The Children's Place, Inc. (NASDAQ:PLCE) Q1 2019 Earnings Conference Call Transcript
May 15, 2019 • 08:00 am ET
Thank you. (Operator Instructions) Our first question comes from the line of Dana Telsey of Telsey Advisory Group.
Good morning, everyone and congratulations on the nice progress.
As you think about the top line in the ability to take market share from the Gymboree closures, it certainly seems like the Tiny Collection performed well. How much of an AUR lift is it? What is the contribute to gross margin and how do you see that share gain in sales developing through the year? Thank you.
Sure. Thanks, Dana. As far as Tiny Collections is concerned, we launched it, the day after Easter and what we had said is, when we saw the Gymboree line back in July, Jennifer, our Head of Design and I sat down and really saw that as an opportunity to fill a void way before we obviously knew that Gymboree was going to go out completely or that, we would end up buying their IP. So that product came in, it's really, in keeping with the Gymboree strategy, we kind of call it bow-to-toe and the product has really been terrific.
If you look at the IR deck and you look at the comments we put out there. We did not see anything in our advertising or our marketing as far as relating that product to Gymboree, but mom has obviously done that on her own several comments on our Facebook page saying, oh, this is just like Gymboree. Thank you so much. I didn't know where I was going to shop. Now I have a place to shop. So we feel really good about that, particularly, since we will be re-branding Tiny Collections into Gymboree in early 2020.
I don't think, we're going to say, what percentage it is running over our typical TCP branded AUR, but it is significantly higher. And it's in line with what we're thinking that Gymboree merchandise is going to be selling at not only ticketed but where we see that AUR coming in. So we feel really good. We said, it's early days, but we feel really good about the fact that we have permission, If you will, to sell product at a higher ticket and particularly product that's not even branded with the Gymboree label yet.
Your next question comes from the line of Adrienne Yih of Wolfe Research.
Good morning, congratulations. Well done.
You're welcome. Jane, can you discuss, so for me the surprise was sort of the, what we were seeing during the quarter, which was better sell through. Can you discuss the positive merchandise margins that were initially expected to be down because of the pressure and how aggressive can you be on the recapture like, how do you test the ceiling of that kind of, what is going to clear with that category of the products should clear at? And then Mike, can you just help me out with the SG&A? Should we expect that -- and I'll call like $5