Children's Place Has Solid Q3

SECAUCUS, NJ-Children’s Place posted solid gains across the board in Q3 results released yesterday. And while the results were certainly buoyed by the numbers generated by Disney Store, which the company acquired in 2004′s Q4, comparable store sales, an important indicator of a company’s performance, rose by a solid 6% from year-to-year.

“I am proud of our Q3 results, and with the increased profitability of our brands,” Ezra Dabah, the company’s chairman/CEO told analysts during an earnings webcast yesterday. “I feel that over the past year, the Children’s Place has further established itself as a leading children’s specialty retailer, while we have, at the same time, achieved the goals and objective we set for the Disney Store acquisition.

“We’re confident that we have the proper strategies in place to continue to grow our market share, to grow profitably and to have a successful holiday season,” added Dabah. He did give some credit for the gains to “cooler weather and the sale of special occasion apparel.”

By the numbers, Q3 net sales rose 57% to $441.1 million, up from $280.5 million. Children’s Place sales by themselves rose 14% to $320 million, while Disney Stores added $121.1 million to the total, accounting for the rest of the gain. Net income, meanwhile, was $29.3 million, or $1.02 per share, up from last year’s $17.7 million, or 65 cents per share. Q3 earnings included an extraordinary gain of $1.7 million related to the completion of purchase accounting for the Disney Store acquisition.

For the nine months ended Oct. 29, net sales rose 62% to $1,129 million from $695.4 million, according to figures released by the company. Children’s Place sales totaled $815.9 million, a gain of 17% over last year, while Disney Store added a total of $313.1 million. Comparable store sales were up a solid 8%.

Net income for the nine months, meanwhile, was $21.2 million, or 74 cents per share, compared to $19.3 million and 70 cents per share a year earlier.

Company officials also projected Q4 earnings per share of $1.61 to $1.66, including an anticipated charge of approximately $2 million due to the American Jobs Creation Act. Full-year earnings are anticipated to be in the $2.35 to $2.40 range.

At the end of Q3, the company had a total of 786 Children’s Store locations and 321 Disney Stores in North American, as well as its online store. The company opened 19 Children’s Place locations in Q3 and closed one, and opened 13 Disney Stores. For the nine months, it opened 39 Children’s Place locations and closed three, and opened 15 Disney Stores and closed one.