The Children's Place, Inc. (NASDAQ:PLCE) Q2 2020 Earnings Conference Call - Final Transcript
Aug 25, 2020 • 08:00 am ET
Ladies and gentlemen, thank you for standing by and welcome to The Children's Place Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]
It is now my pleasure to turn the floor over to Anthony Attardo, Director of Investor Relations to begin.
Good morning and welcome to Children's Places conference call. On the call today are Jane Elfers, President and Chief Executive Officer; and Mike Scarpa, Chief Operating Officer and Chief Financial Officer.
The Children's Place issued press releases early this morning and copies of the releases and presentation materials for today's call have been posted on the Investor Relations section of the company's website. After the speaker's remarks, there will be a question-and-answer session.
Before we begin, I would like to remind participants that any forward-looking statements made today are subject to the safe harbor statement found in this morning's press release as well as in the company's SEC filings, including the Risk Factors section of the company's annual report on Form 10-K for its most recent fiscal year. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. The company undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof.
After the prepared remarks, we will open the call to your questions. We ask that each of you limit yourself to one question, so that everyone will have an opportunity.
And with that, I'd like to turn the call over to Jane Elfers.
Thank you, Anthony, and good morning everyone. We generated a 118% increase in our digital channel in Q2. We have clearly benefited from our digital transformation investments, which provided us with the omni-channel capabilities necessary to fulfill our strong online demand. Increased digital adoption accelerated by COVID-19 continues to drive online sales to an increasingly greater share of our overall sales, representing a long-term market share opportunity.
Importantly, our digital growth came from both existing and new customers. Since March, we have increased new customers to our digital file by approximately 175%, converted our store-only customers to omni-channel customers at a rate approximately 3 times the pre-pandemic rate and increased our app downloads by 115%. And according to NPD data through June, we were the only pure-play children's retailer to gain market share year-to-date.
With respect to inventory the teams did a great job selling through our spring and summer product and we are entering Q3 seasonal carryover inventory down approximately 50%. Importantly, we have zero pack and hold on our balance sheet or sitting in overseas factories, which allows us to continue to take full advantage of what we believe will be a favorable AUC environment in 2021.
With respect to fleet optimization, the next phase of our fleet optimization initiative leverages our lease flexibility to accelerate store closings. We are targeting 300 store closures through the end of fiscal 2021, with 200 in fiscal 2020, inclusive of