Online sales rise 9.6% in Q3 for The Children’s Place

November 21, 2014 05:20 PM

Online sales grew 9.6% in the third quarter for The Children’s Place Inc. and the specialty children’s apparel retailer expects to take advantage of a new e-commerce technology platform to better target customers in the future, Jane Elfers, president and CEO, told Wall Street analysts on the company’s earnings call yesterday.

“On the digital front, the underpinning of our digital platform is the strategic segmentation of our customers,” Elfers told analysts, according to a transcript of the call from Seeking Alpha. “This segmentation work is now complete and we’ve already started activating against these consumer insights in our holiday marketing campaign. We are piloting in-store and online enhancements to our myPlace rewards program. We’re also focused on improving organic and paid search capabilities to help us acquire new customers and drive incremental sales,” she said.

The e-commerce platform, from SAP, launched in May.

The segmentation provides a clear view of the Children’s Place shopper, “who she is and how she behaves,” Mike Scarpa, chief operating and chief financial officer, told analysts on the earnings call. “We are already utilizing this new information in our holiday e-mail marketing campaign, thus specifically and more efficiently targeting our communications to the appropriate customer segment.”

For the third quarter ended Nov. 1, The Children’s Place, No. 116 in the Internet Retailer 2014 Top 500 Guide, reported:

  • E-commerce accounted for 16.4% of total sales, compared with 14.8% in the same quarter last year, Scarpa said. Based on those metrics, online sales were $79.9 million, up by 9.6% from $72.9 million in the third quarter last year.
  • Total sales were $487.3 million in the third quarter of 2014, a decrease of 1.1% from $492.7 million in the third quarter of 2013.
  • Comparable-store sales, which include e-commerce, increased 0.2%. The positive result came from an increase in transactions, partially offset by a decline in average order value, Scarpa told analysts.
  • Net income of $36.9 million, down by 11.5% from net income of $41.7 million in the same period last year.

The Children’s Place continues to execute on its previously disclosed plan to close 125 underperforming stores through 2016, including 41 stores closed in 2013 and approximately 35 stores targeted for closure in 2014, Scarpa said. “We are seeing a sales transfer rate in excess of 20% to nearby stores or to e-commerce as a result of these store closures,” he said.

The Children’s Place did not break out e-commerce sales for the first nine months of fiscal 2014, but did report:

  • Total sales of $1.282 billion, a 1.2% decline from $1.298 billion in the first nine months of 2013.
  • Comparable-store sales declined 0.8%.
  • Net income was $39.9 million, up by 6.7% from net income of $37.4 million in the same period last year.



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