Bob Vill - Group VP, Finance Jane Elfers - President and CEO Mike Scarpa - COO and CFO.

Dorothy Lakner - Topeka Capital Markets Betty Chen - Mizuho Securities Susan Anderson - FBR Capital Markets Anna Andreeva - Oppenheimer Capital Lorraine Hutchinson - Bank of America Merrill Lynch Stephanie Wissink - Piper Jaffray Dana Telsey - Telsey Advisory Group John Morris - BMO Capital Markets Lee Giordano - CRT Capital Group Rick Patel - Stephens Jennifer Davis - Buckingham Research Group Jay Sole - Morgan Stanley Richard Jaffe - Stifel Nicolaus Marni Shapiro - The Retail Trackers.

It is now my pleasure to hand the call over to Bob Vill. Please go ahead..

Thanks, Tanesha. We apologize for the 15 minute delay in starting today’s call. Our conference call provider had some technical difficulties. We plan to end this call at about 9:00 AM, but thank you for joining us this morning.

With me here today are Jane Elfers, President and Chief Executive Officer; and Mike Scarpa, Chief Operating Officer and Chief Financial Officer. We issued a press release earlier today, announcing third quarter 2014 financial results. A copy of the release can be found on our Web site.

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 our SEC filings. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially.

The Company undertakes no obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date hereof. After the prepared remarks, we will open the call to questions. We ask that each of you limit yourself to one question so that everyone will have an opportunity.

I will turn the call over to Jane..

Thank you Bob, and good morning everyone. The quarter played out very much in line with what we outlined on the last call. We saw strong performance in August and September, our two critical back-to-school months. October results were hampered by the unseasonably warm weather, particularly in our Western zone.

In addition, October was negatively impacted by a challenging traffic and sales comparison versus last October due to the resolution of the government shutdown. Overall however, we’re very pleased with our positive comp performance and our strong August and September results.

Moving to the Q3 financials, Q3 sales of 487 million were 0.3% lower versus last year on a constant currency basis. Comp sales increased 0.2% for the quarter, our second consecutive quarter of positive comp. U.S. comp sales were up 0.8% in the quarter, Canada comp sales were down 3.8%. Adjusted EPS was a $1.82 the top-end of our guidance range.

Some key accomplishments during the quarter include, we opened 13 international stores including our first store in Panama. We ended the quarter with 67 stores and we remain on-track to end 2014 with 75 international franchise stores.

Our international business is gaining momentum in our current market, so we continue to pursue additional market opportunities. Progress continues on our seamless retail initiative in advance of the deployment of sophisticated assortment planning, allocation and replenishment tools.

We remain on-track targeting the back half of 2015 to start to see the results of these initiatives. On the digital front, the underpinning of our digital platform is the strategic segmentation of our customers.

This segmentation work is now complete and we’ve already started activating against these consumer insights in our holiday marketing campaign. We are piloting in-store and online enhancements to our myPLACE rewards program.

We’re also focused on improving organic and paid search capabilities to help us acquire new customers and drive incremental sales. And as part of our continuing commitment to return excess cash to shareholders, we paid a quarterly dividend and repurchased 356,000 shares returning a total of 21 million to shareholders in the third quarter.

Today we also announced our fourth quarter dividend. Year-to-date, we’ve returned more than 67 million in dividends and share repurchases as our strong cash flow allows us to return a significant amount of capital to our shareholders, while we continue to make strategic investments in our business.

On Q3 business trends, we delivered a consistent performance by region for August and September. However, the warm weather in October significantly impacted business in the West, leading to double-digit comp swings in October between our East and West zones.

On merchandise performance, our Newborn division comped positive high single-digits in Q3, the fourth straight quarter of positive comp as customers continue to respond to our new merchandizing initiative. The Big Kids business comped positive in Q3 and the Baby business was only slightly down.

