SEGMENT INFORMATION

9 Months Ended

Oct. 27, 2012

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

In accordance with the “Segment Reporting” topic of the FASB ASC, the Company reports segment data based on geography: The Children’s Place U.S. and The Children’s Place Canada.  Each segment includes an e-commerce business located at www.childrensplace.com.  Included in The Children’s Place U.S. segment are the Company’s U.S. and Puerto Rico based stores. Included in The Children's Place Canada segment are the Company's Canadian based stores and revenue from international franchisees. The Company measures its segment profitability based on operating income, defined as income 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 October 27, 2012, The Children’s Place U.S. operated 973 stores and The Children’s Place Canada operated 129 stores. As of October 29, 2011, The Children’s Place U.S. operated 953 stores and The Children’s Place Canada operated 123 stores.

The following tables provide segment level financial information (dollars in thousands):

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	October 27, 2012			October 29, 2011			October 27, 2012			October 29, 2011
Net sales (1):
The Children’s Place U.S.	$	424,854		$	416,781		$	1,119,690		$	1,091,706
The Children’s Place Canada (2)	76,074			67,304			180,572			166,693
Total net sales	$	500,928		$	484,085		$	1,300,262		$	1,258,399
Gross profit:
The Children’s Place U.S.	$	170,209		$	165,310		$	420,705		$	418,055
The Children’s Place Canada	35,994			34,741			76,528			81,208
Total gross profit	$	206,203		$	200,051		$	497,233		$	499,263
Gross Margin:
The Children’s Place U.S.	40.1		%	39.7		%	37.6		%	38.3		%
The Children’s Place Canada	47.3		%	51.6		%	42.4		%	48.7		%
Total gross margin	41.2		%	41.3		%	38.2		%	39.7		%
Operating income:
The Children’s Place U.S. (3)	$	38,050		$	41,196		$	45,364		$	62,182
The Children’s Place Canada (5)	12,189			13,252			13,319			25,264
Total operating income	$	50,239		$	54,448		$	58,683		$	87,446
Operating income as a percent of net sales:
The Children’s Place U.S.	9.0		%	9.9		%	4.1		%	5.7		%
The Children’s Place Canada	16.0		%	19.7		%	7.4		%	15.2		%
Total operating income	10.0		%	11.2		%	4.5		%	6.9		%
Depreciation and amortization:
The Children’s Place U.S. (4)	$	19,497		$	16,142		$	48,220		$	48,105
The Children’s Place Canada (5)	3,526			2,351			9,503			6,617
Total depreciation and amortization	$	23,023		$	18,493		$	57,723		$	54,722
Capital expenditures:
The Children’s Place U.S.	$	24,783		$	14,154		$	60,073		$	53,849
The Children’s Place Canada	2,360			3,001			11,307			10,031
Total capital expenditures	$	27,143		$	17,155		$	71,380		$	63,880

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(1) All of the Company's foreign revenues are included in The Children's Place Canada segment.

(2) Includes approximately $5.5 million and $6.0 million of revenue from international franchisees for the Third Quarter 2012 and Year-To-Date 2012, respectively. There was no revenue from international franchisees prior to fiscal 2012.

(3) Includes exit costs associated with the closures of the West Coast DC and Northeast DC of approximately $0.6 million and $4.5 million for the Third Quarter 2012 and Year-To-Date 2012, respectively, and approximately $5.7 million of accelerated depreciation associated with the closure of the Northeast DC for the Third Quarter 2012 and Year-To-Date 2012.

(4) Includes approximately $5.7 million of accelerated depreciation associated with the closure of the Northeast DC for the Third Quarter 2012 and Year-To-Date 2012.

(5) The Company remodeled certain Canadian stores earlier than originally anticipated. Accelerated depreciation associated with these stores approximated $0.3 million and $1.6 million for the Third Quarter 2012 and Year-To-Date 2012, respectively.

	October 27, 2012		January 28, 2012		October 29, 2011
Total assets:
The Children’s Place U.S.	$	770,009	$	693,489	$	720,823
The Children’s Place Canada	169,896		157,160		153,357
Total assets	$	939,905	$	850,649	$	874,180