Children's Place Inc PLCE
Q1 2013 Earnings Call Transcript

Transcript Call Date 05/23/2013

Operator: Good day everyone and welcome to The Children's Place First Quarter 2013 Conference. At this time, all participants are in a listen-only mode, later you will have the opportunity to ask questions during the question-and-answer session. Please note this call maybe recorded and I will be standing by should you need any assistance.

It is now my pleasure to turn the conference over to Ms. Jane Singer. Please go ahead Ma'am.

Jane Singer - VP, IR: Thank you, Zack. Thank you for joining us this morning. With me here today are Jane Elfers, President and Chief Executive Officer; and Mike Scarpa, Chief Operating Officer and Chief Financial Officer.

We issued a press release this morning announcing first quarter 2013 financial results. A copy of the release can be found on our Investor website.

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 two questions, so that everyone will have an opportunity to speak.

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

Jane Elfers - President and CEO: Thank you, Jane. Good morning everyone. We exceeded our guidance for the quarter due to a combination of significantly improved sales and merchandise margins in the month of April and tight expense management throughout the quarter. The results by channel for the quarter were our e-commerce. Sales increased double-digits, up 13% for the quarter. All divisions comped positive and key categories increased double digits with the notable exceptions of shorts and tanks and swimwear. Even the web wasn't immune to the record cold.

Outlet performance was in line. We ended the quarter with an approximately flat comp, which was significantly stronger than our performance in full price stores. We attribute this result to two factors; one, strong customer acceptance of our made-for-outlet product. For example, our made-for-outlet assortment in dresses this year was stronger than last year and delivered significantly better results. In addition, we also delivered a full assortment of accessories and shoes, which we didn't have last year. We now have over 80% of our assortment in made-for-outlet product and it is clearly resonating with our customer; two, a more diverse store base with less reliance on the cold weather state during the first quarter. Due to our geographic diversity in outlets, we were able to perform better in the key volume short and swim categories.

U.S. Place; U.S. Place performance was tough through the end of March and significantly improved in April. For the quarter, the Northeast and Midwest were the most difficult and the South and Southwest the best performing regions.

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