The continued turnaround in our Baby business speaks to our sharpened merchandizing strategy, as we start to gain share back in this very important segment of our business. Accessories and Shoes were down low single-digits driven entirely by a miss in seasonal categories in the month of October.

On the talent front, we have some very exciting announcement. You may have seen our release this morning announcing the appointment of Anurup Pruthi as Senior Vice President and Chief Financial Officer reporting directly to Mike Scarpa.

Mike has spent the past two years building a very strong financial team and Anurup’s appointment represents an important next step in our transformation.

Anurup’s arrival frees Mike up to focus on further accelerating our key growth initiatives, including international and wholesale expansion, our seamless retail initiative, fleet rationalization opportunities and improve supply chain performance. Anurup’s a seasoned veteran and brings a wealth of relevant industry expertise.

Mike and Anurup have worked together previously and their extensive financial and operational background will add significant value to The Children’s Place for years to come. Anurup officially joins us on December 1st. In design, Jennifer Groves has joined as our new Creative Director reporting to me.

Jennifer has responsibility for design, as well as creative marketing. Jennifer has an extensive background in children’s design and has spent the past 20 years in design leadership position with world-class vertical retailers.

We are very fortunate to have someone of her caliber leading our creative effort and I’m looking forward to working closely with Jennifer to further enhance our product offerings. And in merchandizing, we promoted Brian Ferguson to SVP, Merchandizing. Brian has been with us for a little more than a year and he’s done a terrific job.

Brian has spent his entire career in vertical retailing and we’re confident in his ability to help us further advance our merchandizing strategies. Those of you who has followed us for the past several years, have seen the extensive talent upgrade that’s taken place at our Company.

We have a world-class specialty retail team in place and I want to thank them for what they’ve accomplished and for their laser-like focus executing on our multiple growth initiative.

Moving onto Q4, the promotional environment remains elevated, but our inventories are in excellent shape and our assortment is well positioned to compete effectively during this very important quarter. For the first two and a half weeks of November, we are off to a very strong start.

We’ve seen a significant uptick in sales and traffic quarter to-date. Now I’ll turn it over to Mike..

Thank you, Jane and good morning everyone. In the third quarter, we delivered a positive 0.2% comp, above our flat to negative low single-digit guidance. This positive comp performance combined with disciplined expense management enabled us to post adjusted earnings per share of $1.82 at the high-end of our guidance range.

Details for the third quarter are as follows, net sales were $487 million. The comparison to the third quarter of 2013 was negatively impacted by foreign exchange of $4 million. Comparable retail sales increased 0.2% compared to a negative point 7% comp last year.

The positive 0.2% comp for the quarter was the result of an increase in transactions, partially offset by a decline in average transaction value. E-commerce accounted for 16.4% of net sales in the quarter compared to 14.8% last year.

Adjusted gross margin rate for the quarter declined 220 basis points versus last year to 39% below our third quarter guidance of down 130 to 160 basis points.

Several factors played into this; one, the promotional environment was elevated putting significant pricing pressure on key commodity items like denim; two, unseasonably warm weather in October hampered sales so we made the decision to get our unit inventories in line for the quarter through price adjustments and promotional activity; three, lastly and most importantly early learnings from our new assortment planning tool indicate that going forward we have the opportunity to meaningfully our buys and increased flows of newness.

We therefore made the strategic decision to start to move our inventories in line ahead of these tools taking effect so that we can maximize our margin potential in the back half of 2015. Our unit buys for the balance of this year and the first half of next year are down, so we will naturally be in a better inventory position when the tools go live.

But we will continue to utilize these learnings ahead of back-to-school 2015 launch. Adjusted SG&A declined $8.2 million to 115 million and leveraged 140 basis points to 23.6% of sales, 60 basis points better than guidance. SG&A expenses were lower in both stores and corporate.

