Childrens Place (NASDAQ:PLCE) widened its second-quarter loss on softer demand at its more established stores, though it still raised its fiscal view on renewed confidence in merchandise.
Despite the weak second-quarter performance, the company raised slightly its fiscal earnings guidance to a range of $3.13 to $3.25 a share, compared with its earlier view between $3.10 to $3.25 a share. Wall Street has predicted a 2011 profit of $3.24.
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For the second quarter, the Secaucus, N.J.-based maker of childrens apparel posted a net loss of $9.7 million, or 38 cents a share, worse than a year-ago loss of $8.2 billion, or 30 cents, in the same quarter last year. Analysts polled by Thomson Reuters had expected a slightly bleaker loss of 39 cents.
Revenue for the three months ended July 30 was $343.5 million, down slightly from $345.3 million a year ago, missing the Streets view of $356.6 million. The decline was due in part to a 5.6% decline in comparable sales.
Our strategy to significantly reduce the amount of unproductive inventory in our stores resulted in lower mark-downs and solid margin expansion during the quarter, despite higher product costs, Childrens Place CEO Jane Elfers said in a statement.
Expenses were higher during the period as the company continued to open new stores.
While the competitive environment constrained top-line sales, Elfers said the company reached the high-end of its guidance range through improved merchandise and tightly controlled inventory.