Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Oct. 31, 2015 | Dec. 07, 2015 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Childrens Place, Inc. | |
Entity Central Index Key | 1,041,859 | |
Current Fiscal Year End Date | --01-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 19,967,195 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2015 | Jan. 31, 2015 | Nov. 01, 2014 |
Current assets: | |||
Cash and cash equivalents | $ 183,923 | $ 173,291 | $ 170,787 |
Short-term investments | 34,600 | 52,000 | 39,000 |
Accounts receivable | 36,501 | 31,928 | 28,126 |
Inventories | 327,324 | 297,631 | 342,455 |
Prepaid expenses and other current assets | 33,587 | 39,349 | 32,859 |
Deferred income taxes | 18,519 | 15,080 | 16,564 |
Total current assets | 634,454 | 609,279 | 629,791 |
Long-term assets: | |||
Property and equipment, net | 302,216 | 310,301 | 318,871 |
Deferred income taxes | 36,751 | 35,580 | 43,186 |
Other assets | 3,937 | 3,458 | 3,573 |
Total assets | 977,358 | 958,618 | 995,421 |
Current liabilities: | |||
Revolving loan | 34,351 | 0 | 19,100 |
Accounts payable | 183,738 | 155,323 | 150,426 |
Income taxes payable | 5,141 | 420 | 4,547 |
Accrued expenses and other current liabilities | 110,474 | 118,724 | 123,062 |
Total current liabilities | 333,704 | 274,467 | 297,135 |
Long-term liabilities: | |||
Deferred rent liabilities | 72,927 | 80,214 | 83,667 |
Other tax liabilities | 5,878 | 6,446 | 5,151 |
Other long-term liabilities | 15,322 | 8,373 | 8,802 |
Total liabilities | 427,831 | 369,500 | 394,755 |
STOCKHOLDERS' EQUITY: | |||
Preferred stock, $1.00 par value, 1,000 shares authorized, 0 shares issued and outstanding | 0 | 0 | 0 |
Common stock, $0.10 par value, 100,000 shares authorized; 20,139, 21,075 and 21,360 issued; 20,101, 21,040 and 21,316 outstanding | 2,014 | 2,108 | 2,136 |
Additional paid-in capital | 230,646 | 230,429 | 228,552 |
Treasury stock, at cost (38, 35, and 44 shares) | (1,877) | (1,682) | (2,123) |
Deferred compensation | 1,877 | 1,682 | 2,123 |
Accumulated other comprehensive income | (20,243) | (17,493) | (2,944) |
Retained earnings | 337,110 | 374,074 | 372,922 |
Total stockholders' equity | 549,527 | 589,118 | 600,666 |
Total liabilities and stockholders' equity | $ 977,358 | $ 958,618 | $ 995,421 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | ||
Oct. 31, 2015 | Jan. 31, 2015 | Nov. 01, 2014 | |
Document Period End Date | Oct. 31, 2015 | ||
Common Stock, Par or Stated Value Per Share | $ 0.10 | $ 0.10 | $ 0.10 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 20,139,000 | 21,075,000 | 21,360,000 |
Common Stock, Shares, Outstanding | 20,101,000 | 21,040,000 | 21,316,000 |
Preferred Stock, Par or Stated Value Per Share | $ 1 | $ 1 | $ 1 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 0 | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 | 0 |
Treasury Stock, Shares | 38,000 | 35,000 | 44,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Net sales | $ 455,913 | $ 487,304 | $ 1,227,233 | $ 1,282,081 |
Cost of sales | 275,400 | 297,193 | 779,607 | 824,591 |
Gross profit | 180,513 | 190,111 | 447,626 | 457,490 |
Selling, general and administrative expenses | 105,797 | 116,120 | 338,653 | 346,951 |
Asset impairment charges | 919 | 3,306 | 2,371 | 6,351 |
Business Exit Costs | 14 | (286) | 87 | (153) |
Depreciation and amortization | 16,136 | 15,168 | 45,782 | 44,952 |
Operating income (loss) | 57,647 | 55,803 | 60,733 | 59,389 |
Interest (expense), net | (254) | (82) | (635) | (123) |
Income (loss) from continuing operations before income taxes | 57,393 | 55,721 | 60,098 | 59,266 |
Provision (benefit) for income taxes | 18,898 | 18,779 | 19,687 | 19,415 |
Net income (loss) | $ 38,495 | $ 36,942 | $ 40,411 | $ 39,851 |
Basic earnings (loss) per share amounts | ||||
Net income (loss) (in dollars per share) | $ 1.90 | $ 1.71 | $ 1.96 | $ 1.82 |
Basic weighted average common shares outstanding (in shares) | 20,297 | 21,541 | 20,628 | 21,843 |
Diluted earnings (loss) per share amounts | ||||
Net income (loss) (in dollars per share) | $ 1.88 | $ 1.70 | $ 1.94 | $ 1.81 |
Diluted weighted average common shares outstanding (in shares) | 20,517 | 21,756 | 20,878 | 22,062 |
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | $ 0.1325 | $ 0.45 | $ 0.3975 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Net income | $ 38,495 | $ 36,942 | $ 40,411 | $ 39,851 |
Foreign currency translation adjustment | 155 | (4,037) | (2,845) | (1,415) |
Change in fair value of cash flow hedges, net of income taxes of $49 and $(34), respectively | (134) | 0 | 95 | 0 |
Comprehensive income | $ 38,516 | $ 32,905 | $ 37,661 | $ 38,436 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2015 | Nov. 01, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 40,411 | $ 39,851 |
Reconciliation of income from continuing operations to net cash provided by operating activities: | ||
Depreciation and amortization | 45,782 | 44,952 |
Stock-based compensation | 12,456 | 13,054 |
Excess tax benefits from stock-based compensation | (1,040) | (268) |
Deferred taxes | (4,754) | (9,304) |
Asset impairment charges | 2,371 | 6,351 |
Deferred rent expense and lease incentives | (7,223) | (6,955) |
Other | 905 | 1,711 |
Changes in operating assets and liabilities: | ||
Inventories | (30,663) | (20,468) |
Prepaid expenses and other assets | (7,650) | (2,746) |
Income taxes payable, net of prepayments | 13,757 | 10,868 |
Accounts payable and other current liabilities | 14,462 | (10,792) |
Deferred rent and other liabilities | 6,247 | 2,302 |
Total adjustments | 44,650 | 28,705 |
Net cash provided by operating activities | 85,061 | 68,556 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property and equipment purchases, lease acquisition and software costs | (33,969) | (44,637) |
Purchase of short-term investments | (70,880) | (58,000) |
Proceeds from Sale of Short-term Investments | 88,280 | 81,500 |
Change in company-owned life insurance policies | (363) | 17 |
Net cash used in investing activities | (16,932) | (21,120) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings under revolving credit facilities | 478,500 | 265,653 |
Repayments under revolving credit facilities | (444,149) | (246,553) |
Deferred financing costs | 320 | 306 |
Purchase and retirement of common stock, including transaction costs | (82,615) | (59,965) |
Payments of Ordinary Dividends, Common Stock | (9,232) | (8,684) |
Exercise of stock options | 438 | 55 |
Excess tax benefits from stock-based compensation | 1,040 | 268 |
Net cash provided by (used in) financing activities | (56,338) | (49,532) |
Effect of exchange rate changes on cash | (1,159) | (1,114) |
Net increase (decrease) in cash and cash equivalents | 10,632 | (3,210) |
Cash and cash equivalents, beginning of period | 173,291 | |
Cash and cash equivalents, end of period | 183,923 | 170,787 |
OTHER CASH FLOW INFORMATION: | ||
Net cash paid during the year for income taxes | 10,080 | 18,102 |
Cash paid during the year for interest | 1,120 | 676 |
Payments for (Proceeds from) Productive Assets | $ (2,251) | $ 4,056 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of The Children’s Place, Inc. (the “Company”) as of October 31, 2015 and November 1, 2014 and the results of its consolidated operations and cash flows for the thirty-nine weeks ended October 31, 2015 and November 1, 2014 . The consolidated financial position as of January 31, 2015 was derived from audited financial statements. Due to the seasonal nature of the Company’s business, the results of operations for the thirty-nine weeks ended October 31, 2015 and November 1, 2014 are not necessarily indicative of operating results for a full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2015 . Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Terms that are commonly used in the Company’s notes to condensed consolidated financial statements are defined as follows: • Third Quarter 2015 — The thirteen weeks ended October 31, 2015 . • Third Quarter 2014 — The thirteen weeks ended November 1, 2014 . • Year-To-Date 2015 — The thirty-nine weeks ended October 31, 2015 . • Year-To-Date 2014 — The thirty-nine weeks ended November 1, 2014 . • FASB — Financial Accounting Standards Board. • SEC — U.S. Securities and Exchange Commission. • U.S. GAAP — Generally Accepted Accounting Principles in the United States. • FASB ASC — FASB Accounting Standards Codification, which serves as the source for authoritative U.S. GAAP, except that rules and interpretive releases by the SEC are also sources of authoritative U.S. GAAP for SEC registrants. Short-term Investments Short-term investments consist of investments which the Company expects to convert into cash within one year, including time deposits, which have original maturities greater than 90 days. The Company classifies its investments in securities at the time of purchase as held-to-maturity and reevaluates such classifications on a quarterly basis. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. These securities are recorded at cost and adjusted for the amortization of premiums and discounts, which approximates fair value. Cash inflows and outflows related to the sale and purchase of investments are classified as investing activities in the Company's consolidated statements of cash flows. All of the Company's short-term investments are U.S. dollar denominated time deposits with banking institutions in Hong Kong that have six month maturity dates. Stock-based Compensation The Company generally grants time vesting stock awards ("Deferred Awards") and performance-based stock awards ("Performance Awards") to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. Deferred Awards are granted in the form of restricted stock units that require each recipient to complete a service period. Deferred Awards generally vest ratably over three years, except for those granted to non-employee directors, which generally vest after one year. Performance Awards are granted in the form of restricted stock units which have performance criteria that must be achieved for the awards to vest in addition to a service period requirement. For Performance Awards issued during fiscal 2013, each award has a defined number of shares that an employee can earn (the “Target Shares”) and, based on the adjusted operating income level achieved for the three-fiscal year period, the employee can earn from 0% to 200% of their Target Shares. The fair value of these Performance Awards and all Deferred Awards granted is based on the closing price of our common stock on the grant date. The 2013 Performance Awards cliff vest, if earned, after completion of the three year performance period. For Performance Awards issued during fiscal 2014 and 2015 (the “2014 and 2015 Performance Awards”), the employee can earn from 0% to 300% of their Target Shares based on the achievement of adjusted earnings per share for a cumulative three-fiscal year performance period and our total shareholder return (“TSR”) relative to that of companies in our peer group. The 2014 and 2015 Performance Awards cliff vest, if earned, after completion of the applicable three year performance period. The 2014 and 2015 Performance Awards grant date fair value was estimated using a Monte Carlo simulation covering the period from the valuation date through the end of the applicable performance period using our simulated stock price as well as the TSR of companies in our peer group. