SECAUCUS, N.J.—Children's clothing retailer The Children's Place Retail Stores Inc. said Friday that its third-quarter net income rose 8 percent as shoppers snapped up its clothing offerings.
Results beat expectations, and the company raised earnings guidance. Shares rose $6.85, or 15.2 percent, to $51.85 in midday trading.
Clothing retailers are facing high costs for cotton and other raw materials. In a call with analysts, CEO Jane Elfers said the company was able to report positive revenue in stores open at least a year and expand its gross margin -- the amount of every dollar in revenue a company actually keeps -- "in spite of double-digit cost increases, a very promotional competitive environment, a hurricane and a damaging Halloween snowstorm."
Net income rose to $33.7 million, or $1.33 per share. That compares with $31.3 million or $1.15 per share, last year. Analysts predicted $1.23 per share, according to FactSet.
Revenue rose 7 percent to $484.1 million from $453.4 million last year. Analysts expected revenue of $477.3 million.
Revenue in stores open at least a year, a key retail metric, rose 0.9 percent in the quarter. The measure is considered a key gauge of a retailer's financial health because it excludes stores that open or close during the year.
The company now expects earnings of $3.24 to $3.29 per share for the year, compared with prior guidance of $3.13 to $3.25 per share. Analysts expect $3.22 per share.
It predicts fourth-quarter earnings of $1.19 to $1.24 per share. Analysts expect $1.23 per share.
The stock is down 9 percent for the year.