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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Childrens Place Inc | NASDAQ:PLCE | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.06 | -0.86% | 6.90 | 6.90 | 7.36 | 6.98 | 6.58 | 6.95 | 786,532 | 00:37:39 |
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
31-1241495
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
|
|
Identification Number)
|
|
|
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500 Plaza Drive
|
|
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Secaucus, New Jersey
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|
07094
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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|
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
|
|
|
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|
|
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|
|
|
|
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Item 1.
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
|
|
July 30,
2016 |
|
January 30,
2016 |
|
August 1,
2015 |
||||||
|
(unaudited)
|
|
|
|
(unaudited)
|
||||||
ASSETS
|
|
|
|
|
|
|
|
|
|||
Current assets:
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
170,829
|
|
|
$
|
187,534
|
|
|
$
|
145,753
|
|
Short-term investments
|
75,100
|
|
|
40,100
|
|
|
59,580
|
|
|||
Accounts receivable
|
35,255
|
|
|
26,315
|
|
|
31,283
|
|
|||
Inventories
|
296,584
|
|
|
268,831
|
|
|
314,030
|
|
|||
Prepaid expenses and other current assets
|
31,071
|
|
|
43,042
|
|
|
50,260
|
|
|||
Deferred income taxes
|
18,703
|
|
|
15,486
|
|
|
15,381
|
|
|||
Total current assets
|
627,542
|
|
|
581,308
|
|
|
616,287
|
|
|||
Long-term assets:
|
|
|
|
|
|
|
|
|
|||
Property and equipment, net
|
277,195
|
|
|
290,980
|
|
|
307,100
|
|
|||
Deferred income taxes
|
25,368
|
|
|
22,230
|
|
|
35,256
|
|
|||
Other assets
|
3,432
|
|
|
3,430
|
|
|
3,311
|
|
|||
Total assets
|
$
|
933,537
|
|
|
$
|
897,948
|
|
|
$
|
961,954
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||
LIABILITIES:
|
|
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|
|
|||
Revolving loan
|
$
|
43,860
|
|
|
$
|
—
|
|
|
$
|
29,584
|
|
Accounts payable
|
198,675
|
|
|
154,541
|
|
|
193,723
|
|
|||
Income taxes payable
|
4,635
|
|
|
1,611
|
|
|
2,571
|
|
|||
Accrued expenses and other current liabilities
|
111,994
|
|
|
118,870
|
|
|
119,363
|
|
|||
Total current liabilities
|
359,164
|
|
|
275,022
|
|
|
345,241
|
|
|||
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|||
Deferred rent liabilities
|
66,201
|
|
|
70,250
|
|
|
75,078
|
|
|||
Other tax liabilities
|
10,132
|
|
|
9,713
|
|
|
5,827
|
|
|||
Other long-term liabilities
|
15,620
|
|
|
15,170
|
|
|
6,983
|
|
|||
Total liabilities
|
451,117
|
|
|
370,155
|
|
|
433,129
|
|
|||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
|
|||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
|
|||
Preferred stock, $1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, $0.10 par value, 100,000 shares authorized; 18,565, 19,479 and 20,457 issued; 18,524, 19,440 and 20,420 outstanding
|
1,857
|
|
|
1,948
|
|
|
2,046
|
|
|||
Additional paid-in capital
|
233,900
|
|
|
232,182
|
|
|
229,792
|
|
|||
Treasury stock, at cost (41, 39 and 37 shares)
|
(2,063
|
)
|
|
(1,939
|
)
|
|
(1,813
|
)
|
|||
Deferred compensation
|
2,063
|
|
|
1,939
|
|
|
1,813
|
|
|||
Accumulated other comprehensive loss
|
(19,761
|
)
|
|
(27,485
|
)
|
|
(20,264
|
)
|
|||
Retained earnings
|
266,424
|
|
|
321,148
|
|
|
317,251
|
|
|||
Total stockholders’ equity
|
482,420
|
|
|
527,793
|
|
|
528,825