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. Stock-based compensation expense, as it relates to Performance Awards, is also adjusted based on the Company's estimate of adjusted operating income and adjusted earnings per share as they occur. Deferred Compensation Plan The Company has a deferred compensation plan (the “Deferred Compensation Plan”), which is a nonqualified plan, for eligible senior level employees. Under the plan, participants may elect to defer up to 80% of his or her base salary and/or up to 100% of his or her bonus to be earned for the year following the year in which the deferral election is made. The Deferred Compensation Plan also permits members of the Board of Directors to elect to defer payment of all or a portion of their retainer and other fees to be earned for the year following the year in which a deferral election is made. In addition, eligible employees and directors of the Company may also elect to defer payment of any shares of Company stock that is earned with respect to stock-based awards. Directors may elect to have all or a certain portion of their fees earned for their service on the Board invested in shares of the Company’s common stock. Such elections are irrevocable. The Company is not required to contribute to the Deferred Compensation Plan, but at its sole discretion, can make additional contributions on behalf of the participants. Deferred amounts are not subject to forfeiture and are deemed invested among investment funds offered under the Deferred Compensation Plan, as directed by each participant. Payments of deferred amounts (as adjusted for earnings and losses) are payable following separation from service or at a date or dates elected by the participant at the time the deferral is elected. Payments of deferred amounts are generally made in either a lump sum or in annual installments over a period not exceeding 15.0 years. All deferred amounts are payable in the form in which they were made except for board fees invested in shares of the Company's common stock, which will be settled in shares of Company common stock. Earlier distributions are not permitted except in the case of an unforeseen hardship. The Company has established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The assets of the rabbi trust are general assets of the Company and as such, would be subject to the claims of creditors in the event of bankruptcy or insolvency. Investments of the rabbi trust consist of mutual funds and Company common stock. The Deferred Compensation Plan liability, excluding Company common stock, is included in other long-term liabilities and changes in the balance, except those relating to payments, are recognized as compensation expense. The value of the mutual funds is included in other assets and related earnings and losses are recognized as investment income or loss, which is included in selling, general and administrative expenses. Company stock deferrals are included in the equity section of the Company’s consolidated balance sheet as treasury stock and as a deferred compensation liability. Deferred stock is recorded at fair market value at the time of deferral and any subsequent changes in fair market value are not recognized. The Deferred Compensation Plan liability, excluding Company stock, at fair value, was approximately $0.7 million , $0.5 million , and $0.5 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively. The value of the Deferred Compensation Plan assets was approximately $0.7 million , $0.3 million and $0.3 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively. Company stock was $1.9 million , $1.7 million , and $2.1 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively. Exit or Disposal Cost Obligations In accordance with the “ Exit or Disposal Cost Obligations ” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term and without future economic benefit to the Company. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met: • management, having the authority to approve the action, commits to a plan of termination; • the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; • the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; and • actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. During the first quarter of fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of the Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of October 31, 2015 , of which approximately $0.6 million was included in accrued expenses and other current liabilities and approximately $0.4 million was included in other long-term liabilities (dollars in thousands): Other Associated Costs Lease Termination Costs Total Balance at January 31, 2015 $ — $ 1,508 $ 1,508 Restructuring costs 36 51 87 Payments and reductions (36 ) (600 ) (636 ) Balance at October 31, 2015 $ — $ 959 $ 959 Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows: • Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities • Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly • Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities The Company’s cash and cash equivalents, short-term investments, assets of the Company’s Deferred Compensation Plan, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The Company stock that is included in the Deferred Compensation Plan is not subject to fair value measurement. The Company's assets and liabilities include foreign exchange forward contracts that are measured at fair value using observable market inputs such as forward rates, the Company's credit risk and our counterparties’ credit risks. Based on these inputs, the Company's derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. Recently Adopted Accounting Standards In May 2014, the FASB issued guidance relating to revenue recognition from contracts with customers. This guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued guidance to defer the effective date by one year and, therefore, the standard is effective for fiscal years and interim periods within those years beginning after December 15, 2017 and is to be applied retrospectively. We are currently reviewing the potential impact of this standard. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY The Company's Board of Directors authorizes the Company's share repurchase programs, including: (1) $100 million on November 26, 2012 (the "2012 Share Repurchase Program"); (2) $100 million on March 3, 2014 (the "2014 Share Repurchase Program") and (3) $100 million on January 7, 2015 (the "2015 Share Repurchase Program"). The 2012 Share Repurchase Program and the 2014 Share Repurchase Program have been completed. At October 31, 2015 , there was approximately $59.0 million remaining on the 2015 Share Repurchase Program. Under the 2015 Share Repurchase Program, the Company may repurchase shares in the open market at current market prices at the time of purchase or in privately negotiated transactions. The timing and actual number of shares repurchased under a program will depend on a variety of factors including price, corporate and regulatory requirements, and other market and business conditions. The Company may suspend or discontinue a program at any time, and may thereafter reinstitute purchases, all without prior announcement. Pursuant to restrictions imposed by the Company's insider trading policy during black-out periods, the Company withholds and retires shares of vesting stock awards and makes payments to taxing authorities as required by law to satisfy the withholding tax requirements of certain recipients. The Company's payment of the withholding taxes in exchange for the retired shares constitutes a purchase of its common stock. The Company also acquires shares of its common stock in conjunction with liabilities owed under the Company's Deferred Compensation Plan, which are held in treasury. The following table summarizes the Company's share repurchases (in thousands): Thirty-nine Weeks Ended October 31, 2015 November 1, 2014 Shares Value Shares Value Shares repurchases related to: 2012 Share Repurchase Program — $ — 282 $ 14,671 2014 Share Repurchase Program 640 39,791 896 44,037 2015 Share Repurchase Program (1) 662 41,026 — — Withholding taxes and other 28 1,798 25 1,257 Shares acquired and held in treasury 3 $ 195 11 $ 548 (1) Subsequent to October 31, 2015 and through December 7, 2015, the Company repurchased 0.1 million shares for approximately $7.5 million . In accordance with the “ Equity ” topic of the FASB ASC, the par value of the shares retired is charged against common stock and the remaining purchase price is allocated between additional paid-in capital and retained earnings. The portion charged against additional paid-in capital is done using a pro rata allocation based on total shares outstanding. Related to all shares retired during Year-To-Date 2015 and Year-To-Date 2014 , approximately $67.7 million and $47.4 million , respectively, were charged to retained earnings. In the first quarter of fiscal 2014 the Company's Board of Directors first authorized a quarterly cash dividend. The Third Quarter 2015 dividend of $0.15 per share was paid on October 8, 2015 to shareholders of record on the close of business on September 17, 2015. Related to the fiscal 2015 dividends, $9.7 million was charged to retained earnings, of which $9.2 million related to cash dividends paid and $0.5 million related to dividend share equivalents on unvested Deferred Awards and Performance Awards. Related to the fiscal 2014 dividends, $9.1 million was charged to retained earnings, of which $8.7 million related to cash dividends paid and $0.4 million related to dividend share equivalents on unvested Deferred Awards and Performance Awards. The Company's Board of Directors declared a quarterly cash dividend of $0.15 per share to be paid on January 7, 2016 to shareholders of record on the close of business on December 17, 2015. