Net income, excluding charges related to the recent tax reform, came in at $2.52 per share as the Kids’ apparel retailer registered an 8.2% gain in comparable store sales, marking the fourth consecutive year of continued growth. At $570 million, net sales were higher by 9% compared to the year-ago quarter.
Including $52 million in tax-related charges, the company reported a loss of $0.57 per share during the three-month period, compared to a profit of $1.86 per share a year earlier.
Earlier this month, Gap Inc. (GPS), another leading apparel retailer, reported a 5% growth in comparable store sales for its most recent quarter, supported by the strong holiday season. There was a corresponding growth in profit also.
Looking ahead, Children’s Place expects to leverage its digital technologies, supply chain optimization and a new partnership in China to boost market share growth.
The company is looking for operating margin of 12% and earnings of $12 per share by 2020. The annual capital expenditure for the next two years, with the primary focus on transformation initiatives, is estimated to be in the range of $75 million to $85 million.
In the first quarter of 2018, comparable retail sales growth is expected to be in the low single digit, which would translate the earnings outlook to $2.12-$2.22 per share. For the whole of 2018, EPS is estimated to be in the $7.95-$8.20 range.
Comparable store sales of Children’s Place grew 8.2% in Q4, continuing the trend that began four years ago
The specialty retailer also announced a new $250-million share buyback program and raised its quarterly dividend by $0.10 to $0.50 per share. The next dividend will be paid on April 27, 2018.
Separately, Children’s Place said it signed a license agreement with Zhejiang Semir Garment Co. for the Greater China market, covering Mainland China, Taiwan, Hong Kong and Macau. Zhejiang is the parent of Balabala, a leading children’s apparel retailer in China.