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
933,537
|
|
|
$
|
897,948
|
|
|
$
|
961,954
|
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||||||
Net sales
|
$
|
371,416
|
|
|
$
|
366,455
|
|
|
$
|
790,767
|
|
|
$
|
771,320
|
|
Cost of sales (exclusive of depreciation and amortization)
|
247,545
|
|
|
251,451
|
|
|
501,545
|
|
|
504,207
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
123,871
|
|
|
115,004
|
|
|
289,222
|
|
|
267,113
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
107,903
|
|
|
118,342
|
|
|
217,115
|
|
|
232,856
|
|
||||
Asset impairment charges
|
2,826
|
|
|
1,452
|
|
|
2,826
|
|
|
1,452
|
|
||||
Other costs
|
191
|
|
|
76
|
|
|
259
|
|
|
73
|
|
||||
Depreciation and amortization
|
15,891
|
|
|
15,252
|
|
|
32,352
|
|
|
29,646
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
(2,940
|
)
|
|
(20,118
|
)
|
|
36,670
|
|
|
3,086
|
|
||||
Interest expense
|
(176
|
)
|
|
(205
|
)
|
|
(250
|
)
|
|
(381
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
(3,116
|
)
|
|
(20,323
|
)
|
|
36,420
|
|
|
2,705
|
|
||||
Provision (benefit) for income taxes
|
(1,105
|
)
|
|
(6,628
|
)
|
|
12,446
|
|
|
793
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(2,011
|
)
|
|
$
|
(13,695
|
)
|
|
$
|
23,974
|
|
|
$
|
1,912
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.11
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
1.26
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
(0.11
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
1.24
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cash dividends declared and paid per common share
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
$
|
0.40
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
18,811
|
|
|
20,576
|
|
|
19,006
|
|
|
20,794
|
|
||||
Diluted
|
18,811
|
|
|
20,576
|
|
|
19,357
|
|
|
21,059
|
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
||||||||
Net income (loss)
|
$
|
(2,011
|
)
|
|
$
|
(13,695
|
)
|
|
$
|
23,974
|
|
|
$
|
1,912
|
|
Other Comprehensive Income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(4,114
|
)
|
|
(8,099
|
)
|
|
7,589
|
|
|
(3,000
|
)
|
||||
Change in fair value of cash flow hedges, net of income taxes of $16, $(83), $(49) and $(83), respectively
|
(44
|
)
|
|
229
|
|
|
135
|
|
|
229
|
|
||||
Comprehensive income (loss)
|
$
|
(6,169
|
)
|
|
$
|
(21,565
|
)
|
|
$
|
31,698
|
|
|
$
|
(859
|
)
|
|
Twenty-six Weeks Ended
|
||||||
|
July 30,
2016 |
|
August 1,
2015 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
23,974
|
|
|
$
|
1,912
|
|
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
32,352
|
|
|
29,646
|
|
||
Stock-based compensation
|
12,631
|
|
|
8,174
|
|
||
Excess tax benefits from stock-based compensation
|
(1,470
|
)
|
|
(1,064
|
)
|
||
Deferred taxes
|
(10,468
|
)
|
|
(126
|
)
|
||
Asset impairment charges
|
2,826
|
|
|
1,452
|
|
||
Deferred rent expense and lease incentives
|
(5,458
|
)
|
|
(4,936
|
)
|
||
Other
|
532
|
|
|
624
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Inventories
|
(25,972
|
)
|
|
(17,409
|
)
|
||
Prepaid expenses and other assets
|
(6,123
|
)
|
|
(1,778
|
)
|
||
Income taxes payable, net of prepayments
|
18,399
|
|
|
(6,192
|
)
|
||
Accounts payable and other current liabilities
|
32,670
|
|
|
31,984
|
|
||
Deferred rent and other liabilities
|
1,290
|
|
|
(2,186
|
)
|
||
Total adjustments
|
51,209
|
|
|
38,189
|
|
||
Net cash provided by operating activities
|
75,183
|
|
|
40,101
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Property and equipment purchases, lease acquisition and software costs
|
(16,036
|
)
|
|
(20,149
|
)
|
||
