Delivers Q2 Comparable Retail Sales
Increase of 13.2% Highest Quarterly Comp in
Company History
The Children’s Place, Inc. (Nasdaq: PLCE), the
largest pure-play children’s specialty apparel retailer in North
America, today announced financial results for the thirteen weeks
ended August 4, 2018.
Jane Elfers, President and Chief Executive Officer announced,
“We set the bar very high for the second quarter and we beat it. We
delivered our highest ever quarterly comp, a positive 13.2% on top
of a positive 3.1% last year. We delivered adjusted EPS of $0.70,
$0.09 above the high end of our guidance range. We delivered
positive brick and mortar sales comps and positive digital sales
comps every month in the second quarter. Additionally, we
drove positive brick and mortar traffic comps every month of the
quarter resulting in a positive mid-single digit traffic increase.
Specifically, our mall traffic was exceptional, delivering a high
single digit positive comp for the quarter. Our momentum has
continued into August and with the majority of back-to-school sales
behind us, our comps are running positive low double digits quarter
to date.”
Ms. Elfers concluded, “We have significant runway ahead of us
through the continued successful execution of our multi-year
strategic growth initiatives. In addition, we are uniquely
positioned from a competitive standpoint to accelerate our
transformation, with the goal of driving additional market share
gains. We are focused on driving customer acquisition, improving
customer retention and increasing customer engagement through our
digital transformation investments. We look forward to continuing
to deliver best-in-class results for our shareholders.”
Financial ResultsThe Company’s results are
reported in this press release on a GAAP and as adjusted, non-GAAP
basis. A reconciliation of non-GAAP to GAAP financial information
is provided at the end of this press release.
Second Quarter 2018 Results
Net sales increased by $75.1 million, or 20.1%, to $448.7
million during the second quarter 2018 from $373.6 million during
the second quarter 2017. This increase was primarily driven
by a positive comparable retail sales increase of 13.2%, an
approximately $22.0 million benefit from the calendar shift related
to the 53rd week in fiscal 2017, and an approximately $5.0 million
due to the new revenue recognition rules.
Net income was $7.5 million, or $0.45 per diluted share, in the
second quarter of 2018, compared to net income of $14.3 million, or
$0.79 per diluted share, the previous year. Adjusted net
income was $11.7 million, or $0.70 per diluted share, compared to
adjusted net income of $15.6 million, or $0.86 per diluted share,
in the second quarter last year. The impact of the accounting
rules related to the income tax impact on share-based compensation
was $0.03 per share in the second quarter compared to $0.68 per
share last year as the majority of share vesting occurred in the
first quarter this year versus the second quarter last year.
Gross profit was $154.8 million in the second quarter, compared
to $128.4 million in the second quarter of 2017. Adjusted gross
profit was $154.8 million in the second quarter, compared to $128.7
million last year. Adjusted gross margin leveraged 10 basis points
to 34.5% of sales, as result of fixed cost leverage based on strong
comparable retail sales, the reclassification of certain items due
to the new revenue recognition rules, offset by lower merchandise
margins along with continued increase in ecommerce penetration.
Selling, general, and administrative expenses were $124.2
million compared to $108.2 million in the second quarter of 2017.
Adjusted selling, general, and administrative expense was $122.5
million compared to $107.6 million in the second quarter last year
and leveraged 150 basis points as a percentage of net sales. The
increase in selling, general, and administrative expenses were
driven by an increase in expenditures in our transformation
initiatives and the reclassification of certain items due to the
new revenue recognition rules, partially offset by lower incentive
compensation expenses.
Operating income was $10.0 million, compared to $3.2 million in
the second quarter of 2017. Adjusted operating income in the second
quarter of 2018 was $15.7 million, or 3.5% of net sales, compared
to adjusted operating income of $5.1 million in the second quarter
last year, leveraging 210 basis points.
Adjusted tax rate was 21.0% for the quarter versus negative 226%
last year, which was impacted by share-based compensation discussed
earlier.
For the second quarter, the Company’s adjusted results exclude
net expenses of approximately $4.2 million, compared to excluded
net expenses of approximately $1.3 million in the second quarter of
2017, comprising certain items, which the Company believes, are not
reflective of the performance of its core business. For the second
quarter of 2018, these excluded items primarily related to asset
impairment charges, restructuring costs, consulting costs for
organizational design efforts, system transition costs, and costs
incurred in connection with the review of the Company’s warehouse
and distribution network. For the second quarter of 2017,
these excluded items were primarily related to expenses associated
with asset impairment charges, a state sales and use tax audit
settlement, a provision for foreign exchange control penalties and
an insurance claim deductible, partially offset by income related
to restructuring costs.
