Children's Place (NASDAQ: PLCE) reported Q1 EPS of $3.25, $3.19 better than the analyst estimate of $0.06. Revenue for the quarter came in at $435.48 million versus the consensus estimate of $354.78 million.

Jane Elfers, President and Chief Executive Officer announced, “We delivered outstanding first quarter results with gross margin, operating margin, and EPS all at record levels. Our Q1 2021 net sales of $435 million exceeded our pre-COVID Q1 2019 net sales of $412 million, despite having 261 or 27% fewer stores ending Q1 2021 versus Q1 2019.”

Ms. Elfers continued, “All key metrics across both our digital and stores channels exceeded expectations. Our top line results were driven by several factors, including double digit increases in AUR versus Q1 2020, resulting from strong product acceptance, higher price realization, reduced promotional activity, and unprecedented stimulus, as well as an acceleration in back-to-school sales, our ability to retain new digital customers we acquired during the pandemic, and a significant reactivation of store customers that we had temporarily lost during the government-mandated closure of all of our stores. Our record gross margin was driven by significantly higher merchandise margins versus Q1 2020 in both our digital and stores channels, significant occupancy savings from favorable lease negotiations and fewer stores, and meaningful e-commerce fulfillment optimization.”

Ms. Elfers continued, “We leveraged a very difficult period in 2020 to accelerate our strategic transformation and we are now well positioned for accelerated operating margin expansion in 2021 and beyond. The acceleration of our digital business, our highest operating margin channel, made possible by our pre-pandemic digital transformation investments, combined with the significant sales transfer rate we are achieving from our strategic decision to close 300, or a third, of our stores in less than 20 months, is resulting in an industry leading approximately 50% steady state annual digital penetration. Our long-standing fleet optimization strategy enables us to close the 300 stores, without financial penalty, and reset our occupancy costs. These occupancy cost reductions should continue to be a significant operating margin tailwind throughout 2021 and beyond. In addition, by aligning our overhead cost structure in 2020 to our digital first strategy, we have gained efficiencies and removed significant expense from our P&L, which will continue to benefit us in 2021 and beyond. We anticipate further operational efficiencies and sales opportunities when social distancing and other restrictions, such as limits on hours of operation, are further removed and we are able to return to normal operations in both our stores and distribution centers.”

Ms. Elfers concluded, “We are operating at a high level. We continue to navigate the extraordinary complexity of the pandemic while remaining firmly on offense. Our long-standing strategic plan has served us well. We are a stronger company today than we were prior to the pandemic and we look forward to continuing to deliver accelerated operating margin expansion for our shareholders in 2021 and beyond.”

Outlook

As a result of the continued volatility created by the COVID-19 pandemic, the Company is not providing EPS guidance.

For earnings history and earnings-related data on Children's Place (PLCE) click here.