Purchase of short-term investments
|
(75,100
|
)
|
|
(59,580
|
)
|
||
Redemption of short-term investments
|
40,100
|
|
|
52,000
|
|
||
Change in company-owned life insurance policies
|
(151
|
)
|
|
14
|
|
||
Net cash used in investing activities
|
(51,187
|
)
|
|
(27,715
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Purchase and retirement of common stock, including transaction costs
|
(84,693
|
)
|
|
(63,375
|
)
|
||
Cash dividends paid
|
(7,556
|
)
|
|
(6,199
|
)
|
||
Borrowings under revolving credit facility
|
279,815
|
|
|
315,093
|
|
||
Repayments under revolving credit facility
|
(235,955
|
)
|
|
(285,509
|
)
|
||
Exercise of stock options
|
438
|
|
|
438
|
|
||
Excess tax benefits from stock-based compensation
|
1,470
|
|
|
1,064
|
|
||
Net cash used in financing activities
|
(46,481
|
)
|
|
(38,488
|
)
|
||
Effect of exchange rate changes on cash
|
5,780
|
|
|
(1,436
|
)
|
||
Net decrease in cash and cash equivalents
|
(16,705
|
)
|
|
(27,538
|
)
|
||
Cash and cash equivalents, beginning of period
|
187,534
|
|
|
173,291
|
|
||
Cash and cash equivalents, end of period
|
$
|
170,829
|
|
|
$
|
145,753
|
|
|
Twenty-six Weeks Ended
|
||||||
|
July 30,
2016 |
|
August 1,
2015 |
||||
OTHER CASH FLOW INFORMATION:
|
|
|
|
|
|
||
Net cash paid during the period for income taxes
|
$
|
3,632
|
|
|
$
|
6,721
|
|
Cash paid during the period for interest
|
794
|
|
|
723
|
|
||
Increase (decrease) in accrued purchases of property and equipment
|
562
|
|
|
(1,270
|
)
|
1.
|
BASIS OF PRESENTATION
|
•
|
Second Quarter 2016
— The thirteen weeks ended
July 30, 2016
.
|
•
|
Second Quarter 2015
— The thirteen weeks ended
August 1, 2015
.
|
•
|
Year-To-Date 2016
— The twenty-six weeks ended
July 30, 2016
.
|
•
|
Year-To-Date 2015
— The twenty-six weeks ended
August 1, 2015
.
|
•
|
FASB — Financial Accounting Standards Board.
|
•
|
SEC — U.S. Securities and Exchange Commission.
|
•
|
U.S. GAAP — Generally Accepted Accounting Principles in the United States.
|
•
|
FASB ASC — FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants.
|
•
|
management, having the authority to approve the action, commits to a plan of termination;
|
•
|
the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date;
|
•
|
the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; and
|
•
|
actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.
|
|
|
Other Associated Costs
|
|
Lease Termination Costs
|
|
Total
|
||||||
Balance at January 30, 2016
|
|
$
|
—
|
|
|
$
|
770
|
|
|
$
|
770
|
|
Restructuring costs
|
|
(27
|
)
|
|
286
|
|
|
259
|
|
|||
Payments and reductions
|
|
27
|
|
|
(583
|
)
|
|
(556
|
)
|
|||
Balance at July 30, 2016
|
|
$
|
—
|
|
|
$
|
473
|
|
|
$
|
473
|
|
•
|
Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
|
•
|
Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities
|
2.
|
STOCKHOLDERS’ EQUITY
|
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
|
July 30, 2016
|
|
August 1, 2015
|
||||||||||
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
||||||
Shares repurchases related to:
|
|
|
|
|
|
|
|
|
||||||
2014 Share Repurchase Program
|
|
—
|
|
|
—
|
|
|
640
|
|
|
39,791
|
|
||
2015 Share Repurchase Program
|
|
310
|
|
|
20,726
|
|
|
331
|
|
|
21,867
|
|
||
2015 $250 Million Share Repurchase Program
(1)
|
|
740
|
|
|
57,993
|
|
|
—
|
|
|
—
|
|
||
Withholding taxes and other
|
|
78
|
|
|
5,974
|
|
|
27
|
|
|
1,717
|
|
||
Shares acquired and held in treasury
|
|
2
|
|
|
$
|
124
|
|
|
2
|
|
|
$
|
131
|
|
(1)
|
Subsequent to
July 30, 2016
and through August 29, 2016, the Company repurchased
0.2 million
shares for approximately
$14.5 million
.
