Weather hurts Children's Place sales

The Children’s Place blamed unseasonably warm weather for its weak third quarter results and plans to close 200 stores by 2017 as part of its turnaround strategy.



For the third quarter ended Oct. 31, the retailer said same store sales fell 3%. The Children’s Place reported a profit of $38.5 million, or $1.88 a share, compared with a profit of $36.9 million, or $1.70 a share, in the prior year quarter. EPS was $1.93, up from $1.82. Sales rose 6.4% to $455.9 million.



"Comparable retail sales were negative, primarily driven by unseasonably warm weather across most of the United States," Jane Elfers, president and CEO, said. "Comparable retail sales are running positive 4.5% quarter to date, representing approximately 50% of our planned sales volume for the fourth quarter. Our quarter to date results are being driven by increases in key retail selling metrics despite continued weakness in traffic."



The retailer also said it may repurchase up to $250 million shares in a new buyback program. The company has a market value of about $990 million.



Elfers added: "Our digital initiatives continue to gain traction; we implemented a new distributed order management system in the third quarter which is a key component of our omnichannel strategy. Our fleet rationalization initiative is on track and we expect to close 200 stores through 2017. And today, our board authorized a new $250 million share repurchase and declared a quarterly dividend. This new authorization and dividend reflect our Company's commitment to return excess capital to our shareholders.



"In summary, we believe the benefits we are realizing from our multi-pronged transformation strategy are enabling us to navigate through a difficult retail environment."



For the fourth quarter, the company expects EPS of 93 cents to $1.03, and same-store sales to increase in the low single digits.



The company operates 1,085 stores in the United States, Canada and Puerto Rico.