphasis on our unique value proposition will further enhance our competitive position."
Mr. Dabah concluded, "We are pleased with the improvements made to our merchandise assortment, as reflected in our current spring offering. Given the economic and geopolitical environment, we are cautious about our short-term outlook and remain conservative in our overall planning for the year. Our balance sheet remains strong, and we believe that our present strategies will return us to the path of profitable growth."
The Children's Place will host a webcast of its fourth quarter earnings 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 Wednesday, March 5, 2003.
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 February 1, 2003, the Company operated 643 stores, including 615 stores in the United States and 28 stores in Canada. The Company also sells its merchandise through its virtual store located 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 STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
13 Weeks Ended: 52 Weeks Ended:
February 1, February 2, February 1, February 2,
2003 2002 2003 2002
Net sales $ 196,664 $ 198,744 $ 671,409 $ 656,956
Cost of sales 125,229 112,125 422,721 377,286
Gross profit 71,435 86,619 248,688 279,670
Selling,
general and
administrative
expenses 53,988 48,440 194,907 176,103
Special charge 3,170 0 3,170 0
Depreciation
and amortization 9,735 7,850 35,746 27,566
Operating income 4,542 30,329 14,865 76,001
Interest (income)
expense, net (64) (86) (547) 252
Income before
income taxes 4,606 30,415 15,412 75,749
Provision for
income taxes 2,317 11,478 6,478 29,167
Net income $ 2,289 $ 18,937 $ 8,934 $ 46,582
Basic income
per share $ 0.09 $ 0.72 $ 0.34 $ 1.77
Basic weighted
average number
of shares
outstanding 26,562 26,362 26,501 26,262
Diluted income
per share $ 0.09 $ 0.70 $ 0.33 $ 1.73
Diluted weighed
average number
of shares
outstanding 26,718 27,134 26,978 26,964
THE CHILDREN'S PLACE RETAIL STORES, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
February 1, 2003 February 2, 2002
Current assets:
Cash and cash equivalents $ 36,645 $ 45,191
Accounts receivable 13,571 11,895
Inventories 75,417 59,095
Other current assets 19,570 15,844
Total current assets 145,203 132,025
Property and equipment, net 155,000 144,657
Other assets, net 9,125 6,167
Total assets $ 309,328 $ 282,849
Current liabilities:
Revolving credit facility $ 0 $ 0
Accounts payable 30,805 22,177
Accrued expenses and
other current liabilities 35,124 32,506
Total current liabilities 65,929 54,683
Other liabilities 14,391 11,160
Total liabilities 80,320 65,843
Stockholders' equity 229,008 217,006
Total liabilities and
stockholders' equity $ 309,328 $ 282,849
CONTACT: The Children's Place
Seth Udasin, 201/558-2409
Heather Anthony, 201/558-2865
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