Children’s Place reported fourth-quarter profit and sales that topped estimates as it continues to downsize its store footprint.
In line with its previously reported plan to close 300 stores by the end of fiscal 2021, the children’s clothing and accessories retailer closed 178 stores in fiscal 2021, ending the year with 749 locations. It plans to close approximately 122 stores in 2021, with 25 planned closures in the first quarter, and 97 closures planned by the end of the year, bringing its total closures for the two-year period to its target number.
Children’s Place net income totaled $7.8 million, or $0.53 per share, in the quarter ended Jan. 30, down from $24.2 million, or $1.61 per share, in the year-ago period. Adjusted earnings per share of $1.01 easily topped analysts’ estimates for a loss of $0.23.
Net sales fell 7.8% to $472.9 million, ahead of estimates for $421.0 million. Children’s Place attributed the decrease primarily to the impact of permanent and temporary store closures and the negative impact of reduced operating hours in its mall stores, as mandated by the mall owners. Comparable retail sales increased 1%.
Digital sales rose 38%, accounting for 46% of total sales.
"With no significant COVID-19 temporary U.S. store closures during the quarter, U.S. store sales were better than expected at 81% of last year's levels with traffic down approximately 35%," said Jane Elfers, CEO. “However, about two-thirds of Canadian stores were closed due to the pandemic with sales at 52% of last year's levels and traffic reduced by 62%.”
For the full year, net sales decreased 18.6% to $1.523 billion. Digital sales increased 37%, accounting for 53% of total sales.
“For fiscal 2020, we added 1.9 million new digital customers, converted over 1 million of our store-only customers to omnichannel customers, and increased our mobile app downloads by approximately 60%,” Elfers said.
The company had a net loss was $140.4 million, or ($9.59) per diluted share, compared to net income of $73.3 million, or $4.68 per diluted share, in the previous year.
As of January 30, 2021, Children’s Place had approximately $64 million of cash and cash equivalents and $170 million outstanding on its revolving credit facility. Additionally, it generated approximately $15 million in operating cash flow in the three months ended January 30, 2021.