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Children's Place Q1 Results Beat View; Lifts FY19 Adj. Earnings Outlook

The Children's Place, Inc. (PLCE), a children's specialty apparel retailer, on Wednesday reported a fall in profit for the first quarter from last year on lower sales.

However, both revenue and adjusted earnings per share for the quarter beat analysts' estimates. In addition, the company raised its adjusted earnings outlook for fiscal 2019.

The company's net income for the first quarter was $4.5 million or $0.28 per share, down from net income of $31.5 million or $1.78 per share in the first three months of 2018.

Adjusted net income was $5.8 million or $0.36 per share, compared to $33.2 million or $1.87 per share in the first three months of last year.

Net sales for the quarter decreased 5.5 percent to $412.4 million from $436.3 million in the year-ago period, primarily as a result of a comparable retail sales decrease of 4.6 percent.

On average, analysts polled by Thomson Reuters expect the company to report loss of $0.49 per share for the quarter on revenues of $399.1 million. Analysts' estimates typically exclude special items.

Jane Elfers, President and Chief Executive Officer said, "Our Q1 results significantly exceeded our expectations despite our 70% store overlap with the approximately 800 Gymboree and Crazy 8 liquidations that occurred in Q1 and the headwind of a later Easter."

Looking ahead to the second quarter, the company forecast adjusted net income per share in the range of $0.00 to $0.20, net sales of $415 million to $420 million, and comparable retail sales down in the range of -5.0 percent to -4.0 percent.

Analysts expect the company to report earnings of $0.10 per share for the quarter on revenues of $420.4 million.

For fiscal 2019, the company now forecasts adjusted net income per share in the range of $5.75 to $6.25, net sales of $1.905 billion to $1.925 billion, and comparable retail sales growth of approximately flat to 2018.

The Street expects earnings of $5.60 per share for the year on revenues of $1.91 billion.

In addition, Children's Place said its Board of Directors has declared a quarterly dividend of $0.56 per share to be paid June 28, 2019 to shareholders of record at the close of business on June 18, 2019.

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