Fiscal Year to Date ResultsNet sales increased
9.2% to $885.0 million and comparable retail sales increased 5.1%
in the first half of 2018, inclusive of a positive impact of
approximately $22.0 million resulting from the calendar shift
related to the 53rd week in fiscal 2017 and approximately $9.0
million due to the new revenue recognition rules.
Net income was $39.0 million, or $2.27 per diluted share, in the
first half of 2018, compared to net income of $50.5 million, or
$2.76 per diluted share, the previous year. Adjusted net
income was $44.9 million, or $2.60 per diluted share, compared to
adjusted net income of $51.6 million, or $2.82 per diluted share,
in the first half last year.
Gross profit was $315.0 million in the first half, compared to
$299.0 million in the first half of 2017. Adjusted gross profit was
$316.2 million in the first half, compared to $299.6 million last
year, and deleveraged 130 basis points to 35.7% of sales.
Selling, general and administrative expenses were $242.7 million
compared to $220.4 million in the first half of 2017. Adjusted
selling, general, and administrative expense was $241.2 million
compared to $214.5 million in the first half of last year and
deleveraged 70 basis points as a percentage of net
sales. The increase in selling, general, and
administrative expenses were driven by an increase in expenditures
in our transformation initiatives and the reclassification of
certain items due to the new revenue recognition rules, partially
offset by lower incentive compensation expenses.
Operating income was $33.1 million, compared to operating income
of $45.5 million in the first half of 2017. Adjusted operating
income in the first half of 2018 was $41.1 million, or 4.6% of net
sales, compared to adjusted operating income of $53.5 million in
the first half last year, deleveraging 200 basis points compared to
last year.
Adjusted tax rate was negative 12.6% for the first half versus
3.0% last year, as a result of lower income and the impact of the
new tax legislation.
During the first half of fiscal 2018, the Company’s adjusted
results exclude net expenses of approximately $5.8 million,
compared to excluded net expenses of approximately $1.0 million in
the first half of 2017, comprising certain items, which the Company
believes, are not reflective of the performance of its core
business. For the first half of 2018, these excluded items
primarily related to asset impairment charges, restructuring costs,
consulting costs for organizational design efforts, system
transition costs, and costs incurred in connection with the review
of the Company’s warehouse and distribution network. For the
first half of fiscal 2017, these excluded items are primarily
related to charges due to a provision for a legal settlement
resulting from a pricing litigation, asset impairment charges,
restructuring costs, a state sales and use tax audit settlement, a
provision for foreign exchange control penalties, and an insurance
claim deductible, partially offset by income associated with the
release of reserves for prior year uncertain tax positions.
Store Openings and ClosuresConsistent with the
Company’s store fleet optimization initiative, the Company closed
10 stores and did not open any stores during the second quarter of
2018. The Company ended the second quarter with 992 stores and
square footage of 4.6 million, a decrease of 4% compared to the
prior year. Since our fleet optimization initiative announced in
2013, the Company has closed 191 stores.
The Company’s international franchise partners opened 11 points
of distribution and closed one in the second quarter, and the
Company ended the quarter with 211 international points of
distribution open and operated by its eight franchise partners in
20 countries.
Capital Return ProgramDuring the second quarter
of 2018, the Company repurchased 440,147 shares for approximately
$25 million, inclusive of shares repurchased under an accelerated
share repurchase program and shares surrendered to cover tax
withholdings associated with the vesting of equity awards held by
management. The Company also paid a quarterly dividend of
approximately $8 million, or $0.50 per share, in the quarter.
For the first half of 2018, the Company repurchased
approximately1.5 million shares for approximately $188 million,
inclusive of shares repurchased under an accelerated share
repurchase program and shares surrendered to cover tax withholdings
associated with the vesting of equity awards held by management.
The Company also paid quarterly dividends totaling approximately
$17 million in the first half of 2018.
Since 2009, the Company has repurchased approximately $1.05
billion of its common stock and, since 2014, paid approximately $83
million in dividends. At the end of the second quarter of 2018,
approximately $307 million remained available for future share
repurchases under the Company’s existing share repurchase
programs.
