Among the biggest movers in this morning's trading was kiddie apparel retailer TheChildren's Place Retail Stores
Chairman and CEO Ezra Dabah cited "positive momentum" and said "consumers are discovering our brand and responding positively to our merchandising, marketing and customer experience strategies." As evidence, he pointed to the absence of a promotional program the company ran last September.
Now let's examine the numbers. Looking at the net sales figure first, the company opened only three new stores, but closed one, last month -- and that certainly can't be responsible for a nearly 50% jump in sales. At the end of last September, Children's Place operated 621 stores and now numbers 684. Clearly, store openings helped sales -- though it's worth noting that average sales per store for the month rose to $129,000 from $97,000 year over year.
The same-store sales figure is perhaps more interesting for the company that competes largely with Gap
Last September's sales release sheds some light on the subject -- same-store sales actually fell 30% during the month. For an idea of why, however, we've got to go to the quarterly report, where we see that third-quarter (ended Nov. 2, 2002) same-store sales fell in part because of late deliveries and a merchandise mix that missed out on staple items.
This is a common cry of apparel retailers in tough economic times -- which Children's Place also cited as a trouble spot that hurt store traffic and pulled down its transaction and transaction size figures, leading to markdowns. In short, it looks like this month's same-store sales jump is largely because of an easy comparison.
But that doesn't mean it's not notable. With four straight months of same-store sales increases on the books following the key back-to-school season and heading into the holidays, it may be that the company's efforts to fix its merchandise mix by focusing on fashion basics, improving quality, and lowering prices are working. While this may hurt revenue per sale in the year term, it's also helped improve transaction volume and items per transaction.
Investors have given Children's Place a lot of attention in the past year. Even after poking around its same-store sales figures, it's not hard to see why.
Dave Marino-Nachison can be reached at email@example.com.