These savings were partially offset by training and cutover costs associated with our ongoing systems implementations. We recorded a non-GAAP charge of $4.3 million this quarter. The majority of which was related to impairment charges associated with our store rationalization program, along with severance cost associated with corporate restructuring.

Adjusted operating income deleveraged 50 basis points to 12.3% of sales. Adjusted income per share was a $1.82 compared to adjusted earnings per share of a $1.89 last year. The comparison to the third quarter of 2013 was negatively impacted by $0.05 due to foreign exchange.

Moving on to the balance sheet our cash and short-term investments at the end of the quarter were $210 million, compared to $194 million last year. We ended the third quarter with $19 million on our revolver.

During the last 12 months, the Company generated $143 million in operating cash flow, while investing $60 million in CapEx and returning $80 million to our shareholders in the form of stock buyback and dividends. Additionally, today our Board declared a quarterly dividend for Q4.

Balance sheet inventory at the end of the quarter was up $5 million versus last year about 1.6%. This number is significantly below our guidance of a mid single-digit increase. When you look at the complexion of our quarter ending inventory the picture gets even better.

Seasonal inventory is down $16 million versus last year, the cleanest it has been in the two years I have been with the Company.

As I mentioned this is the result of several factors, the biggest one being the decision to start to get ahead of the inventories prior to the launch of our inventory planning and allocation tools for the back half of next year.

Before I provide an update on our key strategic and operational initiatives, I wanted to let you know how thrilled I am to have Anurup Pruthi join The Children’s Place as Senior Vice President and Chief Financial Officer. I have known Anurup for over 10 years and have worked with him extensively for six of those years.

He will add significant value to our Company and through his extensive financial and operational expertise. His appointment puts the finishing touch on building a very strong financial organization.

As my time frees up on my finance responsibilities, I am looking forward to having the opportunity to increase my focus on accelerating our strategic initiatives. Now for an update on those initiatives; fleet optimization.

We remain on-track to close 125 underperforming stores through 2016, which includes the 41 stores we closed in 2013, along with approximately 35 stores we plan to close in 2014.

We are working with our consulting partners to understand customer shopping habits at the store level in order to draw further insights into what an ideal store portfolio should be in the long-term for the Children’s Place.

As I mentioned on previous calls, we are seeing a sales transfer rate in access of 20% to nearby stores or to e-com as a result of these store closures.

It is too early to make a call on ultimate fleet size, but suffice to say we continue to be very encouraged with our strategic of dramatically slowing down new store openings coupled with closing underperformers. On the international front we opened 13 stores in the third quarter and ended the quarter with 67 international franchise stores.

We remain on-track to end the year with 75 franchise stores. We are devoting resources to improve our systems capabilities with the goal to accelerate the international growth, not only through brick and mortar orders stores, but through international e-commerce abilities as well.

In our Wholesale business, we shipped product to four new accounts including a Web-based e-tailer in the third quarter. Overall, we remain optimistic these accounts we are developing in 2014 will serve as building blocks to grow this business overtime.

Systems transformation; with the foundation of SAP behind us we are now focused on deploying our inventory management tools. Assortment planning is a preseason planning tool, which leverages historic data by storing SKU to optimize our overall buys and better match breadth of assortment with depth of inventory.

We piloted this tool with our summer 2015 buy in outlets and we have realized a double-digit decline in plan receipts. We are in the process of rolling this tool off to our U.S. play stores in Canada and initial reads for back-to-school of 2015 in U.S. play stores, indicates a potential high single-digit reduction in the overall unit buy.

Buying inventory tighter requires a more sophisticated allocation and replenishment tool. And we are in the first phase of deploying a new allocation module that uses data and algorithms to forecast demand by store and ensure product flows match customer needs in each local market we serve.

We begin working with the system for the back-to-school 2015 season. We have also developed a structured and analytical approach to pricing which we expect will generate increased gross margin dollars while achieving inventory turn targets.

