Children's Place raises outlook on strong earnings performance

SECAUCUS, N.J. — The economy may be keeping some families from purchasing new clothes for their children, but that didn't stop The Children's Place from delivering earnings that beat estimates.

The company reported income from continuing operations of $33.7 million, or $1.33 per diluted share, compared with $31.2 million, or $1.14 per diluted share, in the third quarter of 2010. Analysts were expecting earnings of $1.27 per diluted share.

Sales at The Children's Place Retail Stores increased 7% to $484.1 million for the third quarter from sales of $453.4 million for the same period last year. The company reported that same-store sales rose 0.9% in the quarter.

Jane Elfers, president and CEO, commented, "The Children's Place delivered solid financial results for the quarter, including positive comparable-retail sales, accelerated total sales growth, continued gross margin expansion and a strong earnings per share increase. We attribute these results to a combination of our enhanced merchandise offerings, our intense focus on inventory management and the momentum from our other strategic growth initiatives which enabled us to drive sales and expand margin despite significantly higher product costs and a difficult macroeconomic environment."

During the third quarter of 2011, The Children's Place opened 18 stores and closed two.

Following a solid performance for the third quarter, The Children's Place has raised its earnings guidance for fiscal 2011. The company said it now projects earnings per diluted share from continuing operations will be in the range of $3.24 to $3.29 for fiscal 2011, compared with its previous guidance of $3.13 to $3.25. In addition, the company has provided initial guidance for earnings per diluted share from continuing operations for the fourth quarter of 2011 to be in the range of $1.19 to $1.24, assuming flat to slightly positive comparable-retail sales.