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Shares of TheChildren's Place, Inc. (NASDAQ: PLCE) were up 18.5% as of 1:53 p.m. EST Wednesday after the children's apparel specialist announced strong fourth-quarter results and expanded its capital returns program.
Quarterly revenue climbed 4.5% year over year, to $520.8 million, driven by 6.5% growth in comparable-retail sales. The Children's Place closed 22 locations during the quarter as part of its fleet optimization initiative, ending fiscal 2016 with 1,039 stores. That translated to 43.6% growth in adjusted net income, to $34.6 million, and 58% growth in adjusted net income per share, to $1.88. Analysts, on average, were modeling slightly higher revenue of $522.2 million, but with significantly lower adjusted net income of $1.59 per share.
Image source: The Children's Place.
The Children's Place also approved a new $250 million share repurchase program, and doubled its quarterly dividend to $0.40 per share. The Children's Place CEO Jane Elfers stated both moves "reflect our confidence in our ability to execute on our strategic initiative and our continuing commitment to return excess capital to shareholders."
Elfers also noted that comparable-retail sales have been positive so far in the current quarter -- an encouraging development considering delayed tax refunds earlier in the quarter.As such, The Children's Place expects net income per diluted share to be between $1.53 and $1.63 for the current quarter -- well above analysts' consensus estimates for $1.52 per share -- assuming a low-single-digit increase in comps and including an $0.08-per-share benefit from new accounting rules regarding the income tax impact of share-based compensation.
Finally, The Children's Place expects full-year fiscal 2017 earnings per diluted share to be $6.50 to $6.65, up from $5.43 last fiscal year, including a $0.45-per-share benefit from accounting changes, and above the $5.85 investors were expecting.
All things considered, this was a strong quarter from The Children's Place as it continues to optimize its store base, and it's no surprise to see investors aggressively bidding up shares today.
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