|
3.
|
STOCK-BASED COMPENSATION
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||||||
Deferred Awards
|
$
|
2,121
|
|
|
$
|
2,477
|
|
|
$
|
4,427
|
|
|
$
|
5,694
|
|
Performance Awards
|
3,966
|
|
|
1,829
|
|
|
8,204
|
|
|
2,480
|
|
||||
Total stock-based compensation expense
(1)
|
$
|
6,087
|
|
|
$
|
4,306
|
|
|
$
|
12,631
|
|
|
$
|
8,174
|
|
(1)
|
During the
Second Quarter 2016
and the
Second Quarter 2015
, approximately
$0.9 million
and
$0.9 million
, respectively, were included in cost of sales. During
Year-To-Date 2016
and
Year-To-Date 2015
, approximately
$1.5 million
and
$1.4 million
, respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expenses.
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Unvested Deferred Awards, beginning of period
|
473
|
|
|
$
|
54.62
|
|
Granted
|
182
|
|
|
71.49
|
|
|
Vested
|
(145
|
)
|
|
54.39
|
|
|
Forfeited
|
(18
|
)
|
|
59.66
|
|
|
Unvested Deferred Awards, end of period
|
492
|
|
|
$
|
60.73
|
|
|
Number of
Shares
(1)
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Unvested Performance Awards, beginning of period
|
375
|
|
|
$
|
61.37
|
|
Granted
|
204
|
|
|
75.19
|
|
|
Vested shares, including shares vested in excess of target
|
(54
|
)
|
|
48.26
|
|
|
Forfeited
|
(3
|
)
|
|
62.50
|
|
|
Unvested Performance Awards, end of period
|
522
|
|
|
$
|
68.12
|
|
(1)
|
For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. For those awards in which the performance period is not yet complete, the number of unvested shares is based on the participants earning their Target Shares at
100%
.
|
|
Number of
Options
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(in thousands)
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Options outstanding, beginning of period
|
15
|
|
|
$
|
29.05
|
|
|
2.3
|
|
$
|
455
|
|
Exercised
|
(15
|
)
|
|
29.05
|
|
|
N/A
|
|
675
|
|
||
Options outstanding and exercisable, end of period
|
—
|
|
|
$
|
—
|
|
|
0.0
|
|
$
|
—
|
|
4.
|
NET INCOME (LOSS) PER COMMON SHARE
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30, 2016
|
|
August 1, 2015
|
|
July 30, 2016
|
|
August 1, 2015
|
||||||||
Net income (loss)
|
$
|
(2,011
|
)
|
|
$
|
(13,695
|
)
|
|
$
|
23,974
|
|
|
$
|
1,912
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
|
18,811
|
|
|
20,576
|
|
|
19,006
|
|
|
20,794
|
|
||||
Dilutive effect of stock awards
|
—
|
|
|
—
|
|
|
351
|
|
|
265
|
|
||||
Diluted weighted average common shares
|
18,811
|
|
|
20,576
|
|
|
19,357
|
|
|
21,059
|
|
||||
Antidilutive stock awards
|
2
|
|
|
821
|
|
|
1
|
|
|
1
|
|
5.
