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North American specialty retailer The Children’s Place Inc has reported a net sales growth of 31.2 per cent to reach $558.2 million in the third quarter (Q3) of fiscal 2021 from $425.6 million in Q3 FY2020. This growth was primarily driven by strong customer response to company’s product assortment and the strategic reset of its pricing and promotions.
The gross profit of the company increased by $98.7 million to $244.8 million in the reporting quarter compared to $146.1 million in the previous year’s same quarter. Likewise, the adjusted gross profit increased $95.2 million to $245 million in the quarter, compared to $149.8 million in the comparable period last year and leveraged 868 basis points to 43.9 per cent of net sales, compared to 35.2 per cent of net sales last year. This growth is a result of significantly higher merchandise margins, resulting from double digit AUR increases, in both its digital and stores channels, due to the strategic reset of pricing and promotions, the leverage of fixed expenses resulting from the increase in net sales and lower occupancy expenses due to favorable lease negotiations and permanent store closures.
The operating income increased $90.5 million to $113.8 million in the three months ended October 30, 2021, compared to an operating income of $23.3 million in corresponding quarter of FY2020. The adjusted operating income also increased $85.1 million to $116.5 million in the quarter, compared to an adjusted operating income of $31.4 million in the comparable period last year and leveraged 1,349 basis points to 20.9 per cent of net sales compared to 7.4 per cent of net sales last year.
North American specialty retailer The Children’s Place Inc has reported a net sales growth of 31.2 per cent to reach $558.2 million in the third quarter (Q3) of fiscal 2021 from $425.6 million in Q3 FY2020. This growth was primarily driven by strong customer response to company’s product assortment and the strategic reset of its pricing and promotions.
The net income also increased $65.6 million to $78.9 million or $5.30 per diluted share, in the third quarter, compared to a net income of $13.3 million or $0.91 per diluted share in the comparable period last year. Likewise, the adjusted net income increased $61.1 million to $80.8 million or $5.43 per diluted share, compared to an adjusted net income of $19.7 million or $1.35 per diluted share, in the comparable period last year.
“We delivered another outstanding quarter with sales, gross margin, operating margin and EPS all at record levels. To help put the magnitude of our turnaround into perspective, our Q3 2021 adjusted operating income of $117 million exceeded our Full Year 2019 adjusted operating income of $111 million. The significant structural changes we made to our business in 2020, combined with the accelerated digital investments we made pre-pandemic, continue to propel our results.” Jane Elfers, president and chief executive officer of the company, said in a press release.
“While we are only a few weeks in, Q4 is off to a very strong start. We continue to operate at a high level, while navigating the ever-changing COVID landscape. We remain firmly on offense and we look forward to continuing to deliver accelerated operating margin expansion for 2021 and beyond,” Elfers concluded.
During the three months ended October 30, 2021, the company repurchased 372 thousand shares for approximately $31.7 million, inclusive of shares repurchased and surrendered to cover tax withholdings associated with the vesting of equity awards held by management.
As of October 30, 2021, the company had approximately $67.1 million of cash and cash equivalents, $441.8 million of inventories and $174.4 million outstanding on its revolving credit facility. Additionally, the company generated approximately $70.7 million in operating cash flow in the three months ended October 30, 2021.
Fibre2Fashion News Desk (DD)
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