Issues Guidance for First Quarter and Fiscal 2013

SECAUCUS, N.J., March 26, 2013 (GLOBE NEWSWIRE) -- The Children's Place Retail Stores, Inc. (Nasdaq:PLCE), the largest pure-play children's specialty apparel retailer in North America, today announced financial results for the fourth quarter and fiscal 2012 periods ended February 2, 2013.

President and Chief Executive Officer Jane Elfers commented, "We continued to make significant progress during 2012 and had a strong finish to the year. We delivered record sales of $1.8 billion in fiscal 2012 and a 2% increase in comparable retail sales. Non-GAAP earnings per share increased 11% to $3.23. In addition, we generated $205 million in cash from operations during the year and returned approximately $89 million to shareholders through our share buyback program.

"For the fourth quarter, comparable retail sales increased 4.3%, non-GAAP operating income increased 65% and non-GAAP earnings increased 32% to $1.15 per diluted share," Ms. Elfers said.

Net Income and EPS

The Company announced on February 26, 2013 that it was changing its accounting policy to report its inventory on the cost method instead of the retail inventory method and that it will capitalize additional supply chain costs instead of reporting them as period expenses, effective in the fourth quarter. The Company is reporting fourth quarter and fiscal 2012 results under both the new and previous accounting policies to facilitate comparisons between the two accounting methods. In this press release the term (i) "cost method" reflects the change in accounting principle to report inventory on the cost method and the capitalization of additional supply chain costs, (ii) "adjusted" refers to results in prior periods which have been adjusted to reflect the GAAP cost method, and (iii) "Non-GAAP" refers to results which exclude transactions which the Company believes are not indicative of the performance of its core business. The Company believes that by providing this supplemental disclosure to investors it will facilitate comparisons of its past and present performance. A reconciliation of net income and earnings per diluted share as reported is included in this press release in Table 3.

Under the cost method, the Company reported net income of $19.1 million and earnings per diluted share of $0.80 for the fourteen weeks ended February 2, 2013, compared to adjusted net income of $23.3 million and adjusted earnings per diluted share of $0.93 for the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $63.2 million and earnings per diluted share of $2.61, compared to adjusted net income of $74.3 million and adjusted earnings per diluted share of $2.90 for the 52-week period ended January 28, 2012.

Under the retail method, the Company reported net income of $22.1 million and earnings per diluted share of $0.93 for the fourteen weeks ended February 2, 2013, compared to net income of $24.2 million and earnings per diluted share of $0.97 in the thirteen weeks ended January 28, 2012. For the fifty-three weeks ended February 2, 2013, the Company reported net income of $62.7 million and earnings per diluted share of $2.58, compared to net income of $77.2 million and earnings per diluted share of $3.01 for the fifty-two weeks ended January 28, 2012.

The results reported above include transactions that the Company believes are not indicative of the performance of its core business. The following table also shows Non-GAAP earnings per diluted share under the retail method excluding such transactions for the fiscal quarters and fiscal years ended February 2, 2013 and January 28, 2012.

2012 Results Reported under the Retail Method

Fourth Quarter 2012

• Net sales, which included $21.6 million of sales in the 53^rd week, increased 11.3% to $509.2 million, compared to $457.5 million the prior year.
• Comparable retail sales, which excluded the 53^rd week, increased 4.3% compared to the prior year.
• Gross profit increased 17.5% to $192.7 million, and increased 200 basis points to 37.8% of sales.
• Selling, general and administrative expense increased 12.4% to $136.1 million, and deleveraged 20 basis points to 26.7% of sales.
• Non-GAAP operating income increased 64.8% to $38.7 million, and increased 250 basis points to 7.6% of sales.
• Non-GAAP net income was $27.3 million, a 24.8% increase compared to the prior year.
• Non-GAAP EPS of $1.15 per diluted share compares to $0.87 last year, a 32.2% increase.

Fiscal 2012 Results

• Net sales, which included the 53^rd week, increased 5.5% to $1,809.5, compared to $1,715.9 million the prior year.
• Comparable retail sales, which excluded the 53^rd week, increased 2.0% compared to the prior year.
• Gross profit increased 4.0% to $690.5 million, and deleveraged 50 basis points to 38.2% of sales.
• Non-GAAP selling, general and administrative expense increased 6.2% to $507.0 million, and deleveraged 20 basis points to 28.0% of sales.
• Non-GAAP operating income increased 3.0% to $114.3 million, and deleveraged 20 basis points to 6.3% of sales.
• Non-GAAP net income was $78.3 million, a 4.5% increase compared to prior year.
• Non-GAAP EPS of $3.23 per diluted share compares to $2.92 last year, a 10.6% increase.

Store Openings and Closures

The Company opened four stores and closed 11 during the fourth quarter of 2012. During fiscal 2012, the Company opened 64 stores and closed 18, ending the year with 1,095 stores.

Share Repurchase Program

During the fourth quarter of 2012, the Company repurchased 863 thousand shares for approximately $41.2 million. In fiscal 2012, the Company repurchased 1.8 million shares for approximately $88.9 million. At the end of fiscal 2012, $80.4 million of the $100 million share repurchase program authorized in November 2012 remained available for future share repurchases.

Outlook for 2013 under the Cost Method

With the unfavorable weather and weak macro-economic environment affecting consumer spending quarter-to-date, the Company is forecasting Non-GAAP earnings per diluted share will be between $0.60 and $0.65 for the first quarter of 2013. This compares to Non-GAAP adjusted earnings per diluted share of $1.14 in the first quarter of 2012. This guidance assumes negative high-single digit comparable retail sales for the quarter.

For fiscal 2013, the Company is projecting that Non-GAAP earnings per diluted share will be between $2.90 and $3.10. This compares to Non-GAAP adjusted earnings per diluted share of $3.25 in fiscal 2012. This guidance assumes negative low-single digit comparable retail sales for the year.

This earnings guidance assumes that currency exchange rates will remain where they are today. It does not include the impact of potential share repurchases.

Conference Call Information

The Children's Place will host a conference call to discuss its fourth quarter and fiscal year 2012 results today at 8:30 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available on the Company's website 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, primarily under the proprietary "The Children's Place" brand name. As of February 2, 2013, the Company operated 1,095 stores and an online store at www.childrensplace.com.

Forward Looking Statements

This press release (and the above referenced call) may contain certain forward-looking statements regarding future circumstances, including statements relating to the Company's positioning, and forecasts regarding store openings and earnings per diluted share. 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 and performance 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 28, 2012. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 the continued weakness in the economy or by other factors such as increases in the cost of gasoline and food, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers 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: Jane Singer
         Vice President, Investor Relations
         (201) 453-6955