|
PROPERTY AND EQUIPMENT
|
|
Asset
Life
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|
|||
Land and land improvements
|
—
|
|
$
|
3,403
|
|
|
$
|
3,403
|
|
|
$
|
3,403
|
|
Building and improvements
|
20-25 yrs
|
|
35,548
|
|
|
35,548
|
|
|
35,548
|
|
|||
Material handling equipment
|
10-15 yrs
|
|
48,345
|
|
|
48,345
|
|
|
48,479
|
|
|||
Leasehold improvements
|
3-15 yrs
|
|
326,292
|
|
|
317,410
|
|
|
336,327
|
|
|||
Store fixtures and equipment
|
3-10 yrs
|
|
227,528
|
|
|
218,566
|
|
|
231,964
|
|
|||
Capitalized software
|
3-10 yrs
|
|
181,957
|
|
|
177,849
|
|
|
128,051
|
|
|||
Construction in progress
|
—
|
|
15,641
|
|
|
8,357
|
|
|
39,317
|
|
|||
|
|
|
838,714
|
|
|
809,478
|
|
|
823,089
|
|
|||
Accumulated depreciation and amortization
|
|
|
(561,519
|
)
|
|
(518,498
|
)
|
|
(515,989
|
)
|
|||
Property and equipment, net
|
|
|
$
|
277,195
|
|
|
$
|
290,980
|
|
|
$
|
307,100
|
|
(i)
|
the prime rate plus a margin of
0.50%
to
0.75%
based on the amount of the Company’s average excess availability under the facility; or
|
(ii)
|
the London InterBank Offered Rate, or “LIBOR”, for an interest period of
one, two, three or six
months, as selected by the Company, plus a margin of
1.25%
to
1.50%
based on the amount of the Company’s average excess availability under the facility.
|
|
July 30,
2016 |
|
January 30,
2016 |
|
August 1,
2015 |
||||||
Credit facility maximum
|
$
|
250.0
|
|
|
$
|
250.0
|
|
|
$
|
200.0
|
|
Borrowing base
|
249.2
|
|
|
211.7
|
|
|
200.0
|
|
|||
|
|
|
|
|
|
||||||
Outstanding borrowings
|
43.9
|
|
|
—
|
|
|
29.6
|
|
|||
Letters of credit outstanding—merchandise
|
—
|
|
|
—
|
|
|
—
|
|
|||
Letters of credit outstanding—standby
|
7.9
|
|
|
7.1
|
|
|
7.1
|
|
|||
Utilization of credit facility at end of period
|
51.8
|
|
|
7.1
|
|
|
36.7
|
|
|||
|
|
|
|
|
|
||||||
Availability
(1)
|
$
|
197.4
|
|
|
$
|
204.6
|
|
|
$
|
163.3
|
|
|
|
|
|
|
|
||||||
Interest rate at end of period
|
2.0
|
%
|
|
4.0
|
%
|
|
2.0
|
%
|
|
Year-To-Date 2016
|
|
Fiscal
2015
|
|
Year-To-Date 2015
|
||||||
Average end of day loan balance during the period
|
$
|
39.3
|
|
|
$
|
28.5
|
|
|
$
|
33.7
|
|
Highest end of day loan balance during the period
|
75.1
|
|
|
67.5
|
|
|
67.5
|
|
|||
Average interest rate
|
2.4
|
%
|
|
2.7
|
%
|
|
2.7
|
%
|
(1)
|
The sublimit availability for the letters of credit was
$42.1 million
,
$42.9 million
, and
$42.9 million
at
July 30, 2016
,
January 30, 2016
, and
August 1, 2015
, respectively.
|
7.
|
LEGAL AND REGULATORY MATTERS
|
8.
|
INCOME TAXES
|
9.
|
DERIVATIVE INSTRUMENTS
|
10.
|
INTEREST EXPENSE
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||||||
Interest income
|
$
|
364
|
|
|
$
|
264
|
|
|
$
|
681
|
|
|
$
|
518
|
|
|
|
|
|
|
|
|
|
||||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense – revolver
|
298
|
|
|
272
|
|
|
466
|
|
|
468
|
|
||||
Interest expense – unused line fee
|
117
|
|
|
91
|
|
|
252
|
|
|
196
|
|
||||
Interest expense – credit facilities
|
15
|
|
|
18
|
|
|
29
|
|
|
39
|
|
||||
Amortization of deferred financing fees
|
68
|
|
|
88
|
|
|
136
|
|
|
176
|
|
||||
Other interest and fees
|
42
|
|
|
—
|
|
|
48
|
|
|
20
|
|
||||
Total interest expense
|
540
|
|
|
469
|
|
|
931
|
|
|
899
|
|
||||
Interest expense
|
$
|
(176
|
)
|
|
$
|
(205
|
)
|
|
$
|
(250
|
)
|
|
$
|
(381
|
)
|
11.
