The Children's Place Q4 comparable sales up 6.9 percent

The Children’s Place said net sales increased 4.5 percent to 520.8 million dollars in the fourth quarter of 2016 and comparable retail sales increased 6.9 percent. Net sales increased 3.4 percent to 1,785 million dollars, including the negative impact of approximately 2.9 million dollars from currency exchange rate fluctuations. Despite rise in net sales and earnings, the company has decided to close a minimum of 300 stores by 2020.

“By any measure, 2016 was a spectacular year for The Children’s Place. We made significant progress on our numerous self-help initiatives. And our product assortment, supported by a foundation of superior design, sourcing and merchandising capabilities, clearly resonated with our customers. Quarter to date, we are generating positive comparable retail sales. We are very encouraged by these results, particularly in light of the significant delay in tax refunds earlier in the quarter,” said Jane Elfers, President and Chief Executive Officer in a press release.

Fourth quarter net income increases 114 percent

Net income was 34.2 million dollars or 1.86 dollars per diluted share, in the fourth quarter compared to net income of 17.5 million dollars or 0.87 dollar per diluted share, the previous year, a 114 percent increase. Adjusted net income was 34.6 million dollars or 1.88 dollars per diluted share compared to 24.1 million dollars or 1.19 dollars in the fourth quarter last year, a 58 percent increase.

Gross profit was 187.9 million dollars compared to 177.5 million dollars in the fourth quarter of 2015. Adjusted gross profit was 187.9 million dollars compared to 177.3 million dollars last year, and leveraged 50 basis points to 36.1 percent of sales, which the company said were primarily as a result of merchandise margin leverage and a higher AUR.

Fiscal 2016 comparable sales rise 4.9 percent

On a constant currency basis, net sales were 1,788 million dollars, a 3.6 percent increase compared to net sales of $1,726 million in the prior year. Comparable retail sales increased 4.9 percent in fiscal 2016.

Net income was 102.3 million dollars or 5.40 dollars per diluted share compared to 57.9 million dollars or 2.80 dollars, the previous year. Adjusted net income was 103 million dollars or 5.43 dollars per diluted share, inclusive of a negative 0.03 dollar impact due to foreign exchange, compared to 74.6 million dollars or 3.60 dollars per diluted share, an increase of 51 percent, compared to the previous year. On a constant currency basis, adjusted net income per diluted share was 5.46 dollars a 52 percent increase compared to the previous year.

Gross profit was 671.6 million dollars compared to 625.1 million dollars last year. Adjusted gross profit was 671.5 million dollars or 37.6 percent of net sales, leveraging 140 basis points compared to last year.

In accordance with our fleet optimization initiative, the company closed 22 stores and did not open any stores during the fourth quarter of 2016. The Company ended fiscal 2016 with 1,039 stores, a decrease of 2.4 percent compared to the prior year. The company’s international franchise partners opened 10 points of distribution in the fourth quarter, and the company ended fiscal with 150 international points of distribution open and operated by its 6 franchise partners in 17 countries.

Expects low-single digit rise in FY17 comparable sales

For fiscal 2017, the company expects net income per diluted share will be in the range of 6.50 dollars to 6.65 dollars compared to adjusted net income per diluted share of 5.43 dollars in fiscal 2016. This guidance assumes a low single digit increase in comparable retail sales for the year.

The company expects net income per diluted share in the first quarter will be between 1.53 dollars and 1.63 dollars compared to adjusted net income per diluted share of 1.32 dollars in the first quarter of 2016. This guidance assumes a low single digit increase in comparable retail sales.

Picture:Facebook/The Children's Place