Children's specialty apparel retailer, The Children's Place said its net income for the thirteen weeks ended November 1, 2014 slipped 15 per cent from a year ago quarter.
For the third quarter of 2014, net income at Children’s Place dipped to $36.9 million or $1.70 per diluted share from net income of $41.7 million, or $1.84 per diluted share in the prior year quarter.
Due to negative impact of $3.9 million from currency exchange rate fluctuations, sales reached $487.3 as against $492.7 million for the third quarter of 2013, while comparable retail sales fell marginally by 0.2 per cent.
Gross profit in the third quarter of 2014 amounted to $190.1 million also down from $201.8 million in the corresponding quarter a year earlier.
Adjusted gross profit stood at $190.3 million in the reporting quarter against $202.9 million last year, and slipped 220 basis points to 39.0 per cent of sales.
The retailer attributed the decline to merchandise margin deleverage and higher supply chain costs compared to the prior year.
As a result of strong expense management, adjusted third quarter of 2014 SG&A expense amounted to $115.0 million, down from $123.2 million in the prior year quarter.
SG&A expense as percentage of sales leveraged 140 basis points from a year earlier quarter to 23.6 per cent of sales.
Adjusted operating income in the third quarter of 2014 touched $60.1 million compared to $63.2 last year’s third quarter and de-leveraged 50 basis points to 12.3 per cent of sales.
During the quarter under review, the apparel retailer recorded asset impairment charges of $4.3 million, as a result of fleet optimization initiative and severance associated with restructuring.
The pure-play kid’s retailer opened 10 stores and closed 6 during the third quarter of 2014 and ended the quarter with 1,117 stores and square footage of 5.223 million, down 1.6 per cent from a year ago.
Its international franchise partners opened 13 stores in the reporting quarter and the retailer ended the quarter with 67 international franchise stores.
"We delivered earnings at the high end of our guidance range for the third quarter of 2014 and continue to make significant progress on our strategic initiatives,” CEO Jane Elfers said.
“We are well positioned to compete effectively in the fourth quarter and are confirming our full year guidance," she added. (AR)
