Children's Place Q4 Results Top View, Issues Weak Outlook; Boost Dividend 13%

(RTTNews) - Specialty apparel retailer Children's Place Retail Stores, Inc. (PLCE) reported Thursday a profit for the fourth quarter that increased from last year, reflecting lower charges and a sales growth.

Both adjusted earnings per share and quarterly sales topped analysts' expectations. The company also provided earnings guidance for the first quarter and full-year 2015, both below Street view.

Separately, the company announced a 13 percent increase in its quarterly dividend.

"The Children's Place delivered fourth quarter adjusted EPS of $0.94 and an increase in comparable retail sales of 3.7%, which was driven by an increase in transactions and average transaction value. Our performance was consistent across product categories and regions during the quarter," President and CEO Jane Elfers said in a statement.

The Secaucus, New Jersey-based largest pure-play children's apparel retailer in North America posted net income of $17.04 million or $0.79 per share for the fourth quarter, higher than $15.65 million or $0.69 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $20.17 million or $0.94 per share, compared to $21.76 million or $0.96 per share posted last year.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.93 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew to $479.24 million from $467.50 million in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $479.00 million by a whisker. Comparable store sales increased 3.7 percent.

The company said the latest quarter included the negative impact of about $4.6 million from currency exchange rate fluctuations.

During the fourth quarter, the company opened one stores and closed 21 stores and ended the quarter with 1,097 stores. The company's international franchise partners opened 5 stores, and ended the quarter with 72 international franchise stores open.

Additionally, the company's Board of Directors approved a 13 percent increase in quarterly dividend to $0.15 share, payable on April 30 to shareholders of record at the close of business on April 9, 2015.

Looking ahead to the first quarter, Children's Place expects adjusted earnings in a range of $0.60 to $0.65 per share, on projected flat to negative 2 percent comparable retail sales. Analysts expect the company to report earnings of $0.73 per share for the quarter.

For fiscal 2015, the company anticipates adjusted earnings in the range of $3.15 to $3.30 per share, on projected flat to positive q percent comparable retail sales. Street is currently looking for full-year 2015 earnings of $3.41 per share.

The company also increased its store closure target as part of its store fleet optimization initiative. It now expects to close a total of about 200 stores through 2017, including the 76 stores closed in 2013 and 2014, an increase from the previous target of 125 store closures in the period from 2013 to 2016.

"Looking ahead to 2015, we are optimistic about our brand's potential. Our merchandise assortments are compelling and our fundamentals are strong. We expect to begin to see results from our investments in seamless retail and state of the art planning and allocation systems in the back half of this year," Elfers added.

PLCE closed Wednesday's regular trading session at $57.88, down $0.52 on a volume of 0.54 million shares. In the past 52-week period, the stock has been trading in a range of $44.54 to $64.16.