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Company’s Board of Directors based on a number of factors, including business and market conditions, the Company’s future financial performance and other investment priorities. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The following table summarizes the Company’s stock-based compensation expense (in thousands): Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Deferred Awards $ 2,429 $ 2,856 $ 8,123 $ 8,615 Performance Awards 1,853 1,825 4,333 4,439 Total stock-based compensation expense (1) $ 4,282 $ 4,681 $ 12,456 $ 13,054 ____________________________________________ (1) During the Third Quarter 2015 and the Third Quarter 2014 , approximately $0.9 million and $1.0 million , respectively, were included in cost of sales. During Year-To-Date 2015 and Year-To-Date 2014 , approximately $2.3 million and $2.5 million , respectively, were included in cost of sales. All other stock-based compensation is included in selling, general & administrative expenses. The Company recognized a tax benefit related to stock-based compensation expense of approximately $4.8 million and $5.1 million for Year-To-Date 2015 and Year-To-Date 2014 , respectively. Awards Granted During Year-To-Date 2015 The Company granted Deferred Awards and Performance Awards to various executives and members of our Board of Directors during Year-To-Date 2015 . Awards were also granted in connection with new hires and contractual obligations. Generally, the Deferred Awards have a three year vesting period with one third of the award vesting annually. Generally, the Deferred Awards granted to the Board of Directors vest after one year. Performance Awards granted have a cumulative three-year performance period, and, if earned, vest upon completion of the three-year performance period. Depending on the final adjusted earnings per share achieved for the cumulative three-year performance period and the Company's TSR relative to that of the Company's peer group, the percentage of Target Shares earned can be 0% and range up to 300%. Changes in the Company’s Unvested Stock Awards during Year-To-Date 2015 Deferred Awards Number of Shares Weighted Average Grant Date Fair Value (in thousands) Unvested Deferred Awards, beginning of period 592 $ 49.02 Granted 184 65.55 Vested (237 ) 48.91 Forfeited (20 ) 54.53 Unvested Deferred Awards, end of period 519 $ 54.71 Total unrecognized stock-based compensation expense related to unvested Deferred Awards approximated $17.9 million as of October 31, 2015 , which will be recognized over a weighted average period of approximately 2.1 years. Performance Awards Number of Shares (1) Weighted Average Grant Date Fair Value (in thousands) Unvested Performance Awards, beginning of period 345 $ 50.18 Granted 195 70.91 Vested shares, including shares vested in excess of target (147 ) 48.02 Forfeited (7 ) 52.33 Unvested Performance Awards, end of period 386 $ 61.45 ____________________________________________ (1) For those awards in which the performance period is complete, the number of unvested shares is based on actual shares that will vest upon completion of the service period. For those awards in which the performance period is not yet complete, the number of unvested shares is based on the participants earning their Target Shares at 100% . For those awards in which the performance period is not yet complete, the number of unvested shares in the table above is based on the participants earning their Target Shares at 100% ; however, the cumulative expense recognized reflects changes in estimated adjusted operating income and adjusted earnings per share as they occur. Total unrecognized stock-based compensation expense related to unvested Performance Awards approximated $15.1 million as of October 31, 2015 , which will be recognized over a weighted average period of approximately 2.2 years. Stock Options At October 31, 2015 , there were no unvested stock options. Outstanding Stock Options Changes in the Company’s outstanding stock options for Year-To-Date 2015 were as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Options outstanding, beginning of period 30 $ 29.05 3.3 $ 927 Exercised (15 ) 29.05 N/A 455 Options outstanding and exercisable, end of period 15 $ 29.05 2.5 $ 369 |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 9 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME PER COMMON SHARE The following table reconciles net income and share amounts utilized to calculate basic and diluted net income per common share (in thousands): Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, 2015 November 1, 2014 October 31, 2015 November 1, 2014 Net income $ 38,495 $ 36,942 $ 40,411 $ 39,851 Basic weighted average common shares 20,297 21,541 20,628 21,843 Dilutive effect of stock awards 220 215 250 219 Diluted weighted average common shares 20,517 21,756 20,878 22,062 Antidilutive stock awards 1 2 1 1 Antidilutive stock awards (stock options, Deferred Awards and Performance Awards) represent those awards that are excluded from the earnings per share calculation as a result of their antidilutive effect in the application of the treasury stock method in accordance with the “ Earnings per Share” topic of the FASB ASC. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Oct. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands): Asset Life October 31, 2015 January 31, 2015 November 1, 2014 Property and equipment: Land and land improvements — $ 3,403 $ 3,403 $ 3,403 Building and improvements 20-25 yrs 35,548 35,548 35,548 Material handling equipment 10-15 yrs 48,345 48,479 48,479 Leasehold improvements 3-15 yrs 333,602 339,474 348,466 Store fixtures and equipment 3-10 yrs 231,090 231,797 236,342 Capitalized software 3-10 yrs 170,364 120,054 116,426 Construction in progress — 6,302 24,644 19,961 828,654 803,399 808,625 Accumulated depreciation and amortization (526,438 ) (493,098 ) (489,754 ) Property and equipment, net $ 302,216 $ 310,301 $ 318,871 At October 31, 2015 , the Company performed impairment testing on 1,059 stores with a total net book value of approximately $118.8 million . During the Third Quarter 2015, the Company recorded asset impairment charges of $0.9 million for 15 stores, of which nine were fully impaired and six were partially impaired. During Year-To-Date 2015 , the Company recorded asset impairment charges of $2.4 million for 22 stores, of which 10 were fully impaired and 12 were partially impaired. At October 31, 2015 , the aggregate net book value of the stores that were partially impaired was approximately $2.4 million , which the Company determined to be recoverable based on an estimate of discounted future cash flows. At November 1, 2014 , the Company performed impairment testing on 1,017 stores with a total net book value of approximately $142.9 million . During the Third Quarter 2014, the Company recorded asset impairment charges of $3.3 million for 15 stores, of which 14 were fully impaired and one was partially impaired. During Year-To-Date 2014 , the Company recorded asset impairment charges of $6.4 million for 45 stores, of which 34 were fully impaired and 11 were partially impaired. As of October 31, 2015 , January 31, 2015 and November 1, 2014 , the Company had approximately $4.3 million , $6.6 million and $14.3 million , respectively, in property and equipment for which payment had not yet been made. These amounts are included in Accounts payable and Accrued expenses and other current liabilities. |
CREDIT FACILITY
CREDIT FACILITY | 9 Months Ended |
Oct. 31, 2015 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY The Company and certain of its domestic subsidiaries maintain a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”), Bank of America, N.A., HSBC Business Credit (USA) Inc., and JPMorgan Chase Bank, N.A. as lenders (collectively, the “Lenders”) and Wells Fargo, as Administrative Agent, Collateral Agent and Swing Line Lender (the “Credit Agreement”). The Credit Agreement was amended on September 15, 2015 and the provisions below reflect the amended and extended Credit Agreement. The Credit Agreement, which expires in September 2020, consists of a $250 million asset based revolving credit facility, with a $50 million sublimit for standby and documentary letters of credit and an uncommitted accordion feature that could provide up to $50 million of additional availability. Revolving credit loans outstanding under the Credit Agreement bear interest, at the Company’s option, at: (i) the prime rate plus a margin of 0.50% to 0.75% based on the amount of the Company’s average excess availability under the facility; or (ii) the London InterBank Offered Rate, or “LIBOR”, for an interest period of one, two, three or six months, as selected by the Company, plus a margin of 1.25% to 1.50% based on the amount of the Company’s average excess availability under the facility. The Company is charged an unused line fee of 0.25% on the unused portion of the commitments. Letter of credit fees range from 0.625% to 0.75% for commercial letters of credit and range from 0.75% to 1.00% for standby letters of credit. Letter of credit fees are determined based on the amount of the Company's average excess availability under the facility. The amount available for loans and letters of credit under the Credit Agreement is determined by a borrowing base consisting of certain credit card receivables, certain trade and franchise receivables, certain inventory and the fair market value of certain real estate, subject to certain reserves. The outstanding obligations under the Credit