We began piloting these pricing analytics in the outlet channel in September and since launching the pilot we have seen a positive impact on key sales and gross margin metrics in this channel. The continued development of our digital capabilities will be critical to our success.

In addition to the upgrade of our Web platform and the launch of new mobile assets earlier this year, we have recently completed work on the strategic segmentation of our customers. We now have clear insights into who she is and how she behaves.

We are already utilizing this new information in our holiday email marketing campaign, thus specifically and more efficiently targeting our communications to the appropriate customer segment. And now I would like to move on to our guidance. Our fourth quarter guidance assumes positive low single-digit comparable retail sales.

As a result, we project fourth quarter adjusted net income per diluted share will be in the range of $0.83 to $0.93 compared to $0.96 in the fourth quarter of 2013. We expect to deleverage gross margin by 70 to 130 basis points in the fourth quarter. The bulk of this margin pressure is a result of a low single-digit average unit cost increase.

We expect SG&A as a percentage of sales will be relatively flat compared to last year and we expect inventory to be down mid single-digits at the end of the fourth quarter. We are confirming our fiscal 2014 guidance and expect adjusted net income for diluted share to be between $2.95 and $3.05, full year comp is now projected to be relatively flat.

This guidance excludes unusual costs or events that are reported in our non-GAAP adjustments. It also assumes that currency exchange rates will remain consistent with today’s rates, which is expected to negatively impact the adjusted net income per diluted share by approximately $0.02 in the fourth quarter and $0.09 for the year.

We expect depreciation expense to be flat in the fourth quarter. We expect our tax rate to be approximately 32.5% for the year.

We entered the fourth quarter with approximately $56 million remaining on our share repurchase authorization and we expect to continue to return capital to shareholders through both our dividend program, as well as through share repurchase. Our capital expenditures for the year are now expected to be between 75 million and 80 million.

At this point we’ll open your call to questions..

Tanesha we’ll take questions now please. .

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And our first question comes from Dorothy Lakner. Your line is open. Please go ahead..

Just kind of related to the inventory, I wondered if you could talk about what you are doing or how you are feeling in terms of what's going on, on the West Coast in the ports.

How you feel about spring deliveries; just what your thoughts are, what your strategies are relative to what's going on out there?.

Regarding the West Coast disruptions, our logistics team led by John Moroz made the strategic decision back in Q1 to route all of our goods to the East Coast as we anticipated potential disruption at the West Coast as the ILWU contract was due to expire at the end of June.

Other than the impact to our transits at the end of Q1 and Q2, which we called out in previous earnings calls, the routing of the goods to the East Coast and the hard work of our sourcing and logistics team have resulted in basically zero impact to-date from the West Coast disruption.

Our thoughts as we move forward is to continue to route our goods to the East Coast until we see a resolution happen..

And just in terms of the cost, is that -- obviously is there some cost differential that you are incurring that you might alleviate if that situation resolves itself?.

Basically, to-date we have incurred non-material increases..

Our next question comes from Betty Chen. Please go ahead, your line is open..

I was wondering, Mike, if you can talk a little bit more about the planning and allocation system. That seems to be allowing you to buy a little bit less next year.

Can you give us more color on how you are able to do that and any early quantification you may have on the gross margin benefit that we can see and whether that's going to materially help, is it Q3 or more Q4 of next year? Thanks..

Obviously putting SAP as the foundation in the second quarter has allowed us to begin to add these more sophisticated planning and allocation replenishment tools. Assortment planning, as I mentioned will add fact and rigor to our assortment planning process, it will decrease our unit buys per style and help us flow our goods closer to demand.

We piloted the program with the outlet division in the summer -- for summer of 2015 and we realized double-digit increases and we’re rolling it out to the balance of the business for the back-to-school period in 2015. We anticipate that from a U.S. place perspective that buys can be down in the high single-digit range.

As far as gross margin benefit, we’re really looking to the second half of 2015, so the assortment planning tool in conjunction with quantum which will be the allocation in replenishment tool will begin to take effect in that July-August timeframe..

