Children's Place Retail Falls 10% on Lowered EPS View

Shares of Children's Place Retail (NASDAQ: PLCE) are under much pressure after updating its fourth quarter guidance. Children's Place announced that it now expects earnings per diluted share from continuing operations for the fourth quarter of fiscal 2011 to be in the range of $0.85 to $0.90, compared to its previous guidance of $1.19 to $1.24.

The updated guidance assumes that comparable retail sales will be approximately flat for the quarter, and includes an approximately $0.16 per share benefit resulting from the Company becoming permanently reinvested in the current and future earnings of its Asian subsidiaries during fourth quarter 2011 which will result in a lower tax rate going forward.

Commenting on these events, President and CEO Jane Elfers said, "Quarterly sales are projected to be in line with our previous guidance. However, due to the unseasonably warm weather throughout the quarter, we took aggressive markdowns to clear winter apparel and accessories. These discounts, coupled with record high apparel costs in the fourth quarter, significantly impacted our margin."

She continued, "Looking forward to 2012, we expect the progress being made on our key initiatives -- most notably better fashion, introduction of made-for-outlet merchandise, a stronger merchandise assortment for Canada, and continued growth in e-commerce and value center stores, along with a tailwind from lower product costs in the second half -- to drive sales growth and margin expansion."

Currently, shares of Children's Place are down 10% at $47.40.