|
SEGMENT INFORMATION
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
319,189
|
|
|
$
|
316,212
|
|
|
$
|
694,296
|
|
|
$
|
679,357
|
|
The Children’s Place International
(1)
|
52,227
|
|
|
50,243
|
|
|
96,471
|
|
|
91,963
|
|
||||
Total net sales
|
$
|
371,416
|
|
|
$
|
366,455
|
|
|
$
|
790,767
|
|
|
$
|
771,320
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
103,735
|
|
|
$
|
95,604
|
|
|
$
|
250,226
|
|
|
$
|
232,124
|
|
The Children’s Place International
|
20,136
|
|
|
19,400
|
|
|
38,996
|
|
|
34,989
|
|
||||
Total gross profit
|
$
|
123,871
|
|
|
$
|
115,004
|
|
|
$
|
289,222
|
|
|
$
|
267,113
|
|
Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
32.5
|
%
|
|
30.2
|
%
|
|
36.0
|
%
|
|
34.2
|
%
|
||||
The Children’s Place International
|
38.6
|
%
|
|
38.6
|
%
|
|
40.4
|
%
|
|
38.0
|
%
|
||||
Total gross margin
|
33.4
|
%
|
|
31.4
|
%
|
|
36.6
|
%
|
|
34.6
|
%
|
||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
(2)
|
$
|
(8,617
|
)
|
|
$
|
(23,227
|
)
|
|
$
|
25,537
|
|
|
$
|
(1,233
|
)
|
The Children’s Place International
|
5,677
|
|
|
3,109
|
|
|
11,133
|
|
|
4,319
|
|
||||
Total operating income (loss)
|
$
|
(2,940
|
)
|
|
$
|
(20,118
|
)
|
|
$
|
36,670
|
|
|
$
|
3,086
|
|
Operating income (loss) as a percent of net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
(2.7
|
)%
|
|
(7.3
|
)%
|
|
3.7
|
%
|
|
(0.2
|
)%
|
||||
The Children’s Place International
|
10.9
|
%
|
|
6.2
|
%
|
|
11.5
|
%
|
|
4.7
|
%
|
||||
Total operating income (loss)
|
(0.8
|
)%
|
|
(5.5
|
)%
|
|
4.6
|
%
|
|
0.4
|
%
|
||||
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
14,889
|
|
|
$
|
13,599
|
|
|
$
|
29,532
|
|
|
$
|
26,469
|
|
The Children’s Place International
|
1,002
|
|
|
1,653
|
|
|
2,820
|
|
|
3,177
|
|
||||
Total depreciation and amortization
|
$
|
15,891
|
|
|
$
|
15,252
|
|
|
$
|
32,352
|
|
|
$
|
29,646
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
8,025
|
|
|
$
|
9,512
|
|
|
$
|
14,829
|
|
|
$
|
19,447
|
|
The Children’s Place International
|
927
|
|
|
574
|
|
|
1,207
|
|
|
702
|
|
||||
Total capital expenditures
|
$
|
8,952
|
|
|
$
|
10,086
|
|
|
$
|
16,036
|
|
|
$
|
20,149
|
|
(1)
|
Net sales from The Children's Place International are primarily derived from revenues from Canadian operations.
|
(2)
|
Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $2.6 million and $2.1 million for the Second Quarter 2016 and Year-To-Date 2016, respectively. Includes costs incurred related to a class action wage and hour legal settlement, proxy contest costs, a sales tax audit, asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $10.5 million and $13.7 million for the Second Quarter 2015 and Year-To-Date 2015, respectively.
|
|
July 30, 2016
|
|
January 30, 2016
|
|
August 1, 2015
|
||||||
Total assets:
|
|
|
|
|
|
|
|
|
|||
The Children’s Place U.S.
