Children Place Please Investors With Thumping 1Q Results And Upbeat Forecast

Children Place Inc

is one more retailer that delivered better than expected financial results for the first quarter. The company also lifted its earnings forecast for the current year. Predictably, the stock traded more than 8% up in the pre-market trading on Tuesday. The company reported 66.5 percent jump in net income to $25.985 million from $15.61 million while earnings climbed 82.19 percent to $1.33 a share from $0.73 a share in the prior year quarter. On an adjusted basis, its earnings were $1.32 a share representing a 59% YOY increase. This was $0.28 a share more than the Street analysts' expectations of $1.04 a share. Children Place delivered net sales of $419.35 million compared to $404.87 million representing YOY growth of 3.6 percent. The Street analysts predicted the company to generate $417.59 million sales revenue. On a constant currency basis, the growth would have been 4.1 percent. Its comparable sales advanced 5.1% in the three-month period. The company's President and CEO, Jane Elfers, reacted to the results to say, "Comparable retail sales were positive in all three months of the quarter and were also positive across all divisions and channels. We increased adjusted gross margin by 170 basis points, leveraged adjusted SG&A by 140 basis points and increased adjusted operating margin by 280 basis points. Our inventories were down 11% at quarter-end, on top of an 8% decrease in the first quarter of 2015 and we returned $47 million to shareholders through share repurchases and dividends." The CEO continued to say that "These strong results further demonstrate our ability to deliver on our multi-pronged transformation strategy - superior product, business transformation through technology, global growth through alternate channels of distribution and store fleet optimization. These growth initiatives are led by a best in class management team and supported by a foundation of operational excellence." Moving ahead, Children Place has boosted its adjusted earnings outlook to $4.17 to $4.27 a share from $4.00 - $4.10 a share projected earlier. The company added that the forecast assumed a positive low single digit growth in comparable retail sales for the year. Street analysts' predict the retailer to deliver earnings of $4.09 a share. As far as the second quarter was concerned, the Company expects adjusted net loss per share between ($0.30) and ($0.22) compared to adjusted net loss per share of ($0.33) in the second quarter of 2015. This outlook considered a comparable retail sales growth of 1% to 2% for the same period. In the pre-market trading on Tuesday, the stock traded 8.31% higher following the news.