Upcoming AWS Coverage on Francesca's Holdings Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 22, 2017 / Active Wall St. announces its post-earnings coverage on The Children's Place, Inc. (NASDAQ: PLCE). The Company posted its fourth quarter and fiscal 2016 financial results on March 07, 2017. The specialty retailer of children's apparel shattered top- and bottom-line expectations. Register with us now for your free membership at:

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One of The Children's Place's competitors within the Apparel Stores space, Francesca's Holdings Corp. (NASDAQ: FRAN), reported its Q4 2016 and FY16 financial results on Tuesday, March 21, 2017. AWS will be initiating a research report on Francesca's in the coming days.

Today, AWS is promoting its earnings coverage on PLCE; touching on FRAN. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended January 28, 2017, Children's Place's net sales increased 4.5% to $520.8 million. The Company's comparable retail sales increased 6.9% in Q4 FY16. Children's place' revenue numbers surpassed analysts' consensus of $512 million.

For FY16, Children's Place generated gross profit of $187.9 million compared to $177.5 million in Q4 FY15. The Company's adjusted gross profit was $187.9 million in the reported quarter compared to $177.3 million last year. Children's Place operating income for Q4 FY16 was $48.7 million compared to $29.3 million in Q4 FY15. The Company's adjusted operating income in the reported quarter totaled $50.0 million compared to an adjusted operating income of $33.5 million in the year earlier comparable quarter.

For Q4 FY16, Children's Place posted net income of $34.2 million, or $1.86 per diluted share, compared to net income of $17.5 million, or $0.87 per diluted share in Q4 FY15, an increase of 114%. The Company's adjusted net income for the reported quarter totaled $34.6 million, or $1.88 per diluted share, compared to adjusted net income of $24.1 million, or $1.19 per diluted share, in the prior year's same quarter; posting a 58% increase. The earnings results also smashed past Wall Street's expectations of $1.58 per share.

FY16 Results

Children's Place net sales increased 3.4% to $1.79 billion in FY16; including the negative impact of approximately $2.9 million from currency exchange rate fluctuations. On a constant currency basis, the Company's net sales were $1.79 billion, a 3.6% increase compared to net sales of $1.73 billion in the prior year. Comparable retail sales increased 4.9% in FY16.

Children's Place's net income for FY16 was $102.3 million, or $5.40 per diluted share, compared to net income of $57.9 million, or $2.80 per diluted share, in FY15. The Company's adjusted net income was $103.0 million, or $5.43 per diluted share, inclusive of a negative ($0.03) impact due to foreign exchange compared to $74.6 million, or $3.60 per diluted share, an increase of 51% compared to the previous year.

Children's Place generated gross profit of $671.6 million in FY16 compared to $625.1 million in FY15. The Company's adjusted gross profit was $671.5 million. Children's Place operating income was $147.4 million compared to operating income of $90.1 million in FY15. The Company's adjusted operating income was $151.7 million, or 8.5% of net sales, for FY16 compared to $110.8 million, or 6.4% of net sales, in FY15.

Store Openings and Closures

For Q4 FY16, Children's Place closed 22 stores and did not open any stores during that period. The Company ended FY16 with 1,039 stores and square footage of 4.868 million, a decrease of 2.4% compared to the prior year. Since 2013, when the Company announced fleet optimization initiative, it has closed 142 stores. Children's Place announced that it is now extending its fleet optimization initiative from a target of 200 closures by the end of 2017 to a minimum of 300 closures by 2020. Children's Place' international franchise partners opened 10 points of distribution in Q4 FY16, and the Company ended FY16 with 150 international points of distribution open and operated by its 6 franchise partners in 17 countries.

Capital Return Program

During Q4 FY16, Children's Place returned approximately $43 million to shareholders through the repurchase of 396,600 shares and its quarterly dividend payment of $0.20 per share. In FY16, the Company returned approximately $166 million to shareholders compared to approximately $131 million in FY15. Since 2009, the Company has returned over $790 million to its investors through share repurchases and dividends. At the end of FY16, approximately $120 million remained available for future share repurchases under the Company's existing share repurchase program.

Additionally, in March 2017, the Company's Board of Directors authorized a new $250 million share repurchase program and increased the quarterly dividend by 100% from $0.20 per share to $0.40 per share. The dividend for Q1 FY17 is payable on May 01, 2017 to shareholders of record at the close of business on April 10, 2017.

Outlook

For FY17, the Company expects net income per diluted share will be in the range of $6.50 to $6.65, inclusive of a $0.45 benefit resulting from new accounting rules for the income tax impact on share-based compensation. This compared to adjusted net income per diluted share of $5.43 in FY16. The Company expects net income per diluted share in Q1 FY17 will be between $1.53 and $1.63 compared to adjusted net income per diluted share of $1.32 in Q1 FY16.

Stock Performance

On Tuesday, March 21, 2017, the stock closed the trading session at $113.95, falling 1.89% from its previous closing price of $116.15. A total volume of 561.68 thousand shares have exchanged hands, which was higher than the 3-month average volume of 492.33 thousand shares. The Children's Place's stock price surged 13.67% in the last month, 36.49% in the past six months, and 42.76% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have rallied 12.88%. The stock is trading at a PE ratio of 20.95 and has a dividend yield of 0.88%.

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SOURCE: Active Wall Street