8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuantto Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 26, 2013

THE CHILDREN’S PLACE RETAIL STORES, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware

 (State or Other Jurisdiction of Incorporation)

0-23071	31-1241495
(Commission File Number)	(IRS Employer Identification No.)

500 Plaza Drive, Secaucus, New Jersey	07094
(Address of Principal Executive Offices)	(Zip Code)

(201) 558-2400

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On November 26, 2013, the Company issued a press release containing the Company’s financial results for the third quarter of the fiscal year ending February 1, 2014 (“Fiscal 2013”), and providing an updated estimated range of adjusted net income per diluted share for Fiscal 2013 and a preliminary range of adjusted net income per diluted share for the fourth quarter of Fiscal 2013. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report is being furnished pursuant to Item 2.02 of Form 8-K insofar as it discloses historical information regarding the Company’s results of operations and financial condition as of and for the third quarter of Fiscal 2013. In accordance with General Instructions B.2 of Form 8-K, such information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release, dated November 26, 2013, issued by the Company (Exhibit 99.1 is furnished as part of this Current Report on Form 8-K).

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Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s positioning, and forecasts regarding store openings and net income per diluted share. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. 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 and performance 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 February 2, 2013. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 continued weakness in the economy or by other factors such as increases in the cost of gasoline and food, and the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers 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.

* * *

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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	November 26, 2013
		THE CHILDREN’S PLACE RETAIL STORES, INC.
		By:	/s/ Jane Elfers
		Name:	Jane Elfers
		Title:	President and Chief Executive Officer

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

THE CHILDREN’S PLACE REPORTS THIRD QUARTER 2013 RESULTS

GAAP Net Income per Diluted Share +19% Adjusted Net Income per Diluted Share +11%

Management Updates Fiscal 2013 Earnings Guidance

Secaucus, New Jersey – November 26, 2013 – The Children’s Place Retail Stores, Inc. (Nasdaq: PLCE), the largest pure-play children’s specialty apparel retailer in North America, today announced financial results for the thirteen weeks ended November 2, 2013.

“We achieved the high-end of our earnings guidance as a result of strong execution of our important back-to-school period, and the continuation of disciplined expense management across the organization,” commented Jane Elfers, President and Chief Executive Officer. “We are well-positioned as we enter the fourth quarter and look forward to making substantive progress on our key strategic initiatives.”

Third Quarter 2013 Results

Net sales were $492.7 million, compared to $500.9 million in the third quarter of 2012. Comparable retail sales declined 0.7%.

Net income was $41.7 million, or $1.84 per diluted share, in the third quarter of 2013, compared to $37.3 million, or $1.54 per share, the previous year. Adjusted net income was $42.7 million, or $1.89 per diluted share, compared to $41.3 million, or $1.70 per diluted share, the previous year.

Gross profit was $201.8 million, compared to $209.5 million in the third quarter of 2012. Adjusted gross profit in the third quarter of 2013 was $202.9 million, and deleveraged 60 basis points to 41.2% of sales.

As a result of the Company’s strong expense management, selling, general and administrative expenses were $123.5 million, compared to $131.9 million in the third quarter of 2012. Adjusted SG&A in the third quarter of 2013 was $123.2 million, and leveraged 130 basis points to 25.0% of sales.

Operating income was $61.6 million, compared to $53.5 million in the third quarter of 2012. Adjusted operating income in the third quarter of 2013 was $63.2 million, and leveraged 80 basis points to 12.8% of sales.

Adjusted net income, adjusted gross profit, adjusted SG&A, and adjusted operating income are non-GAAP measures. The Company believes the excluded transactions 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 to GAAP financial information is provided at the end of this release.

The Company opened 10 stores and closed 3, ending the third quarter with 1,123 stores.

Fiscal 2013 Year-to-Date

Net sales were $1,298.3 million, compared to $1,300.3 million for the same time period last year. Comparable retail sales declined 2.3%.

Net income fiscal year-to-date 2013 was $37.4 million, or $1.63 per diluted share, compared to $44.1 million, or $1.80 per diluted share, the previous year. Adjusted net income was $52.6 million, or $2.30 per diluted share, compared to $54.5 million, or $2.23 per diluted share the previous year.

Gross profit was $491.2 million, compared to $502.9 million in the third quarter of 2012. Adjusted gross profit fiscal year-to-date 2013 was $492.3 million, and deleveraged 80 basis points to 37.9% of sales.