Our next question comes from Susan Anderson with FBR Capital Markets. Please go ahead. Your line is open..

I was wondering if you could go over the biggest delta in the gross margin for the quarter versus your original expectations.

Was it more merch margin pressure from just higher promotions, or I think you called out some supply chain issues? And just to clarify, is that bringing or getting inventory down ahead of the planning and allocation tools?.

The quarter played out pretty much as we expected, we were able to achieve the top-end of the guidance range and we’re pretty pleased we recorded a positive comp for the second quarter in a row. We had slight geography issues between gross margin and SG&A around 60 basis points, but all-in-all we’re pretty pleased with the results for the quarter.

As far as the merchandize miss to last year to 220 basis points, roughly it’s two-thirds on the merchandizing margin and one-third on the fixed cost.

Obviously, we’re under some pressure in terms of commodity pricings as I mentioned denim before, warm weather in October didn’t help the situation, so we made the decision to start to move inventories and keep them in line and obviously with our APT coming onboard, we feel we’re going to be in a really strong inventory position as we move forward..

Our next question comes from Anna Andreeva. Please go ahead, your line is open..

I was hoping you could talk a little more about the pricing model that you implemented in the outlet, just a little bit more detail on that. When can we expect that to be rolled out for the rest of the chain? And, Mike, you've done such a great job on the SG&A, very focused on that.

Maybe talk about some of the buckets of opportunity into '15?.

So from a pricing perspective, as I said we put together a structured analytical approach to generate, improve margin and inventory turns and we piloted with the outlet group in September and we’ve seen positive result so far in both inventory turns and in gross margin results.

From an SG&A perspective, we’ve just established a pretty strong expense management culture here at TCP and our thoughts is we’ll continue to drive it as we go forward. We expect the full year to leverage in the 100 basis points range roughly $20 million on top of $25 million that we saved in 2013.

And we would expect SG&A to continue to be a contributor to operating margin over the time. Obviously, we’re focused on both systems, I mean both stores and corporate and our sense is the systems that we are currently implement will help drive SG&A savings as we move forward..

Our next question comes from Lorraine Hutchinson with Bank of America. Please go ahead. Your line is open..

As you begin the back-to-school order process, what are your vendors saying about cotton's impact on average unit costs for the season?.

So from a cotton perspective obviously we’ve seen a decrease in the overall price which is favorable to us. As we indicated on the second quarter call there is usually a six to nine months fiber supply available on the marketplace.

Expectations around potential savings in cotton is that we should expect to start to see some positive impact on AUC in the second half of '15. Having said that, we continue to face inflationary headwinds such as in labor rates and just general country inflation.

We’re expecting our AUCs in the first half of 2015 to be up slightly sequentially better than the low single-digit price increase that we saw in the back half of 2014..

Our next question comes from Stephanie Wissink with Piper Jaffray. Please go ahead. Your line is open..

If I could, Jane, just a question for you on Jennifer's hire and her creative vision, can you talk a little bit about some of the things we should be looking for in the stores over the next year or so related to some of her handiwork? And then, Mike, just a question on something you stated earlier related to the benefits of the combined cost savings or expense management and the system.

If you could just give us some insights into what within the corporate structure today might be able to be saved from systems, whether it's a people replacement from a system standpoint or whether it's just better efficiency across the organization? Thank you..

As far as Jennifer is concerned she has a very strong background in children’s wear design having spent most of her carrier on the children design side of the business. So I think what’s she is going to bring to the Children’s Place is certainly a very-very good understanding of mom and what she wants and also of the different size breakdown.

I think when you think about our Newborn and Baby business she has a tonne of experience in that business and she is already bringing some good new ideas to the table. So I think she can help us propel that business that’s already on a good track.

And then as far as a the Big Kids business, we’ve made a lot of progress there in the last few years and I think with our expertise she can help us strategize how to continue to keep that business rolling to the level it’s been..