Agreement may be accelerated upon the occurrence of certain events, including, among others, non-payment, breach of covenants, the institution of insolvency proceedings, defaults under other material indebtedness and a change of control, subject, in the case of certain defaults, to the expiration of applicable grace periods. The Company is not subject to any early termination fees. The Credit Agreement contains covenants, which include conditions on stock buybacks and the payment of cash dividends or similar payments. Credit extended under the Credit Agreement is secured by a first priority security interest in substantially all of the Company’s U.S. assets excluding intellectual property, software, equipment and fixtures. As of October 31, 2015 , the Company has capitalized an aggregate of approximately $4.3 million in deferred financing costs related to the Credit Agreement. The unamortized balance of deferred financing costs at October 31, 2015 was approximately $1.3 million . Unamortized deferred financing costs are amortized over the remaining term of the Credit Agreement. In conjunction with amending the agreement in September 2015, the Company paid $0.3 million in additional deferred financing costs. The table below presents the components (in millions) of the Company’s credit facility: October 31, January 31, November 1, Credit facility maximum $ 250.0 $ 200.0 $ 200.0 Borrowing base 250.0 183.2 200.0 Outstanding borrowings 34.4 — 19.1 Letters of credit outstanding—merchandise — — 0.1 Letters of credit outstanding—standby 7.1 9.1 9.1 Utilization of credit facility at end of period 41.5 9.1 28.3 Availability (1) $ 208.5 $ 174.1 $ 171.7 Interest rate at end of period 2.3 % 3.8 % 2.1 % Year-To-Date 2015 Fiscal 2014 Year-To-Date 2014 Average end of day loan balance during the period $ 34.0 $ 9.4 $ 9.7 Highest end of day loan balance during the period 67.5 40.9 40.9 Average interest rate 2.7 % 3.2 % 3.3 % ____________________________________________ (1) The sublimit availability for the letters of credit was $42.9 million , $40.9 million , and $40.8 million at October 31, 2015 , January 31, 2015 , and November 1, 2014 , respectively. |
LEGAL AND REGULATORY MATTERS
LEGAL AND REGULATORY MATTERS | 9 Months Ended |
Oct. 31, 2015 | |
LEGAL AND REGULATORY MATTERS [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL AND REGULATORY MATTERS During the Third Quarter 2015 , neither the Company nor any of its subsidiaries became a party to, nor did any of their property become the subject of, any material legal proceedings, and there were no material developments to any legal proceedings previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2015 . The Company is also involved in various legal proceedings arising in the normal course of business. In the opinion of management, any ultimate liability arising out of these proceedings will not have a material adverse effect on the Company's financial position, results of operations or cash flows. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company computes income taxes using the liability method. This method requires recognition of deferred tax assets and liabilities, measured by enacted rates, attributable to temporary differences between the financial statement and income tax basis of assets and liabilities. The Company's deferred tax assets and liabilities are comprised largely of differences relating to depreciation, rent expense, inventory and various accruals and reserves. The Company’s effective tax rate for the Third Quarter 2015 and Year-To-Date 2015 was 32.9% and 32.8% , respectively, compared to 33.7% and 32.8% during the Third Quarter 2014 and Year-To-Date 2014 , respectively. The Company recognized less than $0.1 million and $0.1 million during the Third Quarter 2015 and Year-To-Date 2015 , respectively, of additional interest expense related to its unrecognized tax benefits. During the Third Quarter 2014 and Year-To-Date 2014 the Company recognized less than $0.1 million and $0.1 million , respectively, of additional interest expense related to its unrecognized tax benefits. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company is subject to tax in the United States and foreign jurisdictions, including Canada and Hong Kong. The Company, joined by its domestic subsidiaries, files a consolidated income tax return for Federal income tax purposes. The Company, with certain exceptions, is no longer subject to income tax examinations by U.S. Federal, state and local or foreign tax authorities for tax years 2010 and prior. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations; however, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. |
DERIVATIVE INSTRUMENTS (Notes)
DERIVATIVE INSTRUMENTS (Notes) | 9 Months Ended |
Oct. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | DERIVATIVE INSTRUMENTS The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates attributable to inventory purchases denominated in a foreign currency. Specifically, our Canadian subsidiary’s functional currency is the Canadian dollar, but purchases inventory from suppliers in US dollars. In order to mitigate the variability of cash flows associated with certain of these forecasted inventory purchases, we began entering into foreign exchange forward contracts in the second quarter of fiscal 2015. These contracts typically mature within 12 months. We do not use forward contracts to engage in currency speculation and we do not enter into derivative financial instruments for trading purposes. The Company accounts for all of its derivatives and hedging activity under the “Derivatives and Hedging” topic of the FASB ASC. Under the Company’s risk management policy and in accordance with guidance under the topic, in order to qualify for hedge accounting treatment, a derivative must be considered highly effective at offsetting changes in either the hedged item’s cash flows or fair value. Additionally, the hedge relationship must be documented to include the risk management objective and strategy, the hedging instrument, the hedged item, the risk exposure, and how hedge effectiveness will be assessed prospectively and retrospectively. The Company formally measures effectiveness of its hedging relationships both at the hedge inception and on an ongoing basis. The Company would discontinue hedge accounting under a foreign exchange forward contract prospectively (i) if management determines that the derivative is no longer highly effective in offsetting changes in the cash flows of a hedged item, (ii) when the derivative expires or is terminated, (iii) if the forecasted transaction being hedged by the derivative is no longer probable of occurring, or (iv) if management determines that designation of the derivative as a hedge instrument is no longer appropriate. All derivative instruments are presented at gross fair value on the Condensed Consolidated Balance Sheets within either Prepaid expenses and other current assets or Accrued expenses and other current liabilities. As of October 31, 2015 the Company had foreign exchange forward contracts with an aggregate notional amount of $20.7 million and the fair value of the derivative instruments was an asset of $0.3 million and a liability of less than $0.1 million . As these foreign exchange forward contracts are measured at fair value using observable market inputs such as forward rates, the Company's credit risk and our counterparties’ credit risks, they are classified within Level 2 of the valuation hierarchy. Cash settlements related to these forward contracts are recorded in Cash Flows from Operating Activities within the Condensed Consolidated Statements of Cash Flows. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Other Comprehensive Income (“OCI”) and reclassified into earnings within Cost of sales (exclusive of depreciation and amortization) in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in earnings within Selling, general & administrative expenses, consistent with where the Company records realized and unrealized foreign currency gains and losses on transactions in foreign denominated currencies. Gains related to hedge effectiveness during Year-To-Date 2015 were approximately $0.2 million . Assuming October 31, 2015 exchange rates remain constant, $0.1 million of gains, net of tax, related to hedges of these transactions are expected to be reclassified from OCI into earnings over the next 12 months. Changes in fair value associated with derivatives that are not designated and qualified as cash flow hedges are recognized in earnings within Selling, general & administrative expenses. The Company enters into foreign exchange forward contracts with major banks and has risk exposure in the event of nonperformance by either party. However, based on our assessment, the Company believes that obligations under the contracts will be fully satisfied. Accordingly, there was no requirement to post collateral or other security to support the contracts as of October 31, 2015. |
INTEREST INCOME (EXPENSE), NET
INTEREST INCOME (EXPENSE), NET | 9 Months Ended |
Oct. 31, 2015 | |
Other Income and Expenses [Abstract] | |
INTEREST INCOME (EXPENSE), NET | Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Interest income $ 218 $ 268 $ 736 $ 851 Less: Interest expense – revolver 232 105 700 234 Interest expense – unused line fee 121 104 317 328 Interest expense – credit facilities 16 23 55 75 Amortization of deferred financing fees 74 88 250 264 Other interest and fees 29 30 49 73 Total interest expense 472 350 1,371 974 Interest expense $ (254 ) $ (82 ) $ (635 ) $ (123 ) |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Oct. 31, 2015 | |
