EmailChildren's Place (PLCE $47.35 -5.72) lowered fourth quarter EPS guidance to $0.85-0.90, excluding non-recurring items from $1.19-1.24 versus the $1.24 Capital IQ Consensus Estimate. The updated guidance assumes that comparable retail sales will be approximately flat for the quarter (vs. flat to slightly positive previously), and includes an ~$0.16 per share benefit resulting from the company becoming permanently reinvested in the current and future earnings of its Asian subsidiaries during Q4 which will result in a lower tax rate going forward.
"Quarterly sales are projected to be in line with our previous guidance. However, due to the unseasonably warm weather throughout the quarter, we took aggressive markdowns to clear winter apparel and accessories. These discounts, coupled with record high apparel costs in the fourth quarter, significantly impacted our margin...looking forward to 2012, we expect the progress being made on our key initiatives -- most notably better fashion, introduction of made-for-outlet merchandise, a stronger merchandise assortment for Canada, and continued growth in e-commerce and value center stores, along with a tailwind from lower product costs in the second half -- to drive sales growth and margin expansion."
