This summary is based on the fourth quarter fiscal 2007 earnings call conducted by The Children’s Place Retail Stores, Inc. (PLCE: chart) on March 19, 2008.

Management:

Executive Vice President of Finance & Administration: Susan Riley
Senior Vice President of Planning, Allocation & Information Technology: Richard Flaks
Interim Chief Executive Officer: Charles Crovitz

Key Investors Issues

- EPS loss was $2.01 per share compared to a profit of $1.48 per share last year.
- Net loss was $58.5 million compared to a net profit of $44.7 million a year earlier.
- Consolidated net sales increased 4% to $670.9 million compared to $645.2 million for the fourteen-weeks ended February 3, 2007.

Fourth Quarter Highlights

Consolidated net sales increased 4% to $670.9 million compared to $645.2 million for the fourteen-weeks ended February 3, 2007.

- Sales were comprised of $443.4 million from The Children''s Place brand, a 6% increase over last year, and $227.5 million from Disney Store, flat to last year.
- Consolidated comparable store sales increased 3%. The Children''s Place brand''s comparable store sales increased 7% on top of last year''s 2% increase. Disney Store''s comparable store sales decreased 4% versus last year''s 14% increase.
- Net loss was $58.5 million, or $2.01 per share for the thirteen-week period compared to net income of $44.7 million, or $1.48 per share in the fourteen-week period last year. Last’s extra fiscal week generated $29.5 million in sales, and earnings per share of 4 cents.

Included in the fourth quarter 2007 net loss are certain items including:

- Approximately $95.1 million, pre-tax, in asset impairment charges, including $80.3 million in impairments related to the decision to exit the DSNA business; $14.8 million in impairments related to the decision to cease construction of the building the company had planned to use as its corporate headquarters
- Approximately $12 million, pre-tax, in other costs, which comprised $6.1 million in costs associated primarily with the cancellation of the Disney Store remodeling program and $5.9 million in lease exit costs related to the company''s decision not to move forward with the building it had planned to use as its corporate headquarters.

- $6.1 million in tax provisions related to the company''s decision to repatriate a portion of retained earnings of its overseas subsidiaries. As part of the decision to exit the DSNA business, the company repatriated approximately $45 million of its foreign earnings in order meet obligations pertaining to its Disney Store subsidiaries.
- $4.8 million, pre-tax, in accelerated depreciation and Disney Store refresh expense
- $3.6 million, pre-tax, in wrap-up fees and tender offer resulting from the company''s 2006 stock option investigation and the filing of its delinquent financial reports and other audit fees
- $2 million, pre-tax, in costs associated with the company''s strategic review process.
- $0.7 million, pre-tax, in executive severance

Excluding these items, net income was $20.5 million.

- Net income excluding these items is a non-GAAP measure. The company believes the excluded items are not indicative of the performance of its core business and that by providing this supplemental disclosure to investors it may facilitate comparisons of its past and future performance. For a reconciliation of net loss as reported to adjusted net income please see the attached table.
- Basic shares outstanding in the fourth quarter were 29.1 million. Had the company generated income in the fourth quarter, shares outstanding would have been approximately 29.3 million.
The company opened seven Children''s Place stores and closed ten. In addition, the company opened fifteen Disney Stores and closed eight.

The company has decided to exit the Disney Store North America business after a thorough review of the operation, its potential for earnings growth, its capital needs and its ability to fund such needs from its own resources.

- The DSNA business is conducted by the company''s subsidiaries Hoop Holdings LLC and Hoop Holding Canada, Inc. under a license from The Walt Disney Company.
- The company and Hoop are actively pursuing alternatives for immediately implementing the exit from the DSNA business. These include a possible disposition by Hoop of a substantial portion of the business or other means to terminate its operations. The company and Hoop are in an advanced phase of discussions with The Walt Disney Company regarding the terms under which Disney might regain ownership and control of approximately two-thirds of the existing stores. Hoop and the company intend to disclose the arrangements for exiting the DSNA business in the very near term.

- In addition to costs that will be incurred by the Hoop subsidiaries in connection with exiting the DSNA business, at this time the company expects that it may incur pre-tax cash exit costs in the range of $50 million to $100 million, payable over a period of time. Reflecting its decision to exit the business, the company recognized a pre-tax asset impairment charge of $80.3 million in the fourth quarter of fiscal 2007.
- Unrelated to the company''s decision to exit the business, Hoop recently received notices of several material breaches under its license agreement with The Walt Disney Company. Hoop believes it has cured some of the asserted breaches and intends to cure or to assert defenses to other asserted breaches.

Consistent with its plans to exit the DSNA business and in connection with the review of its expense structure, the company is implementing a workforce reduction to enhance profitability.

- Specifically, the company plans to eliminate approximately 80 current positions from its shared services workforce which is on top of approximately 50 open positions the company has determined not to fill, for a combined reduction in size of approximately 30%. The company expects to realize annualized savings of approximately $12 million, pre-tax, which represented 11% of its fiscal 2007 shared services expense. The company expects to incur expenses in association with this workforce reduction of $1.5 million to $2 million, pre-tax, in the first quarter of fiscal 2008, primarily relating to severance costs.
- Beyond the workforce reduction, the company is committed to streamlining operations to generate efficiencies that are expected to benefit the company in future periods.

Reflecting the company''s planned exit of the DSNA business, coupled with capital expense reductions at its core Children''s Place brand, the company now anticipates spending $65 million to $75 million in fiscal 2008, more than 50% below its previously announced fiscal 2008 capital expenditure level of $150 million, and over 60% below its capital spending level of $200 million in fiscal 2007.

Of the anticipated spend, $55 million reflects new store openings, remodels and maintenance and approximately $15 million reflect information technology and other initiatives. The primary drivers of the company''s anticipated capital expenditure reduction are the decisions pertaining to exiting of the DSNA business and the company''s decision not to move forward with the build out of its new corporate headquarters.