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 International. 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 and revenue from the Company's U.S. based wholesale partners. Included in The Children's Place International segment are the Company's Canadian based stores, revenue from the Company's Canadian wholesale partner 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 International 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 to 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 31, 2015 , The Children’s Place U.S. operated 952 stores and The Children’s Place International operated 133 stores. As of November 1, 2014 , The Children’s Place U.S. operated 982 stores and The Children’s Place International operated 135 stores. The following tables provide segment level financial information (dollars in thousands): Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Net sales: The Children’s Place U.S. $ 400,184 $ 418,863 $ 1,079,541 $ 1,112,933 The Children’s Place International (1) 55,729 68,441 147,692 169,148 Total net sales $ 455,913 $ 487,304 $ 1,227,233 $ 1,282,081 Gross profit: The Children’s Place U.S. $ 154,251 $ 163,713 $ 386,375 $ 395,858 The Children’s Place International 26,262 26,398 61,251 61,632 Total gross profit $ 180,513 $ 190,111 $ 447,626 $ 457,490 Gross Margin: The Children’s Place U.S. 38.5 % 39.1 % 35.8 % 35.6 % The Children’s Place International 47.1 % 38.6 % 41.5 % 36.4 % Total gross margin 39.6 % 39.0 % 36.5 % 35.7 % Operating income: The Children’s Place U.S. (2) $ 46,119 $ 43,147 $ 45,355 $ 48,162 The Children’s Place International 11,528 12,656 15,378 11,227 Total operating income $ 57,647 $ 55,803 $ 60,733 $ 59,389 Operating income as a percent of net sales: The Children’s Place U.S. 11.5 % 10.3 % 4.2 % 4.3 % The Children’s Place International 20.7 % 18.5 % 10.4 % 6.6 % Total operating income 12.6 % 11.5 % 4.9 % 4.6 % Depreciation and amortization: The Children’s Place U.S. $ 14,517 $ 13,135 $ 40,986 $ 38,902 The Children’s Place International 1,619 2,033 4,796 6,050 Total depreciation and amortization $ 16,136 $ 15,168 $ 45,782 $ 44,952 Capital expenditures: The Children’s Place U.S. $ 13,716 $ 13,367 $ 33,163 $ 41,583 The Children’s Place International 104 495 806 3,054 Total capital expenditures $ 13,820 $ 13,862 $ 33,969 $ 44,637 ____________________________________________ (1) Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. (2) Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations of approximately $1.1 million for the Third Quarter 2015 . Includes costs incurred related to a class action wage and hour legal settlement, proxy contest costs, a sales tax audit, asset impairment charges and costs arising out of the restructuring of certain store and corporate operations of approximately $15.6 million during Year-To-Date 2015 . Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $4.1 million and $9.7 million for Third Quarter 2014 and the Year-To-Date 2014 , respectively. October 31, 2015 January 31, 2015 November 1, 2014 Total assets: The Children’s Place U.S. $ 828,582 $ 805,462 $ 842,823 The Children’s Place International 148,776 153,156 152,598 Total assets $ 977,358 $ 958,618 $ 995,421 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Oct. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS Subsequent to October 31, 2015 and through December 7, 2015, the Company repurchased 0.1 million shares for approximately $7.5 million , which brought total shares purchased under the 2015 Share Repurchase Program to approximately $48.5 million . On December 8, 2015, the Company announced that its Board of Directors has approved an additional $250 million share repurchase program and declared a quarterly cash dividend of $0.15 per share to be paid on January 7, 2016 to shareholders of record on the close of business on December 17, 2015. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Exit or Disposal Cost Obligations In accordance with the “ Exit or Disposal Cost Obligations ” topic of the FASB ASC, the Company records its exit and disposal costs at fair value to terminate an operating lease or contract when termination occurs before the end of its term and without future economic benefit to the Company. In cases of employee termination benefits, the Company recognizes an obligation only when all of the following criteria are met: • management, having the authority to approve the action, commits to a plan of termination; • the plan identifies the number of employees to be terminated, their job classifications or functions and their locations, and the expected completion date; • the plan establishes the terms of the benefit arrangement, including the benefits that employees will receive upon termination (including but not limited to cash payments), in sufficient detail to enable employees to determine the type and amount of benefits they will receive if they are involuntarily terminated; and • actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. During the first quarter of fiscal 2012, management approved a plan to exit its distribution center in Ontario, California (the "West Coast DC") and move the operations to its distribution center in Fort Payne, Alabama (the "Southeast DC"). The Company ceased operations at the West Coast DC in May 2012. The lease of the West Coast DC expires in March 2016 and the Company has subleased this facility through March 2016. During the third quarter of fiscal 2012, management approved a plan to close the Company's distribution center in Dayton, New Jersey ("Northeast DC") and move the operations to its Southeast DC. The Company ceased operations in the Northeast DC during the fourth quarter of fiscal 2012. The lease of the Northeast DC expires in January 2021 and the Company has subleased this facility through January 2021. The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of October 31, 2015 , of which approximately $0.6 million was included in accrued expenses and other current liabilities and approximately $0.4 million was included in other long-term liabilities (dollars in thousands): Other Associated Costs Lease Termination Costs Total Balance at January 31, 2015 $ — $ 1,508 $ 1,508 Restructuring costs 36 51 87 Payments and reductions (36 ) (600 ) (636 ) Balance at October 31, 2015 $ — $ 959 $ 959 |
Stock-based Compensation | Stock-based Compensation The Company generally grants time vesting stock awards ("Deferred Awards") and performance-based stock awards ("Performance Awards") to employees at management levels. The Company also grants Deferred Awards to its non-employee directors. Deferred Awards are granted in the form of restricted stock units that require each recipient to complete a service period. Deferred Awards generally vest ratably over three years, except for those granted to non-employee directors, which generally vest after one year. Performance Awards are granted in the form of restricted stock units which have performance criteria that must be achieved for the awards to vest in addition to a service period requirement. For Performance Awards issued during fiscal 2013, each award has a defined number of shares that an employee can earn (the “Target Shares”) and, based on the adjusted operating income level achieved for the three-fiscal year period, the employee can earn from 0% to 200% of their Target Shares. The fair value of these Performance Awards and all Deferred Awards granted is based on the closing price of our common stock on the grant date. The 2013 Performance Awards cliff vest, if earned, after completion of the three year performance period. For Performance Awards issued during fiscal 2014 and 2015 (the “2014 and 2015 Performance Awards”), the employee can earn from 0% to 300% of their Target Shares based on the achievement of adjusted earnings per share for a cumulative three-fiscal year performance period and our total shareholder return (“TSR”) relative to that of companies in our peer group. The 2014 and 2015 Performance Awards cliff vest, if earned, after completion of the applicable three year performance period. The 2014 and 2015 Performance Awards grant date fair value was estimated using a Monte Carlo simulation covering the period from the valuation date through the end of the applicable performance period using our simulated stock price as well as the TSR of companies in our peer group. Stock-based compensation expense is recognized ratably over the related service period reduced for estimated forfeitures of those awards not expected to vest due to employee turnover. Stock-based compensation expense, as it relates to Performance Awards, is also adjusted based on the Company's estimate of adjusted operating income and adjusted earnings per share as they occur. |
Deferred Compensation Plan | Deferred Compensation Plan The Company has a deferred compensation plan (the “Deferred Compensation Plan”), which is a nonqualified plan, for eligible senior level employees. Under the plan, participants may elect to defer up to 80% of his or her base salary and/or up to 100% of his or her bonus to be earned for the year following the year in which the deferral election is made. The Deferred Compensation Plan also permits members of the Board of Directors to elect to defer payment of all or a portion of their retainer and other fees to be earned for the year following the year in which a deferral election is made. In addition, eligible employees and directors of the Company may also elect to defer payment of any shares of Company stock that is earned with respect to stock-based awards. Directors may elect to have all or a certain portion of their fees earned for their service on the Board invested in shares of the Company’s common stock. Such elections are irrevocable. The Company is not required to contribute to the Deferred Compensation Plan, but at its sole discretion, can make additional contributions on behalf of the participants. Deferred amounts are not subject to forfeiture and are deemed invested among investment funds offered under the Deferred Compensation Plan, as directed by each participant. Payments of deferred amounts (as adjusted for earnings and losses) are payable following separation from service or at a date or dates elected by the participant at the time the deferral is elected. Payments of deferred amounts are generally made in either a lump sum or in annual installments over a period not exceeding 15.0 years. All deferred amounts are payable in the form in which they were made except for board fees invested in shares of the Company's common stock, which will be settled in shares of Company common stock. Earlier distributions are not permitted except in the case of an unforeseen hardship. The Company has established a rabbi trust that serves as an investment to shadow the Deferred Compensation Plan liability. The assets of the rabbi trust are general assets of the Company and as such, would be subject to the claims of creditors in the event of bankruptcy or insolvency. Investments of the rabbi trust consist of mutual funds and Company common stock. The Deferred Compensation Plan liability, excluding Company common stock, is included in other long-term liabilities and changes in the balance, except those relating to payments, are recognized as compensation expense. The value of the mutual funds is included in other assets and related earnings and losses are recognized as investment income or loss, which is included in selling, general and administrative expenses. Company stock deferrals are included in the equity section of the Company’s consolidated balance sheet as treasury stock and as a deferred compensation liability. Deferred stock is recorded at fair market value at the time of deferral and any subsequent changes in fair market value are not recognized. The Deferred Compensation Plan liability, excluding Company stock, at fair value, was approximately $0.7 million , $0.5 million , and $0.5 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively. The value of the Deferred Compensation Plan assets was approximately $0.7 million , $0.3 million and $0.3 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively. Company stock was $1.9 million , $1.7 million , and $2.1 million at October 31, 2015 , January 31, 2015 and November 1, 2014 , respectively |
