SEGMENT INFORMATION

6 Months Ended

Jul. 30, 2011

SEGMENT INFORMATION

SEGMENT INFORMATION

11. SEGMENT INFORMATION

In accordance with the “Segment Reporting” topic of the FASB ASC, the Company reports segment data based on management responsibility: The Children’s Place U.S. and The Children’s Place Canada.  Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico based stores. Each segment includes an e-commerce business located at www.childrensplace.com.  The Company measures its segment profitability based on operating income, defined as income from continuing operations before interest and taxes.  Net sales and direct costs are recorded by each segment.  Certain inventory procurement functions such as production and design as well as corporate overhead, including executive management, finance, real estate, human resources, legal, and information technology services are managed by The Children’s Place U.S. segment.  Expenses related to these functions, including depreciation and amortization, are allocated to The Children’s Place Canada segment based primarily on net sales.  The assets related to these functions are not allocated.  The Company periodically reviews these allocations and adjusts them based upon changes in business circumstances.  Net sales from external customers are derived from merchandise sales and the Company has no major customers that account for more than 10% of its net sales.  As of July 30, 2011, The Children’s Place U.S. operated 944 stores and The Children’s Place Canada operated 116 stores. As of July 31, 2010, The Children’s Place U.S. operated 880 stores and The Children’s Place Canada operated 97 stores.

The following tables provide segment level financial information for the Second Quarter 2011, the Second Quarter 2010, Year-To-Date 2011 and Year-To-Date 2010 (dollars in thousands):

	Thirteen Weeks Ended						Twenty-six Weeks Ended
	July 30,			July 31,			July 30,			July 31,
	2011			2010			2011			2010
Net sales:
The Children’s Place U.S.	$	294,417		$	297,329		$	674,925		$	670,742
The Children’s Place Canada	49,091			47,972			99,389			96,692
Total net sales	$	343,508		$	345,301		$	774,314		$	767,434
Gross profit:
The Children’s Place U.S.	$	93,326		$	92,824		$	252,745		$	249,184
The Children’s Place Canada	22,239			20,750			46,467			44,094
Total gross profit	$	115,565		$	113,574		$	299,212		$	293,278
Gross Margin:
The Children’s Place U.S.	31.7		%	31.2		%	37.4		%	37.2		%
The Children’s Place Canada	45.3		%	43.3		%	46.8		%	45.6		%
Total Gross Margin	33.6		%	32.9		%	38.6		%	38.2		%
Operating income (loss):
The Children’s Place U.S.	$	(20,269	)	$	(17,456	)	$	20,986		$	21,867
The Children’s Place Canada	4,491			4,328			12,012			12,699
Total operating income (loss)	$	(15,778	)	$	(13,128	)	$	32,998		$	34,566
Operating income (loss) as a percent of net sales:
The Children’s Place U.S.	-6.9		%	-5.9		%	3.1		%	3.3		%
The Children’s Place Canada	9.1		%	9.0		%	12.1		%	13.1		%
Total operating income (loss)	-4.6		%	-3.8		%	4.3		%	4.5		%
Depreciation and amortization:
The Children’s Place U.S.	$	16,259		$	16,277		$	31,963		$	32,063
The Children’s Place Canada	2,219			1,922			4,266			3,761
Total depreciation and amortization	$	18,478		$	18,199		$	36,229		$	35,824
Capital expenditures:
The Children’s Place U.S.	$	18,324		$	22,171		$	39,695		$	44,975
The Children’s Place Canada	3,866			873			7,030			1,983
Total capital expenditures	$	22,190		$	23,044		$	46,725		$	46,958

Total assets by segment are as follows (in thousands):

	July 30,		January 29,		July 31,
	2011		2011		2010
Total assets:
The Children’s Place U.S.	$	723,073	$	720,951	$	779,743
The Children’s Place Canada	150,178		133,380		112,782
Total assets	$	873,251	$	854,331	$	892,525