Youth-apparel retailer Children's Place Retail Stores (NASDAQ:PLCE) will report third-quarter earnings on Tuesday. The company had an unsteady start to the year thanks to inventory that didn't match the unseasonably nasty weather. But that weather and softer retail traffic in general have hit many retailers this year -- including competing children's clothing company Carter's (NYSE:CRI).
Children's Place sells proprietary lines of baby, infant, and child clothing at relatively low prices paired with a strong promotional environment. The company had 1,116 stores between the U.S. and Canada as of the beginning of August.
Here's what to watch in the third-quarter report.
Quarter estimates to beat
Analysts estimate third-quarter revenue of $503 million and earnings per share of $1.84. Children's Place has met or beat revenue estimates for the past five quarters but missed on EPS for two of those quarters.
Children's Place predicted earnings per share of between $1.83 and $1.89 if the third quarter has flat comps.
Quarter results to beat
Current-quarter results go head-to-head against the prior year's period to show how much the company has improved -- or fallen. It's also worth comparing the results to the prior quarter to check for any sequential improvement.
Children's Place reported revenue of $501 million in the third quarter last year, which represented 3% growth from the previous year. The company also reported a loss per share of $1.60 and comps growth of 1.1%.
The second quarter featured revenue of $382 million -- a 6% increase on the year -- and a loss per share of $0.42. Comps declined 0.4%.
New comps breakdown
Children's Place plans to start breaking down its comps into geographic regions starting in 2014. The company has previously disclosed these comps in conference calls but will now place the numbers front and center in the earnings releases. And that could start as soon as the third quarter.
Comps will break into two headings: total U.S.comp sales and total Canada comp sales. Each heading will contain the store and e-commerce sales for its specified region.
These metrics make it clearer whether the overall comps are suffering from a specific region's problems. For example, the second quarter featured flat U.S. comp growth and a 3% decline for Canadian comps.
Carter's reported third-quarter earnings in October. Analysts had estimated revenue of $760 million and EPS of $1.12.Carter's met revenue estimates but missed on EPS with $0.97. Comparable-store sales were up 0.5% at the namesake stores and 1% at OshKosh stores.
Foolish final thoughts
The third-quarter report will likely prove rather boring for Children's Place. Expect to see estimates met and some improved comps compared to the second quarter since there wasn't any unusual weather in the third.
Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.