Fair Value Measurement and Financial Instruments | Fair Value Measurement and Financial Instruments The “Fair Value Measurements and Disclosure” topic of the FASB ASC provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. This topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows: • Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities • Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly • Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities The Company’s cash and cash equivalents, short-term investments, assets of the Company’s Deferred Compensation Plan, accounts receivable, accounts payable and credit facility are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The Company stock that is included in the Deferred Compensation Plan is not subject to fair value measurement. The Company's assets and liabilities include foreign exchange forward contracts that are measured at fair value using observable market inputs such as forward rates, the Company's credit risk and our counterparties’ credit risks. Based on these inputs, the Company's derivative assets and liabilities are classified within Level 2 of the valuation hierarchy. The Company’s assets measured at fair value on a nonrecurring basis include long-lived assets. The Company reviews the carrying amounts of such assets when events indicate that their carrying amounts may not be recoverable. Any resulting asset impairment would require that the asset be recorded at its fair value. The resulting fair value measurements of the assets are considered to fall within Level 3 of the fair value hierarchy. |
BASIS OF PRESENTATION Exit Cost
BASIS OF PRESENTATION Exit Costs (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Schedule of Restructuring and Related Costs [Table Text Block] | The following table provides details of the remaining accruals for the West Coast DC and Northeast DC as of October 31, 2015 , of which approximately $0.6 million was included in accrued expenses and other current liabilities and approximately $0.4 million was included in other long-term liabilities (dollars in thousands): Other Associated Costs Lease Termination Costs Total Balance at January 31, 2015 $ — $ 1,508 $ 1,508 Restructuring costs 36 51 87 Payments and reductions (36 ) (600 ) (636 ) Balance at October 31, 2015 $ — $ 959 $ 959 |
STOCKHOLDERS' EQUITY Share Repu
STOCKHOLDERS' EQUITY Share Repurchase (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Schedule of Repurchase Agreements [Table Text Block] | The following table summarizes the Company's share repurchases (in thousands): Thirty-nine Weeks Ended October 31, 2015 November 1, 2014 Shares Value Shares Value Shares repurchases related to: 2012 Share Repurchase Program — $ — 282 $ 14,671 2014 Share Repurchase Program 640 39,791 896 44,037 2015 Share Repurchase Program (1) 662 41,026 — — Withholding taxes and other 28 1,798 25 1,257 Shares acquired and held in treasury 3 $ 195 11 $ 548 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock-based compensation expense | Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Deferred Awards $ 2,429 $ 2,856 $ 8,123 $ 8,615 Performance Awards 1,853 1,825 4,333 4,439 Total stock-based compensation expense (1) $ 4,282 $ 4,681 $ 12,456 $ 13,054 |
Schedule of changes in unvested deferred awards | Number of Shares Weighted Average Grant Date Fair Value (in thousands) Unvested Deferred Awards, beginning of period 592 $ 49.02 Granted 184 65.55 Vested (237 ) 48.91 Forfeited (20 ) 54.53 Unvested Deferred Awards, end of period 519 $ 54.71 |
Schedule of unvested performance awards | Number of Shares (1) Weighted Average Grant Date Fair Value (in thousands) Unvested Performance Awards, beginning of period 345 $ 50.18 Granted 195 70.91 Vested shares, including shares vested in excess of target (147 ) 48.02 Forfeited (7 ) 52.33 Unvested Performance Awards, end of period 386 $ 61.45 |
Schedule of stock option activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Options outstanding, beginning of period 30 $ 29.05 3.3 $ 927 Exercised (15 ) 29.05 N/A 455 Options outstanding and exercisable, end of period 15 $ 29.05 2.5 $ 369 |
NET INCOME (LOSS) PER COMMON 23
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Earnings Per Share [Abstract] | |
Reconciles net income (loss) and share amounts utilized to calculate basic and diluted net income (loss) per common share | Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, 2015 November 1, 2014 October 31, 2015 November 1, 2014 Net income $ 38,495 $ 36,942 $ 40,411 $ 39,851 Basic weighted average common shares 20,297 21,541 20,628 21,843 Dilutive effect of stock awards 220 215 250 219 Diluted weighted average common shares 20,517 21,756 20,878 22,062 Antidilutive stock awards 1 2 1 1 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Asset Life October 31, 2015 January 31, 2015 November 1, 2014 Property and equipment: Land and land improvements — $ 3,403 $ 3,403 $ 3,403 Building and improvements 20-25 yrs 35,548 35,548 35,548 Material handling equipment 10-15 yrs 48,345 48,479 48,479 Leasehold improvements 3-15 yrs 333,602 339,474 348,466 Store fixtures and equipment 3-10 yrs 231,090 231,797 236,342 Capitalized software 3-10 yrs 170,364 120,054 116,426 Construction in progress — 6,302 24,644 19,961 828,654 803,399 808,625 Accumulated depreciation and amortization (526,438 ) (493,098 ) (489,754 ) Property and equipment, net $ 302,216 $ 310,301 $ 318,871 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Debt Disclosure [Abstract] | |
Components of credit facility | October 31, January 31, November 1, Credit facility maximum $ 250.0 $ 200.0 $ 200.0 Borrowing base 250.0 183.2 200.0 Outstanding borrowings 34.4 — 19.1 Letters of credit outstanding—merchandise — — 0.1 Letters of credit outstanding—standby 7.1 9.1 9.1 Utilization of credit facility at end of period 41.5 9.1 28.3 Availability (1) $ 208.5 $ 174.1 $ 171.7 Interest rate at end of period 2.3 % 3.8 % 2.1 % Year-To-Date 2015 Fiscal 2014 Year-To-Date 2014 Average end of day loan balance during the period $ 34.0 $ 9.4 $ 9.7 Highest end of day loan balance during the period 67.5 40.9 40.9 Average interest rate 2.7 % 3.2 % 3.3 % ____________________________________________ (1) The sublimit availability for the letters of credit was $42.9 million , $40.9 million , and $40.8 million at October 31, 2015 , January 31, 2015 , and November 1, 2014 , respectively. |
INTEREST INCOME (EXPENSE), NET
INTEREST INCOME (EXPENSE), NET (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Other Income and Expenses [Abstract] | |
Components of interest income (expense) | The following table presents the components of the Company’s interest expense, net (in thousands): Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Interest income $ 218 $ 268 $ 736 $ 851 Less: Interest expense – revolver 232 105 700 234 Interest expense – unused line fee 121 104 317 328 Interest expense – credit facilities 16 23 55 75 Amortization of deferred financing fees 74 88 250 264 Other interest and fees 29 30 49 73 Total interest expense 472 350 1,371 974 Interest expense $ (254 ) $ (82 ) $ (635 ) $ (123 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of segment level financial information | Thirteen Weeks Ended Thirty-nine Weeks Ended October 31, November 1, October 31, November 1, Net sales: The Children’s Place U.S. $ 400,184 $ 418,863 $ 1,079,541 $ 1,112,933 The Children’s Place International (1) 55,729 68,441 147,692 169,148 Total net sales $ 455,913 $ 487,304 $ 1,227,233 $ 1,282,081 Gross profit: The Children’s Place U.S. $ 154,251 $ 163,713 $ 386,375 $ 395,858 The Children’s Place International 26,262 26,398 61,251 61,632 Total gross profit $ 180,513 $ 190,111 $ 447,626 $ 457,490 Gross Margin: The Children’s Place U.S. 38.5 % 39.1 % 35.8 % 35.6 % The Children’s Place International 47.1 % 38.6 % 41.5 % 36.4 % Total gross margin 39.6 % 39.0 % 36.5 % 35.7 % Operating income: The Children’s Place U.S. (2) $ 46,119 $ 43,147 $ 45,355 $ 48,162 The Children’s Place International 11,528 12,656 15,378 11,227 Total operating income $ 57,647 $ 55,803 $ 60,733 $ 59,389 Operating income as a percent of net sales: The Children’s Place U.S. 11.5 % 10.3 % 4.2 % 4.3 % The Children’s Place International 20.7 % 18.5 % 10.4 % 6.6 % Total operating income 12.6 % 11.5 % 4.9 % 4.6 % Depreciation and amortization: The Children’s Place U.S. $ 14,517 $ 13,135 $ 40,986 $ 38,902 The Children’s Place International 1,619 2,033 4,796 6,050 Total depreciation and amortization $ 16,136 $ 15,168 $ 45,782 $ 44,952 Capital expenditures: The Children’s Place U.S. $ 13,716 $ 13,367 $ 33,163 $ 41,583 The Children’s Place International 104 495 806 3,054 Total capital expenditures $ 13,820 $ 13,862 $ 33,969 $ 44,637 ____________________________________________ (1) Net sales from The Children's Place International are primarily derived from revenues from Canadian operations. (2) Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations of approximately $1.1 million for the Third Quarter 2015 . Includes costs incurred related to a class action wage and hour legal settlement, proxy contest costs, a sales tax audit, asset impairment charges and costs arising out of the restructuring of certain store and corporate operations of approximately $15.6 million during Year-To-Date 2015 . Includes costs incurred related to asset impairment charges and costs arising out of the restructuring of certain store and corporate operations, of approximately $4.1 million and $9.7 million for Third Quarter 2014 and the Year-To-Date 2014 , respectively. October 31, 2015 January 31, 2015 November 1, 2014 Total assets: The Children’s Place U.S. $ 828,582 $ 805,462 $ 842,823 The Children’s Place International 148,776 153,156 152,598 Total assets $ 977,358 $ 958,618 $ 995,421 |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Jan. 31, 2015 | |
