The Children's Place, Inc. (PLCE) Up on Higher Than Expected 3rd Qtr Earnings

Shares of Secaucus, New Jersey, based The Children's Place, Inc. (PLCE) rose on Tuesday, against the backrop of a broad decline in stocks overall. The Children's Place stock was up 12.55%, rising $6.12 per share, to close at $54.88, on volume of 2,200,517 shares. On Tuesday morning the company disclosed that its third quarter net earnings came in above analysts expectations.

Founded in 1969, The Children's Place, Inc. is a retail chain providings apparel, accessories and footwear for children.
It also designs, contracts to manufacture and sell fashionable, high-quality, value-priced merchandise, the majority of which is under the proprietary 'The Children's Place' brand name. The Children's Place U.S. segment includes the company's U.S. and Puerto Rico based stores. The company operates over 1,000 stores in 12 countries.  The company's stock trades on the NASDAQ.

Early Tuesday morning The Children's Place announced adjusted earnings of $39.6 million, or $1.93 per diluted share for the third quarter, ended October 31. This compared with adjusted earnings of $39.5 million, or $1.82 per diluted share, in the third quarter of 2014. Analysts had been expecting earnings of $1.91 for the quarter.

The news wasn't all good however. Net sales declined -6.4% to $455.9 million during the quarter. This compared to net sales of $487.3 million in the third quarter of 2014. Meanwhile, comparable retail sales decreased -3.0% in the third quarter of 2015.

The quarter included the negative impact of approximately $9.9 million from currency exchange rate fluctuations. On a constant currency basis, net sales were $465.8 million, a -4.4% decrease, compared to net sales of $487.3 million in the third quarter of 2014. Comparable retail sales decreased -3.0% in the third quarter of 2015.

The Children's Place also reported the repurchase of 330,248 shares, as well as its company dividend, returning about $22 million to its shareholders. The company has returned $90 million to shareholders year-to-date, through payment of dividends and the repurchase of 1,302,048 shares. Under the stock repurchase program, and payment of dividends, the company has returned more than $582 million to its shareholders since 2009.

The company announced that the Board of Directors has authorized an additional $250 million under the share repurchase program. As well, a quarterly dividend of $0.15 per share was declared, payable on January 7, 2016 to shareholders of record as of December 17.

The company also announced that as part of its store fleet rationalization initiative, it opened one store and closed two others during the third quarter. For the year, the company opened four new stores and closed 16. The Children's Place also opened five new stores outside  the  US in the third quarter, bringing its total number of international franchise stores to 90. Overall, the company operates 1,085 stores with 5.064 million square feet as of the end of the quarter, which represents a decrease of 2.9% from the same period a year earlier.

"The systems investments we have made in state of the art assortment planning, inventory allocation and replenishment tools are delivering results," reported Jane Elfers, Company President and Chief Executive Officer. "Our digital initiatives continue to gain traction...Our fleet rationalization initiative is on track and we expect to close 200 stores through 2017. Our wholesale and international businesses continue to expand... month. And today, our Board authorized a new $250 million share repurchase and declared a quarterly dividend. This new authorization and dividend reflect our Company's commitment to return excess capital to our shareholders."

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Published on Dec 9, 2015
By Kevin Mercadante

Copyrighted 2016. Content published with author's permission.

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