And from a systems perspective obviously we believe that it will help drive SG&A savings. We continue to refine our organization to add on the necessary capabilities to work with our new tool set.

You will have noticed that in the last two quarters we’ve taken small non-GAAP charges associated with some of the restructuring that we’ve done we definitely see efficiencies being driven by our systems.

One example of that is our vendor portal which allows now direct communication with our vendor community electronically as opposed to series of emails and phone calls that we used to have to make. So we definitely see efficiency starting to happen within the SG&A world..

Our next question comes from Dana Telsey with Telsey Advisors. Please go ahead. Your line is open..

As you think about Canada, Canada had such good results last quarter.

What changed this quarter? Was it the promotional environment? And as you think about the level of promotions, anything different that you are seeing online versus in the stores regarding the cadence? Just lastly, on the categories, Jane, as you look into this quarter and into next year any trends you are seeing in Newborn, Big Girl, and Baby? Thank you..

Sure Canada was tough but we expected it would be. I think we had said on the last call that we had pent-up demand in Q2 from a very-very difficult Q1. So we do not foresee that type of business continuing into Q3 from Q2.

There is traffic issues up in Canada, the consumer is under a lot of pressure and there is a lot of options for the Kids customer, a lot more option up there than there have been in the past. You add that in with FX headwinds we’re controlling what we can control on the cost and on the inventory side.

The good news as we always say in Canada is that we’ve been up there a long time we have a very-very successful e-commerce business and we still have the number one market share up there behind Wal-Mart.

We’ve done a lot of work on our stores, we slowed down our store openings, we’ve been focused on talent and now that we’ve got the launch of SAP behind us we’ve got a much broader array of promotional capabilities. So we’ll start to utilize some of those in the fourth quarter.

As far as online I would say the biggest difference that I see promotions online versus store would be maybe some blanket type of promotions but where we really focus on online is really the free shipping promotions versus anything that would be category specific.

And then as far as trends Newborn and trends in Baby I’ll just speak for us not from a fashion point of view but just from a trend point of view. What’s happening at the Children’s Place is that we’ve had four consecutive quarters now of positive comps in Newborn and we feel that the strategy is really taking hold.

We have been focused on essentials like high volume core Baby items like bodysuits and sleepwear, playwear.

We’ve introduced a couple of quarters ago beds and blankets and that’s really resonating with our customer, we are into the set business now in Newborn and they have really -- the results there have really been incredible and we focus much more Baby on sleepwear and expanding sizes and the assortment there as well as playwear.

So I think we are really starting to get the formula down there and we’re looking for that business to continue to sequentially improve in the quarters to come. Thanks..

Our next question comes from John Morris with BMO Capital. Please go ahead, your line is open..

Mike, I wanted to go back to the outlook for gross margin for the fourth quarter and just recapture that again. I think you said down 70 to 130 basis points, if I'm right about that. Talk a little more about the components behind that decrease, the AUC and sort of where that's coming from.

Just in consideration of the fact that you are up against such an easy comparison to the fourth quarter a year ago, it just seems like maybe there's something else going on there. Is there also consideration for how you are managing the inventory down? Just any kind of other factors there beyond the denim price increases, et cetera? Thanks..

So, you are correct. We guided gross margins down 70 to 130 basis points. And the margin erosion is strictly a result of the higher AUCs in the quarter which are up low single-digits.

Our sourcing team led by Greg Poole has done a great job mitigating a lot of the labor increases that our competitors have in the back half of '13 and the first half of '14 through -- we’ve been on the strategy of country migration and vendor comp consolidation.

So we are pleased with where we are as we indicated AUCs should get better as we move into 2015 and we’ll see what happens once the cotton prices hit. But really it’s strictly a result of higher AUCs..

Our next question comes from Lee Giordano with CRT Capital. Please go ahead. Your line is open..