The Company’s Board of Directors authorized a dividend of $0.50
per share, payable on September 17, 2018 to shareholders of record
at the close of business on September 5, 2018.
OutlookFor fiscal 2018, the Company is raising
its outlook for adjusted net income per diluted share to a range of
$8.09 to $8.29 from a range of $7.95 to $8.20. This compares to
adjusted net income per diluted share of $7.91 in fiscal 2017. The
Company now expects total net sales for the year to be in the range
of $1.945 to $1.955 billion. This guidance assumes a positive
mid-single digit comparable retail sales increase. The
Company expects adjusted operating margin to be in the range of
8.5% to 8.7%.
The Company expects net income per diluted share in the third
quarter of 2018 to be in the range of $2.97 to $3.07 based upon a
mid-single digit comparable retail sales increase. This compares to
adjusted net income per diluted share of $2.58 in the third quarter
of 2017.
Additional details underlying the Company’s outlook for the
third quarter and full year 2018 will be provided on the conference
call and will be available in the conference call transcript, which
will be posted on our website. An audio archive will also be
available on the Company’s website.
Conference Call InformationThe Children’s Place
will host a conference call today at 8:00 a.m. Eastern Time to
discuss its second quarter 2018 results and the Company’s outlook.
The call will be broadcast live at
http://investor.childrensplace.com. An audio archive will be
available on the Company’s website approximately one hour after the
conclusion of the call. A conference call transcript will also be
posted on our website.
Financial ResultsThe Company’s results are
reported in this press release on a GAAP and as adjusted, non-GAAP
basis. Adjusted net income, adjusted net income per diluted share,
adjusted gross profit, adjusted selling, general, and
administrative expense, and adjusted operating income are non-GAAP
measures, and are not intended to replace GAAP financial
information and may be different from non-GAAP measures reported by
other companies. The Company believes the income and expense items
excluded as non-GAAP adjustments are not reflective of the
performance of its core business and that providing this
supplemental disclosure to investors will facilitate comparisons of
the past and present performance of its core business. The
Company uses non-GAAP measures to evaluate and measure operating
performance, including, to measure performance for purposes of the
Company’s annual bonus and long-term incentive compensation plans.
A reconciliation of non-GAAP to GAAP financial information is
provided at the end of this press
release.
About The Children’s Place, Inc.The Children’s
Place is the largest pure-play children’s specialty apparel
retailer in North America. The Company designs, contracts to
manufacture, sells at retail and wholesale, and licenses to sell
fashionable, high-quality merchandise at value prices, primarily
under the proprietary “The Children’s Place,” “Place” and “Baby
Place” brand names. As of August 4, 2018, the Company
operated 992 stores in the United States, Canada and Puerto Rico,
an online store at www.childrensplace.com, and had 211
international points of distribution open and operated by its eight
franchise partners in 20 countries.
Forward Looking Statement
This press release contains or may contain
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995,
including but not limited to statements relating to the Company’s
strategic initiatives and adjusted net income per diluted
share. Forward-looking statements typically are identified by
use of terms such as “may,” “will,” “should,” “plan,” “project,”
“expect,” “anticipate,” “estimate” and similar words, although some
forward-looking statements are expressed differently. These
forward-looking statements are based upon the Company's current
expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results and performance to
differ materially. Some of these risks and uncertainties are
described in the Company's filings with the Securities and Exchange
Commission, including in the “Risk Factors” section of its annual
report on Form 10-K for the fiscal year ended February 3, 2018.
