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Children's Place delivers sales growth, but income slips

SECAUCUS, N.J. — The Children's Place Retail Stores reported that second quarter net sales increased 5% to $360.8 million, compared with $343.5 million in the second quarter of 2011.

Comparable-retail sales grew 3.4% in the quarter, driven by increases in both U.S. and Canadian Place stores and strong e-commerce sales, combined with an improved sales trend in Outlet stores.

GAAP net loss was $18 million, or 74 cents per share, in the second quarter of 2012. As adjusted, net loss was $15.1 million, or 62 cents per share, which beat the upper-end of the company's guidance range for the quarter. In the second quarter of 2011, the company had a net a loss of $9.8 million, or 38 cents per share.

"We achieved solid sales growth during the second quarter. Our focus on differentiated merchandise assortments has worked well for us all year, and we expect continued momentum during the important back-to-school selling season," commented Jane Elfers, president and CEO of The Children's Place. "Despite the continued difficult economic environment, we believe lower apparel costs in the back half coupled with strengthening conversion, transactions and average transaction value, will result in positive comp sales and operating margin expansion in fiscal 2012."

The Company opened 19 stores and closed one, ending the second quarter with 1,080 stores.

The Children's Place now projects that non-GAAP adjusted earnings per diluted share will be between $3.20 and $3.30, compared with its previous guidance of $3.15 to $3.30, assuming positive low-single digit comparable retail sales.

The company provided initial guidance for the third quarter of 2012, and is forecasting non-GAAP adjusted earnings per diluted share between $1.53 and $1.58, assuming positive low-single digit comparable-retail sales.