Children's Place sees weak Q1 as sales dip

today Mar 9, 2011
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Wed Mar 9, 2011 - (Reuters) - Children's Place Retail Stores Inc (PLCE.O) posted a bigger-than-expected quarterly profit, but the kids' clothes retailer forecast a weak year ahead on weakening sales and rising costs.

Children's Place
Children's Place retail store

Shares of the company fell as much as 2 percent on Wednesday before the bell.

Like rival clothes retailers, including Carter's Inc (CRI.N) and Gymboree Corp, Children's Place has to deal with increasing pressure from rising prices of cotton and other inputs, which could hurt margins as the year progresses.

Earlier this month, Carter's forecast first-quarter earnings below market estimates and said rising raw material costs would eat into margins.

Children's Place, which announced in February that its finance chief was leaving the company, expects to earn between $1.00-$1.05 a share in the first quarter.

Analysts, on average, were expecting the company to earn $1.12 a share, according to I/B/E/S.

The forecast is based on negative low-single digit comparable retail sales.

For the fourth quarter too, sales fell 2 percent to $453.2 million while same-store sales, including online sales, declined 5.9 percent.

On an adjusted basis, earnings stood at $1.22 per share, beating analysts' estimates of $1.01 a share.

Shares of the Secaucus, New Jersey-based company fell to about 2 percent in pre-market trade on Wednesday, before clawing back to $44, slightly above Tuesday's close of $43.88 on Nasdaq.

(Reporting by Nivedita Bhattacharjee; Editing by Gopakumar Warrier and Joyjeet Das)

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