Childrens Place (PLCE) has reported 14.73 percent rise in profit for the quarter ended Oct. 29, 2016. The company has earned $44.17 million, or $2.36 a share in the quarter, compared with $38.50 million, or $1.88 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $42.80 million, or $2.29 a share compared with $39.61 million or $1.93 a share, a year ago.
Revenue during the quarter grew 3.92 percent to $473.78 million from $455.91 million in the previous year period. Gross margin for the quarter expanded 146 basis points over the previous year period to 41.06 percent. Total expenses were 86.90 percent of quarterly revenues, down from 87.36 percent for the same period last year. This has led to an improvement of 46 basis points in operating margin to 13.10 percent.
Operating income for the quarter was $62.08 million, compared with $57.65 million in the previous year period.
However, the adjusted operating income for the quarter stood at $62.43 million compared to $59.51 million in the prior year period. At the same time, adjusted operating margin improved 13 basis points in the quarter to 13.18 percent from 13.05 percent in the last year period.
Jane Elfers, president and chief executive officer, said, "We delivered another outstanding quarter, with EPS significantly above the high end of our guidance range. Comparable retail sales increased 4.6%. Comps were positive in all three months and accelerated as the quarter progressed. Inventory decreased 0.6% and is in excellent shape as we enter the fourth quarter. Based on these results, we are raising our adjusted EPS guidance for the full year to $5.00 to $5.05 per share compared to our previous guidance of $4.60 to $4.70 per share.
For the fourth-quarter, On an adjusted basis, the company projects diluted earnings per share to be in the range of $1.43 to $1.48.
For financial year 2016, the company projects diluted earnings per share to be in the range of $5 to $5.05 on adjusted basis.
Operating cash flow improves significantlyChildrens Place has generated cash of $125.55 million from operating activities during the nine month period, up 47.60 percent or $40.49 million, when compared with the last year period. The company has spent $61.75 million cash to meet investing activities during the nine month period as against cash outgo of $16.93 million in the last year period.
The company has spent $62.09 million cash to carry out financing activities during the nine month period as against cash outgo of $56.34 million in the last year period.
Cash and cash equivalents stood at $192.24 million as on Oct. 29, 2016, up 4.52 percent or $8.32 million from $183.92 million on Oct. 31, 2015.
Working capital declines
Childrens Place has witnessed a decline in the working capital over the last year. It stood at $275.43 million as at Oct. 29, 2016, down 8.42 percent or $25.32 million from $300.75 million on Oct. 31, 2015. Current ratio was at 1.69 as on Oct. 29, 2016, down from 1.90 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 3 days for the quarter from 50 days for the last year period. Days sales outstanding were almost stable at 6 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 52 days for the quarter compared with 106 days for the previous year period. At the same time, days payable outstanding was almost stable at 62 days for the quarter, when compared with the previous year period.
Debt increases substantiallyChildrens Place has witnessed an increase in total debt over the last one year. It stood at $65.60 million as on Oct. 29, 2016, up 90.97 percent or $31.25 million from $34.35 million on Oct. 31, 2015. Childrens Place has witnessed an increase in short-term debt over the last one year. It stood at $65.60 million as on Oct. 29, 2016, up 90.97 percent or $31.25 million from $34.35 million on Oct. 31, 2015. Total debt was 6.67 percent of total assets as on Oct. 29, 2016, compared with 3.51 percent on Oct. 31, 2015. Debt to equity ratio was at 0.13 as on Oct. 29, 2016, up from 0.06 as on Oct. 31, 2015. Interest coverage ratio deteriorated to 392.91 for the quarter from 226.96 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