Included among the risks and uncertainties that could cause actual
results and performance to differ materially are the risk that the
Company will be unsuccessful in gauging fashion trends and changing
consumer preferences, the risks resulting from the highly
competitive nature of the Company’s business and its dependence on
consumer spending patterns, which may be affected by changes in
economic conditions, the risk that the Company’s strategic
initiatives to increase sales and margin are delayed or do not
result in anticipated improvements, the risk of delays,
interruptions and disruptions in the Company’s global supply chain,
including resulting from foreign sources of supply in less
developed countries or more politically unstable countries, the
risk that the cost of raw materials or energy prices will increase
beyond current expectations or that the Company is unable to offset
cost increases through value engineering or price increases,
various types of litigation, including class action litigations
brought under consumer protection, employment, and privacy and
information security laws and regulations, the imposition of
regulations affecting the importation of foreign-produced
merchandise, including duties and tariffs, and the uncertainty of
weather patterns. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date they were made. The Company undertakes no obligation to
release publicly any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Contact: Investor Relations, (201)
453-6693 (Tables Follow)
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THE CHILDREN’S PLACE,
INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended |
|
Year-To-Date Ended |
|
|
August 4, |
|
July 29, |
|
August 4, |
|
July 29, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Net
sales |
|
$ |
448,718 |
|
|
$ |
373,601 |
|
|
$ |
885,031 |
|
|
$ |
810,277 |
|
Cost of
sales |
|
|
293,912 |
|
|
|
245,196 |
|
|
|
570,034 |
|
|
|
511,281 |
|
Gross
profit |
|
|
154,806 |
|
|
|
128,405 |
|
|
|
314,997 |
|
|
|
298,996 |
|
Selling,
general and administrative expenses |
|
|
124,223 |
|
|
|
108,227 |
|
|
|
242,689 |
|
|
|
220,354 |
|
Asset
impairment charges |
|
|
3,979 |
|
|
|
974 |
|
|
|
5,236 |
|
|
|
1,458 |
|
Other costs |
|
|
(13 |
) |
|
|
6 |
|
|
|
(9 |
) |
|
|
10 |
|
Depreciation and amortization |
|
|
16,595 |
|
|
|
15,979 |
|
|
|
34,001 |
|
|
|
31,671 |
|
Operating income |
|
|
10,022 |
|
|
|
3,219 |
|
|
|
33,080 |
|
|
|
45,503 |
|
Interest
expense |
|
|
(946 |
) |
|
|
(291 |
) |
|
|
(1,243 |
) |
|
|
(329 |
) |
Income
before taxes |
|
|
9,076 |
|
|
|
2,928 |
|
|
|
31,837 |
|
|
|
45,174 |
|
Provision for income taxes |
|
|
1,590 |
|
|
|
(11,362 |
) |
|
|
(7,186 |
) |
|
|
(5,345 |
) |
Net
income |
|
$ |
7,486 |
|
|
$ |
14,290 |
|
|
$ |
39,023 |
|
|
$ |
50,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per common share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.45 |
|
|
$ |
0.81 |
|
|
$ |
2.32 |
|
|
$ |
2.86 |
|
Diluted |
|
$ |
0.45 |
|
|
$ |
0.79 |
|
|
$ |
2.27 |
|
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
16,636 |
|
|
|
17,704 |
|
|
|
16,819 |
|
|
|
17,659 |
|
Diluted |
|
|
16,715 |
|
|
|
18,177 |
|
|
|
17,225 |
|
|
|
18,289 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE,
INC. |
|
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION TO GAAP |
|
(In thousands, except per share
amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended |
|
Year-To-Date Ended |
|
|
|
August 4, |
|
July 29, |
|
August 4, |
|
July 29, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
7,486 |
|
|
$ |
14,290 |
|
|
$ |
39,023 |
|
|
$ |
50,519 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
Asset
impairment charges |
|
|
3,979 |
|
|
|
974 |
|
|
|
5,236 |
|
|
|
1,458 |
|
|
Organizational design costs |
|
|
715 |
|
|
|
- |
|
|
|
715 |
|
|
|
- |
|
|
Restructuring costs |
|
|
600 |
|
