The Children's Place posts decline in Q1 net sales and profit
Prachi Singh | Thursday, May 16 2019
The Children’s Place, Inc., for its first quarter ended May 4, 2019 said net sales decreased 5.5 percent to 412.4 million dollars as a result of a comparable retail sales decrease of 4.6 percent. Net income for the quarter was 4.5 million dollars or 28 cents per diluted share compared to 31.5 million dollars or 1.78 dollars per diluted share, in the first three months of 2018. Adjusted net income was 5.8 million dollars or 36 cents per diluted share compared to 33.2 million dollars or 1.87 dollars per diluted share, in the same quarter last year.
Commenting on the company’s performance, Jane Elfers, President and CEO of The Children’s Place said in a statement: “Our Q1 results significantly exceeded our expectations despite our 70 percent store overlap with the approximately 800 Gymboree and Crazy 8 liquidations that occurred in Q1 and the headwind of a later Easter. We look forward to continuing to deliver for our shareholders in 2019 and beyond.”
Highlights of Q1 results at The Children’s Place
Gross profit for the quarter was 152 million dollars compared to 160.2 million dollars in the first three months of 2018, while adjusted gross profit was 151.4 million dollars compared to 161.5 million dollars last year, and deleveraged 30 basis points to 36.7 percent of net sales. Operating income was 5 million dollars compared to 23.1 million dollars in the first quarter of 2018, while adjusted operating income was 6.6 million dollars compared to 25.4 million dollars last year, and deleveraged 420 basis points to 1.6 percent of sales.
Consistent with the Company’s store fleet optimization initiative, the The Children’s Place opened one store and closed two stores during the first quarter of 2019. The company ended the first quarter with 971 stores and since its fleet optimization initiative announced in 2013, has closed 213 stores. The company’s international franchise partners opened nine points of distribution in the first quarter, and the company ended the quarter with 212 international points of distribution open and operated by its eight franchise partners in 20 countries.
The Children’s Place updates outlook
For fiscal 2019, the company now expects net sales in the range of 1.905 billion dollars to 1.925 billion dollars, comparable retail sales growth of approximately flat to 2018, adjusted operating margin in the range of 6.4 percent to 6.9 percent, and adjusted net income per diluted share in the range of 5.75 dollars to 6.25 dollars.
For the second quarter of 2019, the company expects net sales in the range of 415 million dollars to 420 million dollars, comparable retail sales down in the range of 5 percent to 4 percent, adjusted operating margin in the range of 0.4 percent to 1.3 percent and adjusted net income per diluted share in the range of 0 to 20 cents.
Picture:Facebook/The Children's Place