Childrens Place Inc (NASDAQ: PLCE) tumbled Thursday after the company reported Q3 results and lowered its FY18 forecast.
Net sales increased by $32.5 million, or 6.6%, to $522.5 million during the third quarter 2018 from $490.0 million during the third quarter 2017.
This increase was primarily driven by a positive comparable retail sales increase of 9.5% and approximately $5.0 million due to the new revenue recognition rules, partially offset by an approximately a $14.0 million adverse impact from the calendar shift related to the 53rd week in fiscal 2017.
Net income was $49.9 million, or $3.03 per diluted share, in the third quarter of 2018, compared to net income of $44.1 million, or $2.44 per diluted share, the previous year.
Adjusted net income was $50.7 million, or $3.07 per diluted share, compared to adjusted net income of $46.7 million, or $2.58 per diluted share, in the third quarter last year. Return on invested capital improved approximately 320 basis points to 22.8% in the quarter.
CEO Jane Elfers said, "Moving on to Q4, due to stronger than anticipated digital demand in the back-half of 2018, we were forced to accelerate online access to our brick-and-mortar inventory and our ship from store fulfillment capabilities, resulting in an anticipated incremental fulfillment cost of $5 million, or $0.24 in EPS in Q4.
"These capabilities allow our digital customers to access our brick-and-mortar inventory, which helped fuel high-teens growth in our digital channels over the extended Thanksgiving holiday weekend."
Shares withered $19.88, or 16.1%, to $103.27