I was just hoping you could update us on what the trends are at the outlet stores versus rest of the chain? Thanks..

Outlet was really a bright sport in the quarter. We had some great performance, nice comps in outlet and we also had a nice margin pickup in the outlet as well. I think when you look at what’s happening in outlet, we have been talking a lot this morning about the Newborn and the Baby business.

And when you look at our mall stores, we don’t really have a lot of specialty store competition in the malls in our price range. The competition in the malls comes mostly from department stores. It’s really in the outlet centers in the off-mall where we go head-to-head with the Baby and Newborn specialty players.

And so we are thinking judging by the trend reversal in our Newborn business and pretty big sequential pickup in our Baby business that in our outlet and our off-mall we are starting to figure out how to compete with those guys and starting to get some share back in those two very important categories..

Our next question comes from Rick Patel with Stephens Incorporated. Please go ahead. Your line is open..

Can you put your fourth-quarter gross margin guidance into context for us? I'm curious if you're assuming the same level of promotional pressure that you've had in the third quarter or if you are going to assume that it's going to get worse.

Then also curious about the pickup in November, what you think is driving the improvement versus October? Thank you..

As far as November is concerned, it’s really been a significant pickup in sales and traffic for the first 2.5 weeks. And as you know November is a very-very important month of quarter.

We had a tough Q4 last year, we saw significant sales and traffic declines mostly due to the polar vortex and we had a lot inventory left to liquidate, and I think there are a lot of reasons for us to be optimistic about the fourth quarter this year.

First and foremost starting like on the product side, I think we have the trend appropriate gift giving items that really good values that mom is looking for and I think those are already starting to resonate from an inventory low point of view, we have a much better flow of wearing our merchandise both pre and post Christmas this year.

We added a new November delivery which is on the floor right which we didn’t have last year, which is performing extremely well.

And we also have a delivery coming in towards the end of January that didn’t have last year that really -- I think it’s going to help us transition much more from winter to spring in a more wear-now fashion than we were able to do last year. So I think keeping that inventory flow of newness is going to be critical to the quarter.

We’ve talked a little bit today about the marketing and the pricing strategies that we have.

Now that we have SAP behind us, we do have a much more level playing field as far as the competition on pricing strategies that we can utilize and that we have already started to utilize, and also on the marketing front that strategic segmentation being behind us and some very interesting things we are able to do and we started to do already in the quarter on the email marketing side.

Obviously we are hopeful that we are going to have an incrementally more normalized weather patterns versus last year, we’re certainly off to a good start. The weather is on our side for once this year.

And then Newborn and Baby, we talked about a little before, the opportunity in fourth quarter to continue to grow that Newborn division like we have in the past few quarters and then continue the positive momentum in Baby is really exciting and bodes well for the quarter as well, so I think we have a lot in our arsenal to help us..

Our next question comes from Jennifer Davis with Buckingham Capital. Please go ahead, your line is open..

how many members you have now and what their spending pattern looks like versus non-loyalty members? And then also, could you just tell us how much of your cash is trapped overseas and are you doing anything to try to repatriate that? And then I'm going to squeeze one more in.

Could you add any color on wholesale? How many stores are you in now in each of your accounts and how large is the assortment? Based on our checks it still looks relatively small so I think you still have a big opportunity there, but was hoping for some additional color? Thanks..

On the loyalty program, we believe as most do the targeted customer relationships have the ability to drive much stronger sales and improved margins for us, so we implemented our loyalty program and we now have over 7 million members who have made purchases in the last year. And on average these members spend about three-times more than non-members..

From a cash perspective, we ended the quarter with about 210 million in cash and short-term investments with about 19 million on our revolver balance which we used for working capital funding associated with inventory and timing of payments. Our U.S. cash position was less than 20 million at the end of the quarter.

