Unassociated Document

FOR IMMEDIATE RELEASE

THE CHILDREN’S PLACE REPORTS SECOND QUARTER 2010 FINANCIAL RESULTS

Board of Directors Authorizes $100 Million Share Repurchase Program

Management Raises Fiscal 2010 Earnings Guidance

Secaucus, New Jersey – August 19, 2010 – The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE), the largest pure-play children’s specialty apparel retailer in North America, today announced second quarter net sales of $345.3 million for the thirteen weeks ended July 31, 2010, a 9.4% increase compared to $315.7 million in the second quarter of 2009.

Comparable retail sales, which include online sales, increased 4.7% in the second quarter of fiscal 2010 compared to a decline of 8.5% the previous year. During the second quarter of 2010, comparable store sales increased 3.3% in the U.S. and 0.8% in Canada, and comparable online sales increased 30.4%.

The loss from continuing operations after tax was $8.3 million, or $0.30 per share, in the second quarter of 2010, compared to a loss of $7.2 million in the second quarter of 2009, or $0.24 per share, including several transactions affecting comparability between the quarters. Excluding those items that affect comparability, the loss from continuing operations in the second quarter of 2010 narrowed 33% from the second quarter of 2009 when the Company reported an adjusted loss from continuing operations of $12.4 million, or $0.42 per share. Adjusted loss from continuing operations excluding transactions that affect comparability is a non-GAAP measure. The Company believes the excluded items are not indicative of the performance of its core business and that by providing this supplemental disclosure to investors it will facilitate comparisons of its past and present performance. A reconciliation of loss from continuing operations as reported is included in Table 3 of this press release.

“We posted solid results for the second quarter, narrowing our seasonal operating loss through a combination of top line growth and disciplined expense management. We also continued to make substantial progress on our longer-term growth initiatives and believe we are well positioned to gain market share,” commented Jane Elfers, President and Chief Executive Officer of The Children’s Place. “While the economic environment remains uncertain, we are focused on driving improved sales and profitability in our business for the long term.”

Elfers continued, “Our Board of Directors has authorized a $100 million share repurchase program. We believe the timing is right and this strategic decision to utilize the significant amount of cash on our balance sheet is aligned with the Company’s commitment to increasing returns on capital and creating shareholder value.”

During the second quarter of 2010, the Company opened 18 stores and closed three.

PLCE – Second Quarter 2010 Financial Results

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Fiscal Year-to-Date

Net sales from continuing operations were $767.4 million fiscal year-to-date 2010, a 6.9% increase compared to $717.6 million for the same period last year. Comparable retail sales increased 1.7% fiscal year-to-date 2010 compared to a 3.3% decline last year.

Income from continuing operations after tax was $19.7 million, or $0.70 per diluted share, fiscal year-to-date 2010, compared to $16.5 million, or $0.56 per diluted share, last year, including several transactions that affect comparability. Excluding those items that affect comparability, income from continuing operations after tax in the first half of 2010 increased 111% compared to the first half of 2009 when the Company reported adjusted income from continuing operations of $9.3 million, or $0.31 per diluted share. As previously noted, this is a non-GAAP measure which the Company is providing as a supplemental disclosure. A reconciliation of income from continuing operations as reported is included in Table 3 of this press release.

Net income, including the impact of discontinued operations, was $19.7 million, or $0.70 per diluted share, fiscal year-to-date 2010, compared to $16.5 million, or $0.55 per diluted share, last year.

Fiscal year-to-date, the Company has opened 34 stores and closed four.

Share Repurchase Program

The Company announced today that the Board of Directors authorized a share repurchase program in the amount of $100.0 million. Under the program, the Company may repurchase shares in the open market over the next twelve months at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under the program will depend on a variety of factors including price, corporate and regulatory requirements, and other market conditions, and the Company may suspend or discontinue the program at any time.

Outlook

The Company updated its guidance for fiscal 2010 and now projects earnings per diluted share from continuing operations will be in the range of $3.08 to $3.18 for fiscal 2010, reflecting its first half results, from its previous guidance of $3.05 to $3.15. The Company provided initial guidance for earnings per diluted share from continuing operations for the third quarter of 2010 to be in the range of $1.38 to $1.43. The earnings guidance assumes flat to positive low-single digit comparable retail sales and assumes that currency exchange rates will remain where they are today. This guidance does not include the impact of a potential share repurchase.

Conference Call Information

The Children’s Place will host a conference call to discuss its second quarter 2010 results today at 8:00 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available approximately one hour after the conclusion of the call.

About The Children’s Place Retail Stores, Inc.

The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America. The Company designs, contracts to manufacture and sells fashionable, high-quality merchandise at value prices under the proprietary “The Children's Place” brand name. As of July 31, 2010, the Company owned and operated 977 stores and an online store at www.childrensplace.com.

PLCE – Second Quarter 2010 Financial Results

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Forward-Looking Statements

This press release (and above referenced call) may contain certain forward-looking statements regarding future circumstances, including statements relating to the Company’s positioning, and forecasts regarding earnings per diluted share for the third quarter and fiscal 2010. These forward-looking statements are based upon the Company's current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties are described in the Company's filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its annual report on Form 10-K for the fiscal year ended January 30, 2010. Included among the risks and uncertainties that could cause actual results, events and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, and the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by a downturn in the economy. Readers (or listeners on the call) are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.