|
|
(75 |
) |
|
|
2,261 |
|
|
|
562 |
|
|
System
transition costs |
|
|
250 |
|
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
Distribution network review costs |
|
|
150 |
|
|
|
- |
|
|
|
150 |
|
|
|
- |
|
|
Provision for legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,000 |
|
|
Sales
tax audit |
|
|
- |
|
|
|
418 |
|
|
|
- |
|
|
|
418 |
|
|
Foreign
exchange penalties |
|
|
- |
|
|
|
300 |
|
|
|
- |
|
|
|
300 |
|
|
Insurance claim deductible |
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
250 |
|
|
Insurance claim settlement |
|
|
- |
|
|
|
- |
|
|
|
(606 |
) |
|
|
- |
|
|
Aggregate impact of
Non-GAAP adjustments |
|
|
5,694 |
|
|
|
1,867 |
|
|
|
8,006 |
|
|
|
7,988 |
|
|
Income tax effect
(1) |
|
|
(1,513 |
) |
|
|
(527 |
) |
|
|
(2,049 |
) |
|
|
(2,894 |
) |
|
Prior year uncertain
tax positions (2) |
|
|
- |
|
|
|
- |
|
|
|
(112 |
) |
|
|
(4,048 |
) |
|
Net impact of Non-GAAP
adjustments |
|
|
4,181 |
|
|
|
1,340 |
|
|
|
5,845 |
|
|
|
1,046 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income |
|
$ |
11,667 |
|
|
$ |
15,630 |
|
|
$ |
44,868 |
|
|
$ |
51,565 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per
common share |
|
$ |
0.45 |
|
|
$ |
0.79 |
|
|
$ |
2.27 |
|
|
$ |
2.76 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
common share |
|
$ |
0.70 |
|
|
$ |
0.86 |
|
|
$ |
2.60 |
|
|
$ |
2.82 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The tax effects of the non-GAAP items are calculated based
on the statutory rate of the jurisdiction in which the discrete
item resides. |
|
|
|
|
|
|
|
|
|
|
|
(2) Prior year tax related to uncertain tax
positions. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended |
|
Year-To-Date Ended |
|
|
|
August 4, |
|
July 29, |
|
August 4, |
|
July 29, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
10,022 |
|
|
$ |
3,219 |
|
|
$ |
33,080 |
|
|
$ |
45,503 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
Asset
impairment charges |
|
|
3,979 |
|
|
|
974 |
|
|
|
5,236 |
|
|
|
1,458 |
|
|
Organizational design costs |
|
|
715 |
|
|
|
- |
|
|
|
715 |
|
|
|
- |
|
|
Restructuring costs |
|
|
600 |
|
|
|
(75 |
) |
|
|
2,261 |
|
|
|
562 |
|
|
System
transition costs |
|
|
250 |
|
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
Distribution network review costs |
|
|
150 |
|
|
|
- |
|
|
|
150 |
|
|
|
- |
|
|
Provision for legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,000 |
|
|
Sales
tax audit |
|
|
- |
|
|
|
418 |
|
|
|
- |
|
|
|
418 |
|
|
Foreign
exchange penalties |
|
|
- |
|
|
|
300 |
|
|
|
- |
|
|
|
300 |
|
|
Insurance claim deductible |
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
250 |
|
|
Insurance claim settlement |
|
|
- |
|
|
|
- |
|
|
|
(606 |
) |
|
|
- |
|
|
Aggregate impact of
Non-GAAP adjustments |
|
|
5,694 |
|
|
|
1,867 |
|
|
|
8,006 |
|
|
|
7,988 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income |
|
$ |
15,716 |
|
|
$ |
5,086 |
|
|
$ |
41,086 |
|
|
$ |
53,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE,
INC. |
RECONCILIATION OF NON-GAAP FINANCIAL
INFORMATION TO GAAP |
(In thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended |
|
Year-To-Date Ended |
|
|
August 4, |
|
July 29, |
|
August 4, |
|
July 29, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
$ |
154,806 |
|
|
$ |
128,405 |
|
|
$ |
314,997 |
|
|
$ |
298,996 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Restructuring costs |
|
|
(50 |
) |
|
|
- |
|
|
|
1,239 |
|
|
|
377 |
|
Insurance claim deductible |
|
|
- |
|
|
|
250 |
|
|
|
- |
|
|
|
250 |
|
Aggregate impact of
Non-GAAP adjustments |
|
|
(50 |
) |
|
|
250 |
|
|
|
1,239 |
|
|
|
627 |
|
|
|
|
|
|
|
|
|
|
Adjusted
Gross Profit |
|
$ |
154,756 |
|
|
$ |
128,655 |
|
|
$ |
316,236 |
|
|
$ |
299,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter Ended |
|
Year-To-Date Ended |
|
|
August 4, |
|
July 29, |
|
August 4, |
|
