Children's specialty apparel retailer Children's Place Retail Stores, Inc. (PLCE) Thursday reported lower profit for the first quarter, as sales declined but topped estimates.
The company sees a loss for the second quarter that is narrower than last year's and is smaller compared to Street view. Further, the firm lifted its full year earnings forecast, citing improvements seen towards the end of the first quarter.
Jane Elfers, president and chief executive officer, said, "After a difficult start to the quarter, April sales improved significantly with the return of more seasonable weather. Our expenses throughout the quarter were well-controlled. We exceeded our earnings forecast for the first quarter and we are raising guidance for the year to reflect these improved results."
Net income for the quarter was $19.27 million or $0.83 per share, down from $24.73 million or $1.00 per share last year. Adjusted net income totaled $28.3 million or $1.14 per share in the previous year.
On average, 16 analysts polled by Thomson Reuters expected earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales declined 3.5 percent to $423.2 million from $438.51 million in the prior year. Comparable retail sales declined 5.5 percent. Analysts expected revenues of $416.58 million for the quarter.
Gross profit declined 8.6 percent due to deleverage of fixed expenses on negative comparable retail sales and higher supply chain costs as the retailer invested in sourcing capabilities.
The company opened 20 stores and closed four in the quarter, ending the first quarter with 1,111 stores.
Children's Place Retail repurchased 512 thousand shares for about $24.2 million in the quarter. At the end of the quarter, $56.2 million of the $100 million share repurchase program authorized in November 2012 remained available for future share buybacks.
For the second quarter, the firm sees an adjusted loss per share between $0.50 and $0.55, assuming flat comparable retail sales. This compares to an adjusted loss per share of $0.62 in the second quarter of 2012. Wall Street projects a loss of $0.60 per share for the quarter.
The retailer now projects that adjusted earnings per share will be between $3.05 and $3.20 for fiscal 2013, assuming comparable retail sales are flat to slightly negative. This compares to its initial guidance of $2.90 to $3.10, assuming negative low-single digit comparable retail sales. Analysts expect annual earnings of $3.00 per share.
PLCE closed at $51.47 on Wednesday.
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