The Children’s Place Q2 comparable sales increase by 0.8 percent

REPORT_ The Children's Place, net sales were 384.6 million dollars in the second quarter

of 2014. The quarter included the negative impact of approximately 2.8 million dollars from currency exchange rate fluctuations. This compares to net sales of 382.4 million dollars for the second quarter of 2013. Comparable retail sales increased 0.8 percent for the second quarter 2014.

Net loss was 10.7 million dollars, or 0.49 dollars per share, in the second quarter of 2014, compared to a net loss of 23.6 million dollars, or 1.05 dollars per share, the previous year. Adjusted net loss was 8.2 million dollars, or 0.37 dollars per share, compared to 9.4 million dollars, or 0.42 dollars per share, the previous year.

“Our sales improved significantly in the second quarter, reflecting a rebound in shopping activity with more normalized weather patterns. While we expect the sector to remain highly promotional and the uncertainty surrounding the economy to continue, we are well positioned to compete effectively in the back half of 2014 and we are updating our full year guidance,” commented Jane Elfers, President and Chief Executive Officer.

Elfers further added, “We are making significant strides in our international franchise business, and we remain focused on providing great fashion and value for kids around the world. Today, we announced a partnership with Arvind Lifestyle Brands to open stores in India. Arvind has a proven track record of operating successful apparel brands in India and we are excited to partner with them. Our first openings are slated for fall 2015.”

Gross profit was 119.1 million dollars, compared to 126.2 million dollars in the second quarter of 2013 and declined 200 basis points to 31 percent of sales primarily due to fixed cost and merchandise margin deleverage. The Company opened 10 stores and closed 3 during the second quarter of 2014. The Company ended the quarter with 1,113 stores, a decrease of 1.4 percent compared to the prior year. The Company's international franchise partners opened 6 stores overseas in the second quarter, and the company ended the quarter with 54 international franchise stores open.

Net sales declined 1.3 percent to 794.8 million dollars, compared to 805.6 million dollars in the first half of the prior year. Comparable retail sales declined 1.5 percent. Net income was 2.9 million dollars, or 0.13 dollars per diluted share, in the first half of 2014, compared to net loss of 4.4 million dollars, or 0.19 dollars per share, the previous year. Gross profit decreased 7.6 percent to 267.4 million dollars.

The Company now expects full-year 2014 adjusted net income per diluted share will be in the range of 2.95 dollars to 3.05 dollars, which compares to previous guidance of adjusted net income per diluted share in the range of 2.90 dollars to 3.05 dollars. This guidance assumes comparable retail sales for the year will be flat to negative 1 percent. For the third quarter of fiscal 2014, company is expecting an adjusted net income per diluted share between 1.74 dollars and 1.82 dollars, assuming flat to negative low single digit comparable retail sales. This compares to an adjusted net income per diluted share of 1.89 dollars in the third quarter of 2013.