Accounting Policies [Abstract] | |||||
Vesting period (in years) | 1 year | 3 years | |||
Deferred Compensation Plan | |||||
Maximum percentage of base salary elected to be deferred (as a percent) | 80.00% | ||||
Maximum percentage of bonus elected to be deferred (as a percent) | 100.00% | ||||
Maximum period over which annual installments of deferred payments are made (in years) | 15 years 12 days | ||||
Deferred compensation plan liability | $ 700 | $ 500 | $ 700 | $ 500 | $ 500 |
Cash Surrender Value of Life Insurance | 300 | 300 | |||
Deferred compensation - Company stock | (1,877) | (2,123) | (1,877) | (2,123) | $ (1,682) |
Business Exit Costs | $ 14 | $ (286) | $ 87 | $ (153) |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Jan. 31, 2015 | |
Accounts Payable and Accrued Liabilities, Current | $ 110,474 | $ 123,062 | $ 110,474 | $ 123,062 | $ 118,724 |
Business Exit Costs | 14 | (286) | $ 87 | (153) | |
Deferred Compensation Arrangements Maximum Percentage of Base Salary | 80.00% | ||||
Deferred Compensation Arrangements Maximum Percentage of Bonus | 100.00% | ||||
Deferred Compensation Arrangement with Individual, Maximum Contractual Term | 15 years 12 days | ||||
Deferred Compensation Cash-based Arrangements, Liability, Current and Noncurrent | 700 | 500 | $ 700 | 500 | 500 |
Deferred Compensation Plan Assets | 700 | 700 | |||
Cash Surrender Value of Life Insurance | 300 | 300 | |||
Other Liabilities, Noncurrent | 15,322 | $ 8,802 | 15,322 | $ 8,802 | 8,373 |
One-time Termination Benefits [Member] | |||||
accruedexitcostsadditions | 36 | 36 | 0 | ||
paymentsandreduction | (36) | (36) | |||
accruedexitcostsonetimebenefits | 0 | 0 | |||
Lease termination costs [Member] | |||||
Accounts Payable and Accrued Liabilities, Current | 600 | 600 | |||
accruedexitcostsadditions | 51 | 51 | 1,508 | ||
paymentsandreduction | (600) | (600) | |||
Capital Leases, Future Minimum Payments Due, Current | 959 | 959 | |||
Other Liabilities, Noncurrent | 400 | 400 | |||
totaladdsleasetermandonetimebenefits [Member] | |||||
accruedexitcostsadditions | 87 | 87 | $ 1,508 | ||
paymentsandreduction | (636) | (636) | |||
totalexitcostaccrual | $ 959 | $ 959 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | |||
Sep. 01, 2015 | Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Dec. 02, 2014 | Jan. 31, 2015 | |
STOCKHOLDERS' EQUITY | |||||||
Allocated Share-based Compensation Expense | $ 4,282 | $ 4,681 | $ 12,456 | $ 13,054 | |||
Number of shares exchanged in payment of withholding taxes (in shares) | 28,000 | 25,000 | |||||
Share-based compensation withholding tax payments | $ 1,798 | $ 1,257 | |||||
Treasury Stock, Shares, Acquired | 3,000 | 11,000 | |||||
Treasury Stock, Value, Acquired, Cost Method | $ 195 | $ 548 | |||||
Treasury Stock, Shares | 38,000 | 44,000 | 38,000 | 44,000 | 35,000 | ||
Treasury Stock, Value | $ 1,877 | $ 2,123 | $ 1,877 | $ 2,123 | $ 1,682 | ||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | $ 0.1325 | $ 0.45 | $ 0.3975 | |||
2015 Share Repurchase Program [Member] [Domain] [Domain] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Stock Repurchased and Retired During Period, Shares | 662,000 | ||||||
Stock Repurchased and Retired During Period, Value | $ 41,026 | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 59,000 | $ 59,000 | |||||
2012 Share Repurchase Program [Member] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Stock Repurchased and Retired During Period, Shares | 0 | 282,000 | |||||
Stock Repurchased and Retired During Period, Value | $ 0 | $ 14,671 | |||||
2014 Share Repurchase Program [Member] [Member] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Stock Repurchased and Retired During Period, Shares | 640,000 | 896,000 | |||||
Stock Repurchased and Retired During Period, Value | $ 39,791 | $ 44,037 | |||||
Retained Earnings [Member] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Stock Repurchased and Retired During Period, Value | 67,700 | 47,400 | |||||
Dividends | 9,700 | 9,100 | |||||
Dividends, Common Stock, Cash | 9,200 | 8,700 | |||||
Dividendsunvestedshares | 500 | 400 | |||||
Dividends [Domain] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | ||||||
2015 Share Repurchase Program [Member] [Domain] [Domain] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Stock Repurchased and Retired During Period, Shares | 100,000 | ||||||
Stock Repurchased and Retired During Period, Value | $ 7,500 | $ 48,500 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
STOCKHOLDERS' EQUITY | |||||||
Allocated Share-based Compensation Expense | 2,429 | $ 2,856 | 8,123 | 8,615 | |||
Performance Awards Member | |||||||
STOCKHOLDERS' EQUITY | |||||||
Allocated Share-based Compensation Expense | $ 1,853 | $ 1,825 | $ 4,333 | $ 4,439 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Jan. 31, 2015 | |
Stock-based compensation expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | 3 years | |||
Total stock- based compensation expense | $ 4,282 | $ 4,681 | $ 12,456 | $ 13,054 | |
Tax benefit related to stock-based compensation | 4,800 | 5,100 | |||
Cost of goods sold | |||||
Stock-based compensation expense | |||||
Total stock- based compensation expense | 900 | 1,000 | $ 2,300 | 2,500 | |
Performance Awards Member | |||||
Stock-based compensation expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 7 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 15,100 | $ 15,100 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 386 | 386 | 345 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 61.45 | $ 61.45 | $ 50.18 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 52.33 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 2 years 2 months 12 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 195 | ||||
Total stock- based compensation expense | $ 1,853 | $ 1,825 | $ 4,333 | $ 4,439 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 70.91 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 147 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 48.02 | ||||
Deferred and Restricted Stock (Deferred Awards) Member | |||||
Stock-based compensation expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 20 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 17,900 | $ 17,900 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 519 | 519 | 592 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 54.71 | $ 54.71 | $ 49.02 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 54.53 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 2 years 1 month 12 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 184 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 65.55 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 237 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 48.91 |
STOCK-BASED COMPENSATION (Det32
STOCK-BASED COMPENSATION (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Feb. 01, 2014 | |
Stock-based compensation | |||||
Allocated Share-based Compensation Expense | $ 4,282 | $ 4,681 | $ 12,456 | $ 13,054 | |
Vesting period (in years) | 1 year | 3 years | |||
Cost of Sales [Member] | |||||
Stock-based compensation | |||||
Allocated Share-based Compensation Expense | $ 900 | 1,000 | $ 2,300 | $ 2,500 | |
Employee Stock Option [Member] | |||||
Number of Options | |||||
Options outstanding at the beginning of the period (in shares) | 30 | ||||
Exercised (in shares) | (15) | ||||
Options exercisable (in shares) | 15 | 15 | |||
Weighted Average Exercise Price | |||||
Options outstanding at the beginning of the period (in dollars per share) | $ 29.05 | ||||
Exercised (in dollars per share) | 29.05 | ||||
Options outstanding at the end of the period (in dollars per share) | $ 29.05 | $ 29.05 | |||
Weighted Average Remaining Contractual Life (in years) | |||||
Options outstanding at the beginning of the period (in years) | 2 years 6 months 12 days | 3 years 3 months 12 days | |||
Options outstanding at the end of the period (in years) | 2 years 6 months 12 days | 3 years 3 months 12 days | |||
Aggregate Intrinsic Value | |||||
Options outstanding at the beginning of the period (in dollars) | $ 927 | ||||
Exercised (in dollars) | 455 | ||||
Options outstanding at the end of the period (in dollars) | $ 369 | 369 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Stock-based compensation | |||||
Allocated Share-based Compensation Expense | 2,429 | 2,856 | 8,123 | 8,615 | |
Performance Awards Member | |||||
Stock-based compensation | |||||
Allocated Share-based Compensation Expense | $ 1,853 | $ 1,825 | $ 4,333 | $ 4,439 | |
Percentage of Target Shares paid out if final operating income below threshold (as a percent) | 100.00% | ||||
Unvested awards at the beginning of the period (in shares) | 345 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 195 | ||||
Vested (in shares) | (147) | ||||
Forfeited (in shares) | (7) | ||||
Unvested awards at the end of the period (in shares) | 386 | 386 | |||
Weighted Average Grant Date Fair Value | |||||
Unvested awards at the beginning of the period (in dollars per share) | $ 50.18 | ||||
Granted (in shares) | 70.91 | ||||
Vested (in dollars per share) | 48.02 | ||||
Forfeited (in dollars per share) | 52.33 | ||||
Unvested awards at the end of the period (in dollars per share) | $ 61.45 | $ 61.45 | |||
Unrecognized costs and period of recognition | |||||
Unrecognized stock-based compensation expense (in dollars) | $ 15,100 | $ 15,100 | |||