Selling, general and administrative expenses were $366.9 million, compared to $374.8 million in the third quarter of 2012. Adjusted SG&A fiscal year-to-date 2013 was $364.4 million, and leveraged 40 basis points to 28.1% of sales.

Operating income was $54.4 million, compared to operating income of $63.8 million for the same time period last year. Adjusted operating income was $79.1 million, and deleveraged 10 basis points to 6.1% of sales.

Share Repurchase Program

During the third quarter of 2013, the Company repurchased 129 thousand shares for approximately $6.9 million. Year-to-date, the Company repurchased 1.1 million shares for approximately $54.7 million. At the end of the quarter, $25.7 million of the $100 million share repurchase program authorized in November 2012 remained available for future share repurchases.

Outlook

The Company updated its guidance for fiscal 2013 and now projects that adjusted net income per diluted share will be between $3.20 and $3.28, assuming negative low-single digit comparable retail sales. This compares to its previous guidance of $3.15 to $3.28, assuming negative low-single digit comparable retail sales.

The Company provided initial guidance for the fourth quarter of fiscal 2013, and is forecasting adjusted net income per diluted share for the 13-week period ending February 1, 2014 will be between $0.90 and $0.98, assuming negative low-single digit comparable retail sales. This compares to adjusted net income per diluted share of $1.02 for the 14-week period ending February 2, 2013.

This earnings guidance assumes that currency exchange rates will remain where they are today anddoes not include the impact of further potential share repurchases.

Conference Call Information

The Children’s Place will host a conference call to discuss its third quarter fiscal 2013 results today at 9:30 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available on the Company’s website 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, primarily under the proprietary “The Children’s Place,” “Place” and “Baby Place” brand names. As of November 2, 2013, the Company operated 1,123 stores and an online store at www.childrensplace.com.

Forward Looking Statements

This press release (and the above referenced call) may contain certain forward-looking statements regarding future circumstances, including statements relating to the Company’s positioning, and forecasts regarding adjusted net income per diluted share. 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 and performance 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 February 2, 2013. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, 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 the continued weakness in the economy or by other factors such as increases in the cost of gasoline and food, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers 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: Jane Singer, Vice President, Investor Relations, (201) 453-6955

(Tables Follow)

THE CHILDREN’S PLACE RETAIL STORES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Third Quarter Ended					Year-to-Date Ended
	November 2,		October 27,			November 2,			October 27,
	2013		2012			2013			2012
Net sales	$	492,680	$	500,928		$	1,298,292		$	1,300,262
Cost of sales		290,919		291,395			807,081			797,379
Gross profit		201,761		209,533			491,211			502,883
Selling, general and administrative expenses		123,521		131,875			366,937			374,833
Asset impairment charges		-		539			21,766			2,069
Other costs (income)		200		570			(762	)		4,466
Depreciation and amortization		16,473		23,023			48,890			57,723
Operating income		61,567		53,526			54,380			63,792
Interest income (expense), net		82		(23	)		142			(104	)
Income before taxes		61,649		53,503			54,522			63,688
Provision for income taxes		19,910		16,198			17,147			19,577
Net income	$	41,739	$	37,305		$	37,375		$	44,111
Earnings per common share
Basic	$	1.87	$	1.55		$	1.65		$	1.82
Diluted	$	1.84	$	1.54		$	1.63		$	1.80
Weighted average common shares outstanding
Basic		22,337		24,086			22,632			24,290
Diluted		22,628		24,293			22,896			24,453

THE CHILDREN’S PLACE RETAIL STORES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	November 2,		February 2,		October 27,
		2013		2013*		2012
Assets:
Cash and cash equivalents	$	141,746	$	194,128	$	203,101
Short-term investments		52,500		15,000		-
Accounts receivable		26,267		18,490		25,948
Inventories		337,172		266,976		296,398
Other current assets		48,498		50,641		43,929
Total current assets		606,183		545,235		569,376
Property and equipment, net		318,021		330,101		335,953
Other assets, net		50,513		48,074		53,682
Total assets	$	974,717	$	923,410	$	959,011
Liabilities and Stockholders' Equity:
Accounts payable	$	117,554	$	87,461	$	99,342
Accrued expenses and other current liabilities		134,334		104,045		113,175
Total current liabilities		251,888		191,506		212,517
Other liabilities		107,294		110,955		112,164
Total liabilities		359,182		302,461		324,681
Stockholders' equity		615,535		620,949		634,330
Total liabilities and stockholders' equity	$	974,717	$	923,410	$	959,011

*  Derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K  for the fiscal year ended February 2, 2013.