CONTACT:

The Children’s Place Retail Stores, Inc.

Susan Riley, EVP, Finance & Administration, (201) 558-2400

Jane Singer, VP, Investor Relations, (201) 453-6955

(Tables Follow)

Table 1

THE CHILDREN’S PLACE RETAIL STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Second Quarter Ended						Year-to-Date Ended
	July 31,			August 1,			July 31,			August 1,
	2010			2009			2010			2009
Net sales	$	345,301		$	315,676		$	767,434		$	717,577
Cost of sales		231,727			210,377			474,156			445,751
Gross profit		113,574			105,299			293,278			271,826
Selling, general and administrative expenses		107,281			106,093			220,736			217,986
Asset impairment charge		1,222			315			2,152			1,414
Depreciation and amortization		18,199			17,564			35,824			35,088
Income (loss) from continuing operations before interest and taxes		(13,128	)		(18,673	)		34,566			17,338
Interest (expense), net		(381	)		(1,462	)		(837	)		(4,730	)
Income (loss) from continuing operations before income taxes		(13,509	)		(20,135	)		33,729			12,608
Provision (benefit) for income taxes		(5,241	)		(12,906	)		13,990			(3,904	)
Income (loss) from continuing operations, net of income taxes		(8,268	)		(7,229	)		19,739			16,512
Income (loss) from discontinued operations, net of income taxes		35			178			(70	)		(51	)
Net income (loss)	$	(8,233	)	$	(7,051	)	$	19,669		$	16,461


Basic earnings (loss) per share amounts
Income (loss) from continuing operations	$	(0.30	)	$	(0.24	)	$	0.71		$	0.56
Income (loss) from discontinued operations		0.00			0.01			(0.00	)		(0.00	)
Net income (loss)	$	(0.30	)	$	(0.24	)	$	0.71		$	0.56
Basic weighted average common shares outstanding		27,755			29,552			27,669			29,514

Diluted earnings (loss) per share amounts
Income (loss) from continuing operations	$	(0.30	)	$	(0.24	)	$	0.70		$	0.56
Income (loss) from discontinued operations		0.00			0.01			(0.00	)		(0.00	)
Net income (loss)	$	(0.30	)	$	(0.24	)	$	0.70		$	0.55
Diluted weighted average common shares outstanding		27,755			29,552			28,027			29,746

Note: Table may not add due to rounding

Table 2

THE CHILDREN’S PLACE RETAIL STORES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	July 31,		January 30,		August 1,
	2010			2010*	2009
Assets:

Cash and investments	$	198,228	$	170,492	$	152,198
Accounts receivable		18,905		16,910		21,792
Inventories		214,301		206,227		262,986
Other current assets		82,160		63,253		100,143
Total current assets		513,594		456,882		537,119

Property and equipment, net		318,255		312,801		310,795
Other assets, net		60,676		84,377		74,960
Total assets	$	892,525	$	854,060	$	922,874

Liabilities and Stockholder Equity:

Short term portion of term loan	$	-	$	-	$	38,000
Accounts payable		68,564		55,547		89,249
Accrued expenses and other current liabilities		81,878		89,969		93,088
Total current liabilities		150,442		145,516		220,337

Other liabilities		116,931		119,574		119,304
Total liabilities		267,373		265,090		339,641

Stockholders' equity		625,152		588,970		583,233

Total liabilities and stockholders' equity	$	892,525	$	854,060	$	922,874

* Derived from the audited financial statements included in the Company's 10K filing for the year ended January 30, 2010.

Table 3

THE CHILDREN’S PLACE RETAIL STORES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP

(In thousands, except per share amounts)

(Unaudited)

	Second Quarter Ended						Year-to-Date Ended
	July 31,			August 1,			July 31,		August 1,
	2010			2009			2010		2009
Income (loss) from continuing operations, net of income taxes	$	(8,268	)	$	(7,229	)	$	19,739	$	16,512

Transactions affecting comparability:
Gains:
Favorable settlement of IRS employment tax audit related to stock options		-			(4,563	)		-		(4,563	)

Expenses:
Proxy contest fees		-			2,200			-		2,200
Prepayment of term loan expenses/deferred financing fees		-			1,530			-		2,390
Company restructuring fees		-			250			-		2,805
Impairment charge		-			-			-		852

Aggregate impact of transactions affecting comparability		-			(583	)		-		3,684
Income tax effect		-			233			-		(1,474	)
Excess foreign tax credits from repatriation of cash		-			(4,834	)		-		(4,834	)
Tax benefit from resolution of IRS income tax audit		-			-			-		(4,540	)
Adjusted (gain) from transactions affecting comparability		-			(5,184	)		-		(7,164	)

Adjusted income (loss) from continuing operations, net of income taxes	$	(8,268	)	$	(12,413	)	$	19,739	$	9,348

GAAP income (loss) from continuing operations per diluted share	$	(0.30	)	$	(0.24	)	$	0.70	$	0.56

Adjusted income (loss) from continuing operations per diluted share	$	(0.30	)	$	(0.42	)	$	0.70	$	0.31

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