The Children's Place Retail Stores Inc, the largest pure-play children's specialty apparel retailer in North America, announced net sales of $430.8 million for the thirteen weeks ended April 30, 2011, a 2% increase compared to $422.1 million in the first quarter of fiscal 2010. Comparable retail sales declined 3.2% in the first quarter of 2011.
Income from continuing operations after tax was $29.1 million, or $1.10 per diluted share, in the first quarter of 2011, compared to $28.0 million, or $1.00 per diluted share, in the first quarter of 2010.
"We grew net sales and earnings during the first quarter, and expanded merchandise margins as a result of improved merchandise assortments and disciplined inventory management," commented Jane Elfers, President and Chief Executive Officer. "E-commerce sales grew 24% and square footage expanded by 6% as we accelerated new store openings earlier in the year. We significantly strengthened the senior leadership team with the appointments of Eric Bauer -- Chief Operating Officer, Michael Giannelli -- SVP, Design and Bruce Marshall -- SVP, International.
"In spite of higher product costs, we expect gross margin will expand over the next couple of quarters and fiscal 2011 due to the progress being made on our key growth initiatives," Elfers concluded.
During the first quarter of 2011, the Company opened 42 stores and closed five. In the first quarter of 2010, the Company opened 16 stores and closed one.
Share Repurchase Program
During the first quarter of fiscal 2011, the Company repurchased 372.4 thousand shares for approximately $18.4 million. The Company completed the $100 million share repurchase program announced in August 2010 and repurchased approximately $8.4 million of a new $100 million share repurchase program which was authorized by the Board of Directors in March 2011.
Under the 2011 share repurchase program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors, including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue the program at any time, and may thereafter reinstitute purchases, all without prior announcement.
Outlook
The Company updated its guidance for fiscal 2011 to reflect its first quarter results and now projects earnings per diluted share from continuing operations will be in the range of $3.10 to $3.25, compared to its initial guidance of $3.05 to $3.25. This guidance assumes flat comparable retail sales for fiscal 2011.
The Company provided initial guidance for the second quarter of 2011, which is forecasted to be a loss per share from continuing operations of $0.38 cents to $0.43 cents, assuming negative low-single digit comparable retail sales. The Company expects gross margin expansion during the second quarter of 2011 will be more than offset by increased SG&A spending due to higher store expense associated with the accelerated rollout of new stores and higher administrative expenses.
The earnings guidance for the second quarter and fiscal 2011 assumes that currency exchange rates will remain where they are today and does not include the impact of further potential share repurchases.
Children's Place Retail Stores Inc
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