This summary is based on the first quarter fiscal 2008 earnings call conducted by The Children’s Place Retail Stores, Inc. (PLCE: chart) on May 22, 2008.

Management:

Interim Chief Executive Officer: Chuck Crovitz
Executive Vice President, Finance and Administration: Susan Riley
Senior Vice President, Planning, Allocation and IT: Richard Flaks
Senior Vice President, Chief Financial Officer: Richard Paradise
Group Vice President, Merchandising: Dina Sweeney
Investor Relations: Heather Anthony

Key Investors Issues

- EPS were 67 cents per share compared to 49 cents per share last year.
- Net income rose to $19.5 million from $14.7 million a year earlier.
- Net sales rose 12% to $400.2 million.

First Quarter Highlights

Net sales from The Children''s Place business increased 12% to $400.2 million from $356 million last year.

- Contributing to sales growth was a 70% increase in eCommerce sales.
- Comparable store sales for The Children''s Place business increased 5% on top of last year’s 2% increase. 5% comparison was comprised of an approximate 3% increase in comparable store sales transactions reflecting modest increases in conversion in traffic and an approximate 2% increase in average transaction size.

A mid single-digit increase in units per transaction offset a low single-digit decrease in AUR.

- All regions comped positively with the exception of the Southeast and Canada, which comped in the negative low single-digits.
- Gross profit dollars increased 13% to $171.1 million. Gross margin increased 10 basis points to 42.8%. Lower mark downs, production and design costs and occupancy as a percentage of sales were partially offset by higher distribution costs as the company has not yet anniversaried Southeast distribution center and lower initial mark ups.

SG&A as a percentage of sales was 29.8% representing 40 basis points of leverage.

- Contributing to the leverage were lower payroll and benefits expense, lower store opening expense reflecting fewer openings versus last year and lower marketing expense all as a percentage of sales. Partially offsetting the leverage were store related expenses and supplies, higher legal and professional fees and unfavorable foreign exchange given the strength of the Canadian dollar all as a percentage of sales.
- Excluding the professional fees deemed to be unusual or one-time in nature from both periods SG&A leveraged approximately 50 basis points.

- Depreciation and amortization expense as a percentage of sales was 4.4%, up 30 basis points from last year reflecting increased depreciation from store base as well as from new Southeast distribution center.
- Income from continuing operations before interest and taxes was $34 million, a 15% increase over last year or 8.5% of sales up 20 basis points from last year.
- Interest expense was $500,000 compared to interest income of $1 million last year since the company carried debt all quarter this year.

- Effective tax rate was 42% compared to 38% last year as the company is no longer permanently invested in Asian subsidiary. The company expects the full year tax rate to be approximately 45%.
- Income from continuing operations was $19.4 million compared to $19.1 million last year.
- The company delivered income from continuing operations of 66 cents per share compared with 64 cents per share last year.
- Shares outstanding were 29.3 million compared to 30 million last year.

Cash balance was $118.3 million and outstanding borrowings on credit facility totaled $27.9 million for a net cash position of $90.4 million.

Net cash position reflects stronger than expected business performance and a pay out of approximately 2/3 of the cash costs associated with the Disney Store exit which came in at the low end of range. Coupled with the timing of certain items including the pay out of May rent checks, an income tax refund and the deferral of capital spending. Operating income was up 15% and operating margin increased 20 basis points to 8.5%.

Total inventory at cost was up 12% or 6% on a per square foot basis, somewhat higher than estimate reflecting higher merchandise in transit.

- Carry over inventory was 9% of total inventory versus 5% last year. The company expects to end the second quarter with inventory per square foot down in the high single to low double-digits.
- The company opened three Children''s Place stores and closed one. As of May 3, 2008 the company operated a total of 906 Children''s Place stores and approximately 4,288,000 square feet. The company continues to anticipate opening approximately 30 new stores in 2008 the majority of which will be in the third quarter.

- The company began experiencing increased consumer acceptance of product in Holiday which continued in the first quarter particularly with Easter, dressy and summer. Improved merchandise and value proposition are enabling the company to take market share. Particularly as consumer behavior, the company believes, is shifting towards value. According to NPD market share increased 30 basis points to 4.2% during the first calendar quarter of 2008 versus last year.

Key questions from the first quarter earnings call conducted by The Children’s Place Retail Stores, Inc. on May 22, 2008.