Weighted average period for recognition of unrecognized stock-based compensation expense (in years) | 2 years 2 months 12 days |
NET INCOME (LOSS) PER COMMON 33
NET INCOME (LOSS) PER COMMON SHARE (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Basic and diluted net income per common share | ||||
Net income | $ 38,495 | $ 36,942 | $ 40,411 | $ 39,851 |
Basic weighted average common shares (in shares) | 20,297 | 21,541 | 20,628 | 21,843 |
Dilutive effect of stock awards (in shares) | 220 | 215 | 250 | 219 |
Diluted weighted average common shares (in shares) | 20,517 | 21,756 | 20,878 | 22,062 |
Antidilutive stock awards (in shares) | 1 | 2 | 1 | 1 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015USD ($) | Nov. 01, 2014USD ($) | Oct. 31, 2015USD ($) | Nov. 01, 2014USD ($) | Jan. 31, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
netbookvalue | $ 118,800 | $ 142,900 | $ 118,800 | $ 142,900 | |
Impairment of Long-Lived Assets Held-for-use | $ 919 | $ 3,306 | $ 2,371 | $ 6,351 | |
Number of Underperforming Stores | 15 | 15 | 22 | 45 | |
netbookvauepartiallyimpairedstores | $ 2,400 | $ 2,400 | |||
Property and equipment, gross | 828,654 | $ 808,625 | 828,654 | $ 808,625 | $ 803,399 |
Less accumulated depreciation and amortization | (526,438) | (489,754) | (526,438) | (489,754) | (493,098) |
Property and equipment, net | 302,216 | 318,871 | 302,216 | 318,871 | 310,301 |
Property and equipment, outstanding | 4,300 | 14,300 | 6,600 | ||
Land and land improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 3,403 | 3,403 | $ 3,403 | 3,403 | 3,403 |
Building and improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and Equipment, Useful Life (in years) | 20-25 yrs | ||||
Property and equipment, gross | 35,548 | 35,548 | $ 35,548 | 35,548 | 35,548 |
Material handling equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and Equipment, Useful Life (in years) | 10-15 yrs | ||||
Property and equipment, gross | 48,345 | 48,479 | $ 48,345 | 48,479 | 48,479 |
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and Equipment, Useful Life (in years) | 3-15 yrs | ||||
Property and equipment, gross | 333,602 | 348,466 | $ 333,602 | 348,466 | 339,474 |
Store fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and Equipment, Useful Life (in years) | 3-10 yrs | ||||
Property and equipment, gross | 231,090 | 236,342 | $ 231,090 | 236,342 | 231,797 |
Capitalized software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and Equipment, Useful Life (in years) | 3-10 yrs | ||||
Property and equipment, gross | 170,364 | 116,426 | $ 170,364 | 116,426 | 120,054 |
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 6,302 | $ 19,961 | $ 6,302 | $ 19,961 | $ 24,644 |
Number of stores tested for impairment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of Stores | 1,059 | 1,017 | 1,059 | 1,017 |
CREDIT FACILITY (Details)
CREDIT FACILITY (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Feb. 02, 2013 | Jan. 31, 2015 | |
Credit facilities | ||||
Sublimit Availability | $ 42,900,000 | $ 40,800,000 | $ 40,900,000 | |
Deferred financing costs gross | 300,000 | |||
Line of credit facility, maximum borrowing capacity | 250,000,000 | 200,000,000 | 200,000,000 | |
Line of credit facility, current borrowing capacity | 250,000,000 | 200,000,000 | 183,200,000 | |
Outstanding borrowings | 34,400,000 | 19,100,000 | 0 | |
Utilization of credit facility at end of period | 41,500,000 | 28,300,000 | 9,100,000 | |
Availability | $ 208,500,000 | $ 171,700,000 | $ 174,100,000 | |
Interest rate at end of period (as a percent) | 2.30% | 2.10% | 3.80% | |
Average loan balance during the period | $ 0 | $ 0 | $ 0 | |
Highest end of day loan balance during the period | $ 67,500 | $ 0 | $ 0 | |
Average interest rate (as a percent) | 2.70% | 3.30% | 3.20% | |
Merchandise Letters of Credit | ||||
Credit facilities | ||||
Letters of credit outstanding | $ 0 | $ 100,000 | $ 0 | |
Standby Letters of Credit | ||||
Credit facilities | ||||
Letters of credit outstanding | 7,100,000 | $ 9,100,000 | $ 9,100,000 | |
Credit Agreement | ||||
Credit facilities | ||||
Letters of Credit sublimit | 50,000,000 | |||
Borrowing capacity, accordion feature | $ 50,000,000 | |||
Line of credit facility, unused line fee percentage (as a percent) | 0.25% | |||
Deferred financing costs gross | $ 4,300,000 | |||
Deferred financing costs, remaining unamortized balance | 1,300,000 | |||
Line of credit facility, maximum borrowing capacity | $ 250,000,000 | |||
Credit Agreement | Prime rate | ||||
Credit facilities | ||||
Basis spread on variable rate, low end of range (as a percent) | 0.50% | |||
Basis spread on variable rate, high end of range (as a percent) | 0.75% | |||
Credit Agreement | LIBOR | ||||
Credit facilities | ||||
Basis spread on variable rate, low end of range (as a percent) | 1.25% | |||
Basis spread on variable rate, high end of range (as a percent) | 1.50% | |||
Debt Instrument, Description of Variable Rate Basis | one, two, three or six | |||
Credit Agreement | Merchandise Letters of Credit | ||||
Credit facilities | ||||
Letters of credit facility fee, low end of range (as a percent) | 0.625% | |||
Letters of credit facility fee, high end of range (as a percent) | 0.75% | |||
Credit Agreement | Standby Letters of Credit | ||||
Credit facilities | ||||
Letters of credit facility fee, low end of range (as a percent) | 0.75% | |||
Letters of credit facility fee, high end of range (as a percent) | 1.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate from continuing operations (as a percent) | 32.90% | 33.70% | 32.80% | 32.80% |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Derivative Asset, Notional Amount | $ 20,700 | $ 20,700 | ||
Derivative Asset, Fair Value, Gross Asset | 300 | 300 | ||
Derivative Liability, Fair Value, Gross Asset | 100 | 100 | ||
Gain (Loss) from Components Excluded from Assessment of Cash Flow Hedge Effectiveness, Net | 200 | |||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | $ (134) | $ 0 | $ 95 | $ 0 |
INTEREST INCOME (EXPENSE), NE38
INTEREST INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | |
Components of interest income (expense), net | ||||
Interest income | $ 218 | $ 268 | $ 736 | $ 851 |
Less: | ||||
Interest expense - credit facilities | 16 | 23 | 55 | 75 |
Unused line fee | 121 | 104 | 317 | 328 |
Amortization of deferred financing costs | 74 | 88 | 250 | 264 |
Other interest and fees | 29 | 30 | 49 | 73 |
Total interest expense | 472 | 350 | 1,371 | 974 |
Interest (expense), net | (254) | (82) | (635) | (123) |
interestrevolvingloan [Member] | ||||
Less: | ||||
Interest expense - credit facilities | $ 232 | $ 105 | $ 700 | $ 234 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015USD ($) | Nov. 01, 2014USD ($) | Oct. 31, 2015USD ($) | Nov. 01, 2014USD ($) | Jan. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||
Percentage of entity-wide sales qualifying purchaser as major customer (as a percent) | 10.00% | ||||
Segment information | |||||
Business Exit Costs | $ 14 | $ (286) | $ 87 | $ (153) | |
Restructuring Charges | 1,100 | 4,100 | 15,600 | 9,700 | |
Net sales: | |||||
Total net sales | 455,913 | 487,304 | 1,227,233 | 1,282,081 | |
Gross Profit: | |||||
Total gross profit | $ 180,513 | $ 190,111 | $ 447,626 | $ 457,490 | |
Gross Margin: | |||||
Total Gross Margin (as a percent) | 39.60% | 39.00% | 36.50% | 35.70% | |
Operating income (loss): | |||||
Total operating income (loss) | $ 57,647 | $ 55,803 | $ 60,733 | $ 59,389 | |
Operating income (loss) as a percent of net sales: | |||||
Total operating income (loss) (as a percent) | 12.60% | 11.50% | 4.90% | 4.60% | |
Depreciation and amortization: | |||||
Total depreciation and amortization | $ 16,136 | $ 15,168 | $ 45,782 | $ 44,952 | |
Capital expenditures: | |||||
Total capital expenditures | 13,820 | 13,862 | 33,969 | 44,637 | |
Total assets: | |||||
Total assets | 977,358 | 995,421 | 977,358 | 995,421 | $ 958,618 |
Impairment of Long-Lived Assets Held-for-use | 919 | 3,306 | 2,371 | 6,351 | |
The Childrens Place US [Member] | |||||
Net sales: | |||||
Total net sales | 400,184 | 418,863 | 1,079,541 | 1,112,933 | |
Gross Profit: | |||||
Total gross profit | $ 154,251 | $ 163,713 | $ 386,375 | $ 395,858 | |
Gross Margin: | |||||
Total Gross Margin (as a percent) | 38.50% | 39.10% | 35.80% | 35.60% | |
Operating income (loss): | |||||
Total operating income (loss) | $ 46,119 | $ 43,147 | $ 45,355 | $ 48,162 | |
Operating income (loss) as a percent of net sales: | |||||
Total operating income (loss) (as a percent) | 11.50% | 10.30% | 4.20% | 4.30% | |
Depreciation and amortization: | |||||
Total depreciation and amortization | $ 14,517 | $ 13,135 | $ 40,986 | $ 38,902 | |
Capital expenditures: | |||||
Total capital expenditures | 13,716 | 13,367 | 33,163 | 41,583 | |
Total assets: | |||||
Total assets | $ 828,582 | $ 842,823 | $ 828,582 | $ 842,823 | 805,462 |
Number of Stores | 952 | 982 | 952 | 982 | |
The Children's Place Canada [Member] | |||||
Net sales: | |||||
Total net sales | $ 55,729 | $ 68,441 | $ 147,692 | $ 169,148 | |
Gross Profit: | |||||
Total gross profit | $ 26,262 | $ 26,398 | $ 61,251 | $ 61,632 | |
Gross Margin: | |||||
Total Gross Margin (as a percent) | 47.10% | 38.60% | 41.50% | 36.40% | |
Operating income (loss): | |||||
Total operating income (loss) | $ 11,528 | $ 12,656 | $ 15,378 | $ 11,227 | |
Operating income (loss) as a percent of net sales: | |||||
Total operating income (loss) (as a percent) | 20.70% | 18.50% | 10.40% | 6.60% | |
Depreciation and amortization: | |||||
Total depreciation and amortization | $ 1,619 | $ 2,033 | $ 4,796 | $ 6,050 | |
Capital expenditures: | |||||
Total capital expenditures | 104 | 495 | 806 | 3,054 | |
Total assets: | |||||
Total assets | $ 148,776 | $ 152,598 | $ 148,776 | $ 152,598 | $ 153,156 |
Number of Stores | 133 | 135 | 133 | 135 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||
Sep. 01, 2015 | Oct. 31, 2015 | Nov. 01, 2014 | Oct. 31, 2015 | Nov. 01, 2014 | Dec. 02, 2014 | |
Subsequent Events | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.15 | $ 0.1325 | $ 0.45 | $ 0.3975 | ||
2015 Share Repurchase Program [Member] [Domain] [Domain] | ||||||
Subsequent Events | ||||||
Number of additional shares repurchased (in shares) | 0.1 | |||||
Value of shares repurchased | $ 7.5 | $ 48.5 |