For the first quarter The Children’s Place net sales fell 0.1 per cent. Comparable retail sales decreased 1.8 per cent. Adjusted operating income in the first quarter of 2018 was 5.8 per cent of net sales.

Gross margin rate in the quarter was also negatively impacted by the increase in penetration of the digital business to 26 per cent from 23 per cent last year. The company’s digital business operates at a lower gross margin rate due to higher fulfillment costs but is accretive to operating margin. The negative comp also resulted in deleverage of fixed expenses.

Gross margin rate was positively impacted by the reclassification of certain items due to the new revenue recognition rules.

The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America.

Adjusted operating income in the first quarter of 2018 was 5.8 per cent of net sales, deleveraging 530 basis points compared to last year. Adjusted tax rate was negative for the quarter versus positive 25.7 per cent last year, primarily due to the impact of the accounting rules related to the income tax impact on share base compensation and the impact of the lower corporate tax rate.

The company closed 12 stores and did not open any stores during the first quarter of 2018.