July 29, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses |
|
$ |
124,223 |
|
|
$ |
108,227 |
|
|
$ |
242,689 |
|
|
$ |
220,354 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
Organizational design costs |
|
|
(715 |
) |
|
|
- |
|
|
|
(715 |
) |
|
|
- |
|
Restructuring costs |
|
|
(650 |
) |
|
|
75 |
|
|
|
(1,022 |
) |
|
|
(185 |
) |
System
transition costs |
|
|
(250 |
) |
|
|
- |
|
|
|
(250 |
) |
|
|
- |
|
Distribution network review costs |
|
|
(150 |
) |
|
|
- |
|
|
|
(150 |
) |
|
|
- |
|
Provision for legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,000 |
) |
Sales
tax audit |
|
|
- |
|
|
|
(418 |
) |
|
|
- |
|
|
|
(418 |
) |
Foreign
exchange penalties |
|
|
- |
|
|
|
(300 |
) |
|
|
- |
|
|
|
(300 |
) |
Insurance claim settlement |
|
|
- |
|
|
|
- |
|
|
|
606 |
|
|
|
- |
|
Aggregate impact of
Non-GAAP adjustments |
|
|
(1,765 |
) |
|
|
(643 |
) |
|
|
(1,531 |
) |
|
|
(5,903 |
) |
|
|
|
|
|
|
|
|
|
Adjusted
Selling, general and administrative expenses |
|
$ |
122,458 |
|
|
$ |
107,584 |
|
|
$ |
241,158 |
|
|
$ |
214,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE CHILDREN’S PLACE, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
August 4, |
|
February 3, |
|
July 29, |
|
|
2018 |
|
2018* |
|
2017 |
Assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
106,405 |
|
$ |
244,519 |
|
$ |
202,332 |
Short-term investments |
|
|
- |
|
|
15,000 |
|
|
55,800 |
Accounts
receivable |
|
|
47,622 |
|
|
26,094 |
|
|
33,077 |
Inventories |
|
|
366,461 |
|
|
324,435 |
|
|
311,047 |
Other
current assets |
|
|
53,224 |
|
|
46,456 |
|
|
54,100 |
Total
current assets |
|
|
573,712 |
|
|
656,504 |
|
|
656,356 |
|
|
|
|
|
|
|
Property
and equipment, net |
|
|
257,055 |
|
|
258,537 |
|
|
263,311 |
Other
assets, net |
|
|
23,577 |
|
|
25,187 |
|
|
51,008 |
Total
assets |
|
$ |
854,344 |
|
$ |
940,228 |
|
$ |
970,675 |
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
Revolving
loan |
|
$ |
89,335 |
|
$ |
21,460 |
|
$ |
54,500 |
Accounts
payable |
|
|
250,184 |
|
|
210,300 |
|
|
219,334 |
Accrued
expenses and other current liabilities |
|
|
107,789 |
|
|
128,764 |
|
|
122,651 |
Total
current liabilities |
|
|
447,308 |
|
|
360,524 |
|
|
396,485 |
|
|
|
|
|
|
|
Other
liabilities |
|
|
83,913 |
|
|
106,005 |
|
|
76,530 |
Total
liabilities |
|
|
531,221 |
|
|
466,529 |
|
|
473,015 |
|
|
|
|
|
|
|
Stockholders' equity |
|
|
323,123 |
|
|
473,699 |
|
|
497,660 |
|
|
|
|
|
|
|
Total
liabilities and stockholders' equity |
|
$ |
854,344 |
|
$ |
940,228 |
|
$ |
970,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Derived from the audited consolidated
financial statements included in the Company's Annual Report on
Form 10-K |
for the fiscal
year ended February 3, 2018. |
|
|
|
|
|
|
|
THE CHILDREN’S PLACE, INC. |
CONDENSED CONSOLIDATED CASH
FLOWS |
(In thousands) |
(Unaudited) |
|
|
26 Weeks Ended |
|
26 Weeks Ended |
|
|
|
|
August 4, |
|
July 29, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
39,023 |
|
|
$ |
50,519 |
|
|
|
Non-cash
adjustments |
|
|
59,669 |
|
|
|
48,524 |
|
|
|
Working
Capital |
|
|
(87,381 |
) |
|
|
(27,595 |
) |
|
|
Net cash
provided by operating activities |
|
|
11,311 |
|
|
|
71,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in investing activities |
|
|
(13,315 |
) |
|
|
(30,174 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
used in financing activities |
|
|
(136,365 |
) |
|
|
(32,351 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash |
|
|
255 |
|
|
|
(300 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents |
|
|
(138,114 |
) |
|
|
8,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of period |
|
|
244,519 |
|
|
|
193,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents, end of period |
|
$ |
106,405 |
|
|
$ |
202,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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