Children's Place Inc PLCE
Q1 2012 Earnings Call Transcript

Transcript Call Date 05/17/2012

Operator: Good day everyone and welcome to The Children's Place First Quarter Conference Call. At this time all sites are in a listen-only mode, but later there will be an opportunity to ask questions. As a reminder, today's call maybe recorded.

It is now my pleasure to introduce our first speaker for the day Ms. Jane Singer. Please go ahead Ma'am.

Jane Singer - VP, IR: Thank you, Josh. Good morning, everyone, and thank you for joining us today for a review of The Children's Place Retail Stores, Inc. first quarter 2012 financial results. Participating on this morning's call are Jane Elfers, President and Chief Executive Officer; Eric Bauer, Chief Operating Officer and John Taylor, Vice President, Finance.

Before we begin, I would like to remind participants that any forward-looking remarks made today are subject to the Safe Harbor statement found in this morning's press release, as well as in our SEC filings. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially. The Company undertakes no obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date hereof.

After the prepared remarks, we will open the call to questions. We request that each of you limit yourself to one or two questions, so that we will be able to take questions from as many of you as possible.

Thank you and now I will turn the call over to Jane Elfers for her opening remarks.

Jane Elfers - President and CEO: Thank you, Jane and good morning everyone. First I want to cover our first quarter results, then move into an update on our strategic initiatives and end with second quarter and full year guidance.

The first quarter came in about where we expected, net sales increased 2%. We delivered adjusted earnings per share of $1.10 comparable to the first quarter of last year, comp sales were slightly lower, down 0.7% for the quarter, and gross margin eroded 230 basis points, less than half the erosion we experienced in the fourth quarter as weather was more favorable, particularly during the pre-Easter period.

Several of our key initiatives produced strong results in the first quarter. Big Girls and Big Boys posted positive comps and had the highest increases in AUR and average transaction value. We have been focusing on these businesses and the customers are responding. Our Canadian experienced a significant turnaround in comp sales during the quarter. We improved from a negative 15 comp in the fourth quarter to a negative 4 comp in the first quarter and we expect continued improvement in comp sales throughout 2012 and beyond.

We grew average unit retails across all channels during the quarter. AUR was up 6% on consolidated basis on top of the 3% increase in the first quarter of last year, which is our sixth consecutive quarter of AUR increases. Transaction trends improved in both U.S. and Canadian play stores as we lapped lower inventory levels during the quarter, and we continued our strong focus on inventory control. Balance sheet inventory per square foot was down 1% at the end of the quarter and carryover inventory was down 10%.

Read our Earnings Call Transcript disclaimer.
Add a Comment
E-mail me new replies.