Currently we’re working with outside advisors, best uses for the cash that is permanently invested outside the United States. From a wholesale perspective, obviously we’re pleased to begin shipping four new accounts in the back half of 2014, but for competitive reasons we’re not going to disclose anymore than that at this time..

Our next question comes from Jay Sole. Your line is open. Please go ahead..

Jane and Mike, I sense a lot of enthusiasm on this call and I can understand why. You're getting learnings from systems. It sounds like the inventory is below your expectation. November month-to-date started off well. The third-quarter comp was positive and you've put your finishing touches now on the team.

I think what is interesting about the team is that you've been able to attract people to the Company, even though your earnings have been relatively flat over the long period. Margins are going to down almost -- gross margin down almost 200 basis points this year.

What is the vision that you are selling to people who are coming to the team on where this company can go? And maybe if you can apply that to the investors out there to hear where your enthusiasm is really coming from and where you see this company going from an earning standpoint over the next few years?.

I think that, we really don’t need to sell them on a vision. I think when you have the number one children specialty apparel retailer in the United States, I think that that’s a pretty good starting point.

I think a lot of the people that have come here see the same things that Mike and I have seen, that you had a brand that was very undermanaged for a long time and really did not have the talent or a strategy behind it to allow it to grow and I think certainly in the four years since I’ve been here, there really are a tremendous amount of opportunities and tremendous amount of ways that this brand really can grow through alternate points of distribution being a big driver and also through these pretty massive upgrades on system and process.

Coming into this company systems were less robust than systems I had when I was Assistant Buyer in Macy's in 1984.

So the ability for us to be able to take the systems and bring them into 2014 and beyond, to bring the process into 2014 and to really bring as I said a world-class specialty management team in place to drive those initiatives has been pretty exciting, so I think the story kind of sells itself..

Our next question comes from Richard Jaffe with Stifel. Please go ahead, your line is open..

And Mike, a question for you on the alternative distribution channels that Jane just mentioned; the wholesale, the franchise initiative to 75 stores this year, if you could talk us through what your outlook is and perhaps how big this could be in 2015, particularly in the wholesale channel? Thank you..

Well, we’re making significant progress in both the wholesale business and the international business.

I’ll take international first, we started in 2012 with two partners and 12 doors and we’ll end this year with five partners and 75 doors and our thought with those five partners over the next three years, we can easily have the potential to have over 150 franchise stores, so we continue to have discussions with potential partners in other international markets and we feel really good about the progress we’ve made in the state of that business.

From a wholesale perspective, pleased that we’re able to now have the eight accounts that we’re shipping to, obviously this business takes a little time to ramp-up usually our accounts are beginning with test categories in specific divisions. And the timeframe from initial orders to reading retail results can take as long as nine months.

So we’re optimistic that the accounts we have will serve this building blocks as we grow this business overtime and we’re pleased with where we are in both channels of distribution..

Our next question comes from Marni Shapiro with The Retail Tracker. Please go ahead. Your line is open..

I was just about to quit. If you can just talk a little bit about any kind of metrics around the store traffic, transactions, AURs, EPTs, anything that you are willing to provide there? And then if you could also talk a little bit about long-term on the wholesale side.

Would you guys, or have you thought about creating third-party brands, partnering, and things like that there even a further step removed from The Children's Place brand, but at the core of what you do really well?.

So from a KPI prospective we touched upon, at the beginning of my script that we saw an increase in transactions and a decline in average transaction value. Obviously in our stores traffics were still under pressure and AURs were under pressure also but we did see an increase in units per transactions and transaction increasing.

So our stores did a great job of converting the traffic that they did see. From a wholesale perspective like I said it’s pretty much a pretty small businesses at this point we’re still getting our feet wet still working on system enhancements to help us work with more sophisticated wholesale accounts. So I would just say stay tuned..

So that concludes our call. Thank you all for joining us today. If you have further questions please call us at 201-453-7351. Thanks everybody..

And that does conclude today’s conference. You may now disconnect..