Children’s Place turnaround continues with highest comp gain ever
A slimmed down The Children’s Place blew past analysts’ estimates in its second quarter amid increased traffic at its mall stores.
The Children’s Place has shrunk its portfolio in recent years. In 2013, it announced a “fleet optimization” initiative to shutter 300 stores by 2020. Since then, the retailer has closed 191 stores.
Net income totaled $7.5 million, or 45 cents a share, in the quarter ended Aug. 4, down from $14.3 million, or 79 cents a share, in the year-end period. Higher interest payments and a much higher provision for taxes affected earnings. Adjusted per-share earnings came to 70 cents, ahead of analysts’ estimates of 59 cents.
Sales increased to $448.7 million from $373.6 million, topping estimates of $428 million. Same-store sales rose 13.2%, also more than expected. It was the chain’s highest ever comp gain.
“We delivered positive brick and mortar sales comps and positive digital sales comps every month in the second quarter,” stated Elfers. “Additionally, we drove positive brick and mortar traffic comps every month of the quarter resulting in a positive mid-single digit traffic increase. Specifically, our mall traffic was exceptional, delivering a high single digit positive comp for the quarter.”
Elfers added that the chain’s momentum has continued into August, and, with the majority of back-to-school sales behind it, same-store sales are running positive low double digits quarter to date
“We have significant runway ahead of us through the continued successful execution of our multi-year strategic growth initiatives,” she said. “In addition, we are uniquely positioned from a competitive standpoint to accelerate our transformation, with the goal of driving additional market share gains.”
The retailer raised its outlook for fiscal 2018 and said it now expects adjusted EPS of $8.09 to $.29, up from prior guidance of $7.95 to $8.20. Sales are expected to range from $1.945 billion to $1.955 billion.
Originally appeared in Chain Store Age