|
$
|
768,831
|
|
|
$
|
748,975
|
|
|
$
|
815,886
|
|
The Children’s Place International
|
164,706
|
|
|
148,973
|
|
|
146,068
|
|
|||
Total assets
|
$
|
933,537
|
|
|
$
|
897,948
|
|
|
$
|
961,954
|
|
12.
|
SUBSEQUENT EVENTS
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Second Quarter 2016
— The thirteen weeks ended
July 30, 2016
.
|
•
|
Second Quarter 2015
— The thirteen weeks ended
August 1, 2015
.
|
•
|
Year-To-Date 2016
— The twenty-six weeks ended
July 30, 2016
.
|
•
|
Year-To-Date 2015
— The twenty-six weeks ended
August 1, 2015
.
|
•
|
AUC — Average Unit Cost.
|
•
|
AUR — Average Unit Retail.
|
•
|
Comparable Retail Sales — Net sales, in constant currency, from stores that have been open for at least 14 consecutive months and from our e-commerce store, excluding postage and handling fees. Store closures in the current fiscal year will be excluded from Comparable Retail Sales beginning in the fiscal quarter in which the store closes. Stores that temporarily close for non- substantial remodeling will be excluded from Comparable Retail Sales for only the period that they were closed. A store is considered substantially remodeled if it has been relocated or materially changed in size and will be excluded from Comparable Retail Sales for at least 14 months beginning in the period in which the remodel occurred.
|
•
|
Gross Margin — Gross profit expressed as a percentage of net sales.
|
•
|
SG&A — Selling, general and administrative expenses.
|
•
|
FASB — Financial Accounting Standards Board.
|
•
|
SEC — U.S. Securities and Exchange Commission.
|
•
|
U.S. GAAP — Generally Accepted Accounting Principles in the United States.
|
•
|
FASB ASC — FASB Accounting Standards Codification, which
serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants.
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
Average Translation Rates
(1)
|
|
|
|
|
|
|
|
Canadian Dollar
|
0.7717
|
|
0.8018
|
|
0.7627
|
|
0.8018
|
Hong Kong Dollar
|
0.1289
|
|
0.1290
|
|
0.1288
|
|
0.1290
|
China Yuan Renminbi
|
0.1516
|
|
0.1611
|
|
0.1526
|
|
0.1608
|
(1)
|
The average translation rates are the average of the monthly translation rates used during each period to translate the respective income statements. The rates represent the U.S. dollar equivalent of a unit of each foreign currency.
|
•
|
Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
|
•
|
Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales (exclusive of depreciation and amortization)
|
66.6
|
|
|
68.6
|
|
|
63.4
|
|
|
65.4
|
|
Gross profit
|
33.4
|
|
|
31.4
|
|
|
36.6
|
|
|
34.6
|
|
Selling, general and administrative expenses
|
29.1
|
|
|
32.3
|
|
|
27.5
|
|
|
30.2
|
|
Asset impairment charge
|
0.8
|
|
|
0.4
|
|
|
0.4
|
|
|
0.2
|
|
Depreciation and amortization
|
4.3
|
|
|
4.2
|
|
|
4.1
|
|
|
3.8
|
|
Operating income (loss)
|
(0.8
|
)
|
|
(5.5
|
)
|
|
4.6
|
|
|
0.4
|
|
Income (loss) before income taxes
|
(0.8
|
)
|
|
(5.5
|
)
|
|
4.6
|
|
|
0.4
|
|
Provision (benefit) for income taxes
|
(0.3
|
)
|
|
(1.8
|
)
|
|
1.6
|
|
|
0.1
|
|
Net income (loss)
|
(0.5
|
)%
|
|
(3.7
|
)%
|
|
3.0
|
%
|
|
0.2
|
%
|
Number of Company-operated stores, end of period
|
1,064
|
|
|
1,086
|
|
|
1,064
|
|
|
1,086
|
|
|
Thirteen Weeks Ended
|
|
Twenty-six Weeks Ended
|
||||||||||||
|
July 30,
2016 |
|
August 1,
2015 |
|
July 30,
2016 |
|
August 1,
2015 |
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
319,189
|
|
|
$
|
316,212
|
|
|
$
|
694,296
|
|
|
$
|
679,357
|
|
The Children’s Place International
|
52,227
|
|
|
50,243
|
|
|
96,471
|
|
|
91,963
|
|
||||
Total net sales
|
$
|
371,416
|
|
|
$
|
366,455
|
|
|
$
|
790,767
|
|
|
$
|
771,320
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
$
|
103,735
|
|
|
$
|
95,604
|
|
|
$
|
250,226
|
|
|
$
|
232,124
|
|
The Children’s Place International
|
20,136
|
|
|
19,400
|
|
|
38,996
|
|
|
34,989
|
|
||||
Total gross profit
|
$
|
123,871
|
|
|
$
|
115,004
|
|
|
$
|
289,222
|
|
|
$
|
267,113
|
|
Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
|
||||
The Children’s Place U.S.
