Better late than never, kid apparel retailer Children's Place
Sales soared 25% higher as a result of concept expansion and healthy gains at the store level. The company is clearly doing a few things right, as its namesake stores posted a huge 15% spurt in comps. Its Disney Store locations were no slouch either, with comps climbing 12% higher.
The company posted $38 million in profits for the period, which works out to about $1.27 per share. Back out one-time charges related to stock compensation expenses and the costs of investigating its own backdating scandal, and earnings would have come in at roughly $1.51 a share. I'm using terms like "about" and "roughly" here because the company is still in the process of restating its past four years of financial statements. The company only notes that it has "approximately" 30 million fully diluted shares outstanding. Hey, it's a preliminary report. What did you expect?
The past may be blurry, but the company's vision is clear as to where it's going. Here in fiscal 2007, the retailer is looking to earn between $3.55 and $3.65 a share. The company also mentioned that it is in talks with Disney
The company notes that the modifications are material and may lead to a default on the original deal in which Disney handed over the stores a couple of years ago if left unchecked. That's not likely to happen. This has been a win-win deal. Disney is collecting gobs of passive licensing revenue from what had been a troubled concept that it was scaling back. Children's Place's comps growth speaks for itself. It has also been opening new stores and remodeling older ones.
Disney is fortunate to have hooked up with Children's Place. Some retailers that specialize in apparel basics -- like Gap
So I'll forgive Children's Place for taking so long to give us ballpark figures in its share count. No matter how you slice it, the company is "approximately" close to greatness in specialty retail these days.
For more on these kids' clothes peddlers, check out:
Longtime Fool contributor Rick Munarriz doesn't fit into anything sold at The Children's Place, but he does own shares in Disney. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.