Children's Place (NASDAQ: PLCE) didn't have that bad of a first quarter. I was actually surprised to see increases in both comparable sales and earnings per share. Not every retailer can boast such a claim.
The press release said that net sales from continuing operations were essentially flat. Keeping the top line steady is something of a victory in this economy. On an adjusted basis, Children's Place earned $0.74 per diluted share from continuing operations. That's actually three pennies better than the previous year's performance. It would have been nice if the retailer had been able to beat the analysts in the expectations game, but it was not to be. The bottom line merely met the call.
That's okay. I was really shocked by the fact that Children's Place actually increased its same-store sales metric by 1%. Pleasantly shocked, in fact. I would have bet on a drop.
Children's Place used to run Disney's (NYSE: DIS) North American retail operations, but the company decided to rid itself of that business. I can understand that decision. It's probably better to focus on growing the core brand.
While I thought Children's Place had a decent quarter, I wouldn't be a buyer of the stock. The shares have actually been a very good investment in recent times. If you had picked some up at the 52-week low of $16.45, you would be sitting on a pretty darn good gain right now. As I write this, the shares are priced at over $34. I'd have to see a big drop in the share price before I'd enter a position in this company.
Going forward, I think the retailer might make a good trading vehicle at times, but it's certainly not a company I want for a long-term portfolio. There are definitely better brands out there. Plus, considering the failure it had with the Disney Store investment, I'm not sure I trust this company to always make the best decisions for shareholder value.
Disclosure: I own Disney; positions can change without notice.
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