|
32.5
|
%
|
|
30.2
|
%
|
|
36.0
|
%
|
|
34.2
|
%
|
||||
The Children’s Place International
|
38.6
|
%
|
|
38.6
|
%
|
|
40.4
|
%
|
|
38.0
|
%
|
||||
Total gross margin
|
33.4
|
%
|
|
31.4
|
%
|
|
36.6
|
%
|
|
34.6
|
%
|
(i)
|
the prime rate plus a margin of
0.50%
to
0.75%
based on the amount of our average excess availability under the facility; or
|
(ii)
|
the London InterBank Offered Rate, or “LIBOR”, for an interest period of
one, two, three or six
months, as selected by us, plus a margin of
1.25%
to
1.50%
based on the amount of our average excess availability under the facility.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
Item 4.
|
CONTROLS AND PROCEDURES.
|
Item 1.
|
LEGAL PROCEEDINGS.
|
Item 1A.
|
RISK FACTORS.
|
Item 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
Period
|
|
Total Number of
Shares Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
|
Approximate Dollar
Value (in thousands) of
Shares that May Yet
Be Purchased Under
the Plans or Programs
|
||||||
5/1/16-5/28/16
(1)
|
|
158,848
|
|
|
$
|
72.34
|
|
|
111,211
|
|
|
$
|
219,133
|
|
5/29/16-7/2/16
(2)
|
|
172,484
|
|
|
74.68
|
|
|
172,000
|
|
|
206,286
|
|
||
7/3/16-7/30/16
(3)
|
|
171,590
|
|
|
82.97
|
|
|
171,500
|
|
|
192,007
|
|
||
Total
|
|
502,922
|
|
|
$
|
76.77
|
|
|
454,711
|
|
|
$
|
192,007
|
|
(1)
|
Includes 812 shares acquired as treasury stock as directed by participants in the Company's deferred compensation plan and 46,825 shares withheld to cover taxes in conjunction with the vesting of stock awards.
|
(2)
|
Includes 484 shares withheld to cover taxes in conjunction with the vesting of stock awards.
|
(3)
|
Includes 90 shares withheld to cover taxes in conjunction with the vesting of stock awards.
|
Item 6.
|
Exhibits.
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of The Children's Place, Inc. dated May 31, 2016 filed as Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on June 7, 2016 is incorporated by reference herein.
|
|
|
|
3.2
|
|
Sixth Amended and Restated Bylaws of The Children's Place, Inc. filed as Exhibit 3.2 to the registrant's Current Report on Form 8-K filed on June 7, 2016 is incorporated by reference herein.
|
|
|
|
10.1
|
|
The Children's Place, Inc. Third Amended and Restated 2011 Equity Plan dated May 25, 2016 filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on June 7, 2016 is incorporated by reference herein.
|
|
|
|
31.1
(+)
|
|
Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
|
|
31.2
(+)
|
|
Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
|
|
|
|
32
(+)
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
*
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
|
|
THE CHILDREN’S PLACE, INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
August 31, 2016
|
By:
|
/S/ JANE T. ELFERS
|
|
|
|
JANE T. ELFERS
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
Date:
|
August 31, 2016
|
By:
|
/S/ ANURUP PRUTHI
|
|
|
|
ANURUP PRUTHI
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
1 Year Childrens Place Chart |
1 Month Childrens Place Chart |
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