THE CHILDREN’S PLACE RETAIL STORES, INC.

CONDENSED CONSOLIDATED CASH FLOWS

(In thousands)

(Unaudited)

	Thirty-nine Weeks Ended
	November 2,			October 27,
	2013			2012
Net income	$	37,375		$	44,111
Non-cash adjustments		71,655			63,250
Working capital		(9,853	)		36,113
Net cash provided by operating activities		99,177			143,474
Net cash used in investing activities		(94,653	)		(71,416	)
Net cash used in financing activities		(53,358	)		(45,455	)
Effect of exchange rate changes on cash		(3,548	)		(157	)
Net (decrease) increase in cash and cash equivalents		(52,382	)		26,446
Cash and cash equivalents, beginning of period		194,128			176,655
Cash and cash equivalents, end of period	$	141,746		$	203,101

THE CHILDREN’S PLACE RETAIL STORES, INC.

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP

(In thousands, except per share amounts)

(Unaudited)

	Third Quarter Ended						Year-to-Date Ended
	November 2,			October 27,			November 2,			October 27,
	2013			2012			2013			2012
Net income	$	41,739		$	37,305		$	37,375		$	44,111
Non-GAAP adjustments:
Expenses:
Store disposition		1,221			-			13,874			1,250
Asia reorganization		170			-			1,237			-
DC exit costs		200			6,256			(762	)		10,152
IT impairment and costs		-			-			10,323			-
Restructuring severance costs		-			-			-			1,971
Obsolete supply and fixture costs		-			-			-			883
Legal settlement		-			-			-			1,087
Accelerated depreciation for Canadian store remodels		-			272			-			1,630
Aggregate impact of non-GAAP adjustments		1,591			6,528			24,672			16,973
Income tax effect (1)		(596	)		(2,574	)		(9,448	)		(6,568	)
Net impact of non-GAAP adjustments		995			3,954			15,224			10,405
Adjusted net income	$	42,734		$	41,259		$	52,599		$	54,516
GAAP net income per common share	$	1.84		$	1.54		$	1.63		$	1.80
Adjusted net income per common share	$	1.89		$	1.70		$	2.30		$	2.23

(1) The tax effects of the non-GAAP items are calculated based on the statutory rate of the jurisdiction in which the discrete item resides.

	Third Quarter Ended				Year-to-Date Ended
	November 2,		October 27,		November 2,			October 27,
	2013		2012		2013			2012
Operating income	$	61,567	$	53,526	$	54,380		$	63,792
Non-GAAP adjustments:
Expenses:
Store disposition		1,221		-		13,874			1,250
Asia reorganization		170		-		1,237			-
DC exit costs		200		6,256		(762	)		10,152
IT impairment and costs		-		-		10,323			-
Restructuring severance costs		-		-		-			1,971
Obsolete supply and fixture costs		-		-		-			883
Legal settlement		-		-		-			1,087
Accelerated depreciation for Canadian store remodels		-		272		-			1,630
Aggregate impact of non-GAAP adjustments		1,591		6,528		24,672			16,973
Adjusted operating income	$	63,158	$	60,054	$	79,052		$	80,765

	Third Quarter Ended				Year-to-Date Ended
	November 2,		October 27,		November 2,		October 27,
	2013		2012		2013		2012
Gross profit	$	201,761	$	209,533	$	491,211	$	502,883
Non-GAAP adjustments:
Expenses:
Store disposition		1,104		-		1,104		-
Aggregate impact of non-GAAP adjustments		1,104		-		1,104		-
Adjusted gross profit	$	202,865	$	209,533	$	492,315	$	502,883

	Third Quarter Ended					Year-to-Date Ended
	November 2,			October 27,		November 2,			October 27,
	2013			2012		2013			2012
Selling, general and administrative expenses	$	123,521		$	131,875	$	366,937		$	374,833
Non-GAAP adjustments:
Expenses:
Store disposition		(117	)		-		(117	)		-
Asia reorganization		(178	)		-		(1,190	)		-
IT costs		-			-		(1,210	)		-
Restructuring severance costs		-			-		-			(1,971	)
Obsolete supply and fixture costs		-			-		-			(883	)
Legal settlement		-			-		-			(1,087	)
Aggregate impact of non-GAAP adjustments		(295	)		-		(2,517	)		(3,941	)
Adjusted selling, general and administrative expenses	$	123,226		$	131,875	$	364,420		$	370,892

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