Children's Place reduces Q2FY15 net loss by more than 50%
Pure-play children's specialty apparel retailer and NASDAQ-listed, The Children's Place managed to reduce its net loss by more than 50 percent year-on-year for the thirteen weeks to August 2, 2014 period.
Net loss slipped to $10.7 million or negative $0.49 earnings per share in the second fiscal quarter of 2014, compared to a net loss of $23.6 million or negative $1.05 per share from the same fiscal quarter of 2013.
Net sales at Children's Place slipped marginally to $384.6 million in the second quarter of 2014, vis-à-vis, $382.4 million in the second quarter of 2013. However, comparable retail sales rose 0.8 percent in the second quarter 2014.
Children's Place said the second quarter of 2014 quarter included a negative impact of approximately $2.8 million from currency exchange rate fluctuations.
Gross profit in the 13 weeks to August 2013 period stood at $119.1 million, down from $126.2 million in the second quarter of 2013, while gross profit margins as a percentage of sales declined 200 basis points to 31 percent of sales, from fixed costs and merchandise margin deleverage.
Children's Place was able to reduce its selling, general and administrative expenses in the second quarter of 2014 to $117.1 million compared to $124.4 million in the second quarter of 2013.
Operating loss too fell to $16.5 million in the quarter under review, against operating loss of $35.6 million in the second quarter of 2013. Children's Place said that in the second quarter of 2014, it incurred asset impairment charges of $4.0 million.
Children's Place opened 10 stores and closed 3 during the second quarter of 2014 and ended the quarter with 1,113 stores spread over 5.215 million sq. feet, down 1.4 percent compared to the prior year quarter. In the same quarter, it also opened 6 overseas stores.
During the second quarter of 2014, Children's Place repurchased 301,301 shares for approximately $14.5 million. At the end of the second quarter, $73.7 million of the $100 million share repurchase program authorized in March 2014 remained available for future share repurchases.
Children's Place now expects full-year 2014 adjusted net income per diluted share to be in the range of $2.95 to $3.05, which compares to previous guidance of adjusted net income per diluted share in the range of $2.90 to $3.05.
This guidance assumes comparable retail sales for the year will be flat to negative 1 percent. The retailer estimates a $0.09 negative impact from foreign exchange in fiscal 2014.
CEO Jane Elfers said, “We remain committed to the continued execution of our key initiatives, ecommerce growth, expansion of our wholesale and global business, investments in seamless retail and state of the art systems, and fleet rationalization to deliver long-term sustainable growth."
Fibre2fashion News Desk - India