A new trend has emerged due to the current recession: frugality.
With jobs being lost every day, tighter credit and a weak housing market, consumers are pinching pennies in every way they can.
But for one store in particular, this hasn’t had the negative impact that most expected.
Children’s Place Retail Stores Inc. (Nasdaq: PLCE), a leading children’s clothing retailer, announced yesterday that its same-store sales for the month of February were flat.
Flat sales, doesn’t seem like something that we should be rejoicing over. But this beat Wall Street’s expectations of a 3.6% decline.
The important thing to remember here is that same-store sales are the best metric for measuring retail performance. So the fact that it managed to remain flat, rather than decline, points to good things in its future.
While most U.S. retailers saw lackluster same-store sales last month, The Children’s Place remained on top.
Aside from strong same-store sales, PLCE had net sales of $110.4 million for the four-week period ended February 28 – only a 1% decrease compared to the same four week period a year ago.
In a market where even discount stores – who have seen an increase in customers looking to save cash – are reporting disappointing results, that’s something to brag about. BJ’s and Costco, for example, have faced unexpected challenges in recent months.
The clothing retailer now expects quarterly earnings to come in at the high end of its outlook, somewhere between 65 and 70 cents per share.
It also adjusted its forecast for the year, changing earnings from $2.17 to $2.22
Retailers were expected to post an overall decline of 1.2% in February same-store sales on Thursday… That follows a 1.8% drop in January, which was the second-worst monthly same-store sales performance since 2000.
All of this good news bodes well for the company, especially considering it’s occurring while other retailers around it are struggling to even stay above water.
Assistant Editor, The Oxford Club